The Smart Grid from an Emerging Economy’s Perspective

By Vivek Bhandari and Stephen Rose

Smart grid technologies developed to solve grid problems in advanced market economies also offer important benefits to grids in emerging economies. In both cases, smart-grid technologies make more efficient use of existing infrastructure. In emerging economies, they can also improve reliability and resilience by better managing insufficient generation, reducing pilferage and by facilitating integration of distributed generation into micro, mini and national grid. However, careful attention must be paid to smart grid deployment in these regions. We explain smart grid from an emerging economy’s perspective.

For those living in advanced market economies where blackouts are rare, it is hard to imagine living off the grid. However, a staggering 1.3 billion people in emerging economies don’t have access to electricity. Hundreds of millions more have access to unreliable electrical supplies. For example, only 30 percent of the population of Nepal has access to electricity and they endure daily, hours-long power outages because demand outstrips supply by nearly three-fold. Sometimes even rolling blackouts cannot balance supply and demand: a nation-wide blackout in India in 2012 cut power to more than half a billion people.

Smart grid technologies developed to solve grid problems in advanced market economies also offer important benefits to grids in emerging economies. In both cases, smart-grid technologies make more efficient use of existing infrastructure. In emerging economies, they can also improve reliability by better managing insufficient generation and integrating distributed generation into the larger grid.

Emerging urban areas: emerging avenues

By 2050, it is projected that 7 out of 10 people in the world will live in urban areas, mostly in the emerging economies. Urban dwellers in these areas have several advantages for access to electricity: they are more likely to have access to low-cost energy from utility-scale power plants and the distribution infrastructure that serves them is less expensive per capita because of high customer density. However, generation capacity is often insufficient to serve all the connected loads and utilities have trouble collecting payments for all the energy they provide. Smart meters can offer solutions to both of these problems.

A recent article in this publication explained how smart meters can reduce electricity pilferage and non-payment. Meters that detect tampering and frequently transmit usage data to the utility reduce opportunities for theft. Meters with two-way communication can allow remote shutoff and prepayment (although prepayment has existed before “smart” meters). Such techniques could recover billions of dollars of lost revenues and reduce the burden from the paying customers.

Smart meters, in tandem with a smart switch gear, can also help mitigate problems of insufficient generation by enabling more sophisticated load management techniques such as demand response and real-time dynamic pricing. Although these approaches are more economically efficient, they favor customers who are most willing or most able to pay. In practice, this is not much different from managing load with rolling blackouts, which forces customers who want reliability to purchase more-expensive kerosene or batteries for lighting and generators for electricity. The difference is that such equipment can allow for differentiated reliability, like providing “lifeline” services during periods of insufficient generation, instead of all-or-nothing electricity service. For example, a 100-watt lifeline service would be enough to light few rooms using LED lights and run a small pedestal fan. Similarly, it could also better differentiate critical infrastructure like hospitals or schools and maintain reliable supply to these while curtailing others.

Existing/transforming rural areas: bottoms up electrification

Many rural areas not served by the transmission network are electrifying from the bottom up, building micro grids that take advantage of locally-available energy resources. This parallels the development of telecommunications in the same areas, which “leapfrogged” to cellular telephone networks without first building landlines. These two systems also complement one another: cellular phone networks can transmit control and telemetry signals that allow micro-grids to connect to one another to form mini-grids. Mountainous Nepal is a prime example. It has many small hydropower generators and an excellent cellular telephone network.

Rural mini-grids will benefit from smart-grid technologies for generator control, instrumentation and measurement and communication. However, smart-grid products created for the demanding reliability standards of developed countries are too expensive for these applications. We recommend developing these products locally whenever possible to reduce costs, tailor their functions to local needs, and develop the expertise needed to maintain and improve them. For example, in Nepal there has been an increasing effort to use universities’ R&D capacity to develop distributed generation communication and control techniques. One unique feature of smart grid technology in rural areas of emerging economies is the importance of human in the loop i.e. skilled human operators are an integral part of a smart grid. The operators of these rural micro- and mini-grids are often highly skilled and deeply knowledgeable, and better able to manage the idiosyncrasies of their systems than an automatic control system. Human involvement helps ensuring maintainability and economic empowerment. In Nepal, some electrical developers now focus on recruiting and training women as operators partly for economic empowerment, but more importantly because they are less likely to migrate than their male counterparts who generally migrate in search of better opportunities e.g. as an electrician to the neighboring countries.

Smart- micro-and mini-grids can eventually be integrated into the regional- or national-scale grids to improve reliability and take advantage of lower energy costs. This integration will also require smart grid technologies to integrate control of distributed generators with grid-level control. These mini-grid controllers could also allow “islanding” to maintain service in the mini-grid when grid connection is lost.

For people from the emerging economies who don’t have access to electricity or have access to unreliable electricity, the planned deployment of smart grid technologies can be a blessing. A smart grid could have direct benefits like reliability improvement, pilferage reduction, and improved management of power systems. Indirect benefits would be a reduction in the dependency on fossil fuel consumption (e.g. for cooking and heating) and local empowerment. However, these economies should avoid trying to cut and paste the smart grid solutions. Careful attention must be paid to smart grid deployment. First, for these economies, the smart grid is a process rather than a product: interconnecting distributed generators with smarter monitoring and control mechanisms, marrying it to the available communication infrastructures to form a smart-micro-grid and then slowly expanding. Second, local development should be encouraged with adequate attention to ‘human in the loop’. This would ensure affordability, maintainability and public acceptance.

For a downloadable copy of  December 2016 eNewsletter which includes this article, please visit the IEEE Smart Grid Resource Center.



vivek bhandari

Vivek Bhandari is a software engineer at SIEMENS Digital Grid and an adjunct instructor at the University of Minnesota (UMN). His research interests are interdisciplinary works especially in the areas of energy and environmental policy. He is a former recipient of the Fulbright S&T Award and has mostly worked as an engineer and a consultant in the areas of generation control, transmission applications and micro-grids in Nepal and the USA. He is currently studying interactions of carbon taxes and production tax credits, market diffusion of combined heat and power and the significance of market rules for electric vehicles in wholesale electricity markets. Bhandari has a bachelor's in electrical engineering from Kathmandu University in Nepal and a master's in electrical and systems engineering from University of Minnesota. He is currently doing his Ph.D. in energy policy at University of Minnesota.


steve rose

Stephen Rose is a research scientist at the University of Minnesota. He researches public policies for high penetration of renewable generation and public participation in long-term electricity system planning. Previously, he worked as a controls engineer for General Electric Wind Energy. He holds a Ph.D. in Engineering and Public Policy from Carnegie Mellon University, M.S. in Mechanical Engineering from the Georgia Institute of Technology, and a B.S. in Mechanical Engineering from the University of California, Berkeley.

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