Modernizing the power grid through smart grid enhancements is essential for the development of a smart city. A smart grid enables the city to be more sustainable by integrating distributed energy resources (DER), such as solar photovoltaics, wind turbines and energy storage systems, enabling the production of clean, sustainable and renewable energy close to where it is needed. The rapid growth of these DERs together with technological advancements is transforming the global power industry.

Declining costs and meeting green targets are driving the proliferation of DERs. Over the last decade, the cost of DERs has been reduced drastically, according to Bloomberg New Energy Finance (BloombergNEF). For example, solar energy now is cheaper than coal in some parts of the world and projected to represent 20% of the global energy consumption by 2040, up from 4% in 2015. Similarly, the price of Lithium-ion batteries has dropped by 80% over the last decade and is expected to fall an additional 52% by 2030.

The increasing integration of DERs into T&D networks presents new challenges for utilities as conventional grids have not been designed to handle bidirectional energy flow and the intermittent generating characteristics of DERs. These issues—coupled with challenges such as meeting green targets and changing customer demands and expectations—have driven utilities to transform existing grids into smart grids. What exactly makes a grid smart and how can this smartness be measured? The owner and operator of electricity and gas T&D businesses in Singapore, SP Group aimed to find out.

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