GettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemandINSIGHTREPORTOCTOBER2021ContentsForewordExecutivesummary1Digitaltechnologyisthefundamentalenablerofaresilientnet-zerogridMandate1DigitaltechnologyinthedistributiongridmustbeharnessedtoaccommodatemoredecarbonizedenergywhileaugmentingcapacityandresilienceMandate2SmartgridtechnologymustbeleveragedtomakedemandflexibletoincreasegridresilienceandallowgreateruseofrenewableenergyMandate3Existinggridarchitecturerequiresadigitalupgradetoensureresilienceandsustainability2Newbusinessmodelswillmakeanet-zerogridaffordableMandate4Botholdandnewplayersmustbeempoweredtocontributefullytoacceleratethetransitiontoanet-zerogridMandate5Interoperabilityanddatatransparencywillbecriticaltoprovidingnewnet-zeromarketsignalsMandate6Newbusinessmodelsshouldtransfercapitalexpendituresandriskfromsmallerplayerstofinancialproviders,effectivelycrowdsourcingforanet-zerogrid,bymakingitaffordableandattractive3Anewcomprehensivesystemgovernancemodelwillbevitaltoensuringaseamlessandresilientnet-zerogridMandate7Economicreformmustensureallfutureinvestmentisdedicatedtoanet-zerofutureMandate8Anofficialsystemarchitectfunctionisrequiredwiththecompetenceandauthoritytooverseeanintegratednet-zerosystemMandate9ProgressagainsttheParisAgreement’snationallydeterminedcontributionsandtheUNSustainableDevelopmentGoalsmustbetrackedConclusionContributorsEndnotes34668121313151617171821222324Cover:GettyImages©2021WorldEconomicForum.Allrightsreserved.Nopartofthispublicationmaybereproducedortransmittedinanyformorbyanymeans,includingphotocopyingandrecording,orbyanyinformationstorageandretrievalsystem.DisclaimerThisdocumentispublishedbytheWorldEconomicForumasacontributiontoaproject,insightareaorinteraction.Thefindings,interpretationsandconclusionsexpressedhereinarearesultofacollaborativeprocessfacilitatedandendorsedbytheWorldEconomicForumbutwhoseresultsdonotnecessarilyrepresenttheviewsoftheWorldEconomicForum,northeentiretyofitsMembers,Partnersorotherstakeholders.GettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemand2ForewordTheyear2021isamomentousyearforhumankind,withdecisionshanginginthebalancethatmayimpactlifeonearthforcenturiestocome.TheCOVID-19pandemicservesasasoberingreminderthatoursurvivalandwell-beingonthisplanetdependonworkingtogether.Peoplehaverisentotheoccasionasneverbeforeasaglobalcommunity,collaboratingtodevelopmultiplelife-savingvaccinesinunderayear–ahistoricalbreakthrough.Nowisthetimetoapplythatattitudeofheroicsolidaritytooneofthegreatestchallengesofourcentury:climatechange.Theyearbeganinthatspirit,withannouncementsofmoreambitiousclimatetargetsfromeverymajorworldleader.Yet,followingabriefperiodin2020whenglobalcarbonemissionssankby5.8%,theInternationalEnergyAgency(IEA)haspredictedthat2021willseethesecondbiggestemissionsriseinhistory,asvastportionsofstimulusfundsflowintofossilfuelstojump-starteconomicrecovery.1Inthemeantime,theAugust2021SixthAssessmentReportfromtheUN’sIntergovernmentalPanelonClimateChangeissuesaveryclearwarning:currentclimatemeasuresareinadequatebothinscopeandspeedtomeettheParisAgreementtargetoflimitingglobalwarmingto1.5°Candavertaclimateoutcomewithsevereconsequencesforhumanity.2Wehaveafewremainingyearstoacttocompletetheenergytransitionandbuildanewgreeneconomybasedonnet-zerocarbontechnologies.Wemustactswiftly,decisivelyandinclusively.Forclimateactiontoworkforanyone,itmustworkforeveryone.Cleanelectrificationisaglobalpriorityintheracetonetzero.TheIEAannouncedcleanelectrificationasatopinvestmentpriorityforreachingnetzeroby2050.3Thecleanelectrificationoftransport,heatinginbuildingsandindustrywoulderadicatefully73.2%ofglobalemissions,4movingsocietyconsiderablyclosertoanet-zerofuture.“Clean”dependsfirstandforemostoncompletingthetransitionfromfossilfuelstorenewableenergyinourpowergrids.Wemustensurethatthepowergridservesastheresilientandreliableprincipalsourceofelectricitytheworldwilldependonforitsnet-zerofuture.Demand-sidemanagementholdsahiddenkeytothenet-zerogrid.USPresidentBidenrecentlyproposedaCleanEnergyStandard,whichwillrequire100%zero-carbongenerationineverystateintheUnitedStatesby2035,80%by2030.5Yet,theshifttocleanenergygenerationalonewillnotsufficetoachievenet-zeroelectricity.Electricitygridsweredesignedtodeliveraflowofreliableelectricitytousers.Renewablesourceslikewindandsolarprovideavariablesupply.Gridinfrastructureneedstoevolvetofullycaptureandutilizesuchrenewableenergy.Thismeansincorporatingnewdigitaltechnologiesthatcanmakethedemandflexibleenoughtoaccommodatethefluctuationsingeneration.Technologyisreadytomeetthatchallenge.Bothhardwareandsoftwaretechnologiesareavailablethatwouldenableustooptimizeboththecaptureofcleanenergyanditsdeliverytoconsumersandbusinesses.Whatismissingnowarethemarketmechanismsandgovernancetoallowthosetechnologiestobedeployedfullyandtomakeanewnet-zerogridinfrastructureeconomicallyviable.Thisreport,publishedundertheauspicesoftheWorldEconomicForumGlobalFutureCouncilonCleanElectrification,invitespolicy-makers,regulatorsandinvestorstofocusgreaterattentionontheusersideoftheelectricitysystem.Itpresentsthetechnology,businessmodelsandsystemgovernancenecessarytounlockflexibledemandinthegridinfrastructuretoachieveanet-zerogrid.AminaHamidiChiefTechnologyOfficer,Electrification,ABB,SwitzerlandPhilipNewChiefExecutiveOfficer,EnergySystemsCatapult,UnitedKingdomGettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemand3ExecutivesummaryAsadecadeofintensiveelectrificationbeginsfortransportationandindustryandforheatinginbuildingsandindustry,progressmustbemeasuredagainsttwoprincipalgoals.First,theenergytransitionmustbecompletedandcarbonneutralityintheworld’spowersystemsmustbeachieved.Second,powergridsmustbemaderesilientandreliableinthefaceofincreasedclimatestress,risingelectricitydemandandmuchgreateroveralldependenceonelectricity.Renewableenergygenerationwillonlygetmankindpart-waytonetzero.Theshiftfromcombustionincentralizedpowerplants(whichprovidecontrollableandconsistentoutput)torenewableenergyresources(whicharevariableandlesscontrollable)createsaproblemforexistinggridinfrastructurebecauseitwasdesignedforconsistent,predictablepowergeneration.AddingmorerenewablestotheenergymixthroughflexibledemandIf100%cleanelectricitygenerationcannotbeachievedsimplybyincreasingthesupplyofrenewables,whatelsecanbedone?Thetransmissiongridislikeahighwaytochannelrenewableenergy:thedistributiongridprovidesthefeederroads,thefinalconnectiontoendusers.Thisiswherethehiddenkeytoreachingnetzerocanbefound.Thedistributiongridconnectssupplyanddemand.Ithasevolvednaturallyinthepasttwodecadestosupportbothnewdemandsites,likeelectricvehicles(EVs),aswellasnewelectricityinputsitesintheformofdistributedenergyresources(DERs),includingsmallerwindfarms,homesolarpanels,hydrogenfuelcells,batterystorageandEVswithvehicle-to-gridcharging.6Distributedgenerationsupportsenhancedresiliencetoclimateshocksforindividualusers,aswellasthepossibilityofsatisfyingrisingelectricitydemandwithmoredecarbonizedenergy,butitmustbemoredeliberatelymanagedtoachieveitsfullpotential.Thisreportpresentsthecaseforthetechnologies,businessmodelsandgovernancethatwouldallowgreateroptimizationofthefurtherevolutionofthedistributiongridto:1)effectivelyusemorerenewableenergy;2)makeanewnet-zerogridaffordableforgovernments,operatorsandendusers;and3)ensureaseamless,resilientandreliablesourceofelectricitytomeetrisingglobaldemand.Thisreportoutlinesninekeymandatestogettonetzerobyincreasingcleanelectrificationthroughempoweringdemand:Digitaltechnologyisthefundamentalenablerofaresilientnet-zerogrid.1.Therapidproliferationofrenewableenergygeneration,DERsandEVshasdrivenanevolutionofthedistributiongridthatmustbecloselymanagedgoingforward.Itsfullpotentialmustbeharnessed,ensuringresilienceforindividualusersandservingincreaseddemandwithdecarbonizedenergy.2.Smartgridtechnologymustbeusedtoenableflexibledemand,withtheaimofintegratingmorerenewableenergy,whileincreasinggridresilience.3.Existingdistributiongridhardwaremustbedigitallyretrofittedwithsmartgridtechnologyorreplacedwithnewdigitally-enabledequipment.Thegridmustbemaderesilientandreliableinthefaceofincreasedclimatestress,risingelectricitydemandandmuchgreateroveralldependenceonelectricity.Newbusinessmodelswillmakeanet-zerogridaffordable.4.Itisparamounttoleveragethefullexpertiseandpotentialofallstakeholderstocontributetoanet-zerogrid.Todothat,barriersmustberemovedandregulationrevisedtoempowerbothexistingstakeholders(suchasutilities)andemergingstakeholders(suchasaggregators,prosumersandmicrogridoperators)toefficientlyaccessandoperatewithinthedifferentsectors(powergeneration,transmissionanddistribution).5.Interoperabilityanddatatransparencywillbecriticaltoprovidingthemarketsignalsneededtoempowerallmarketstakeholderstocontributetonet-zerogriddevelopment.GettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemand46.Newbusinessmodelsareneededthattransfercapitalexpendituresandriskfromprosumers,aggregatorsandmicrogridstofinancialprovidersandinstitutionalinvestors.Crowdsourcingforanet-zerogridisneeded,bymakingitaffordableandattractiveforeveryone.Anewcomprehensivesystemgovernancemodelwillbevitaltoensuringaseamlessandresilientnet-zerogrid.7.EconomicreformisneededtoensurethattheforecastoftheInternationalEnergyAgency(IEA)for$260-820billiontobeinvestedannuallyintheglobaltransformationofthegridinfrastructurefromnowto20307isdedicatedtotechnologies,valuepropositionsandbusinessmodelsthatsupportanet-zerofuture.8.Anofficialsystemarchitectfunctionisrequired,withthecompetenceandauthoritytooverseethedevelopmentofanintegratednet-zeroenergysystemthatbenefitsallpeople.9.Standardizedauditsmustbeimplementedthatusenewlyavailablesystem-widedatatoensuretransparentandtimelyreportingagainstnationalandinternationalnet-zerotargets.GettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemand5Digitaltechnologyisthefundamentalenablerofaresilientnet-zerogrid1The$2.6trillionglobalrenewableinvestmentinthepastdecadehasveryeffectivelyincreasedrenewableenergygeneration,bothfromlargerwind,solarandhydropowersourcesaswellasfromsmallerdistributedenergyresources(DERs),likesmallerwindfarms,homesolarpanels,batterystorageandelectricvehicles(EVs)withvehicle-to-gridcharging.Thishasspurredanevolutionofthepowergrid(Figure1),entailingashiftfromcentralizedpowerplantgenerationtoamoredecentralizedenergysupply.1.Therapidproliferationofrenewableenergygeneration,DERsandEVshasdrivenanevolutionofthedistributiongridthatmustbecloselymanagedgoingforward.Itsfullpotentialmustbeharnessed,ensuringresilienceforindividualusersandservingincreaseddemandwithdecarbonizedenergy.2.Smartgridtechnologymustbeusedtoenableflexibledemand,withtheaimofintegratingmorerenewableenergy,whileincreasinggridresilience.3.Existingdistributiongridhardwaremustbedigitallyretrofittedwithsmartgridtechnologyorreplacedwithnewdigitally-enabledequipment.Thegridmustbemaderesilientandreliableinthefaceofincreasedclimatestress,risingelectricitydemandandmuchgreateroveralldependenceonelectricity.Digitaltechnologyinthedistributiongridmustbeharnessedtoaccommodatemoredecarbonizedenergywhileaugmentingcapacityandresilience.Mandate1KeymandatesGettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemand6TheevolutionofthepowergridFIGURE1Source:ContributedbyABBTraditionalGridsModernSmartGridsNewlyobserved,thepotentialofdistributedgenerationcanhelppeopleadapttoclimatechangeasitsupportsenhancedgridresiliencetoclimateshocks,suchasflooding,forestfiresandcoldsnaps,byofferingindividualusersbackuplocalgeneration.Italsoofferstremendouspotentialtohelpachieveanet-zerogrid,bysatisfyingincreasingelectricitydemandwithmoredecarbonizedenergy.However,tobesuccessful,gridoperatorswillneedmuchgreaterobservabilityofloads,voltageandflowsbetweenthesenewsupplyanddemandpoints.Asystemsapproachwillneedtobeused,underpinnedbydigitaltechnologythatconnectseverythingandgivesoperatorscomprehensive,detailedobservabilityandprecise,system-widemanagementofthecompletepowergrid.Thiswillallowoperatorstomanagedemandinaflexiblewaytoalignwithamorecomplexanddynamicsupplyofelectricity.Oneexampleofincreasedobservabilityandcontrolthatalsoallowsthegreaterintegrationofdecarbonizedenergyintothegridisactivenetworkmanagement(ANM).ANMintroducesnewplanningproceduresandpermissionstoconnectalargerinstalledbaseofrenewablegenerationtothegrid.InpartnershipwithIberdrola,theSpanishgridhasintroducedANMinitsoperations,launchingpilotsinanareawithnumerousrenewablegenerators.8DistributionsystemoperatorsuseANMtooffernewrenewablegeneratorsfasterfirst-timeconnectionstothegrid,basedonadherencetoascheduleofcurtailedgeneration,whichensuresthatpeakgridcapacityisnotexceededbypeakrenewableinput.Thisallowsmorerenewablegeneratorstoconnecttothegrid,withouttheneedforadditionalgridinfrastructuretoincreasegridcapacity.Thisservesthevitallong-termgoalofincreasingrenewablepenetrationbyallowingtheinstalledbaseofrenewablegenerationtogrow,despitethecurrentconstraintsofgridcapacity.Thecurtailmentofexistinginstalledcapacitywillreduceovertimeasthegridoperatordevelopsandexpandsgridinfrastructure.Facilitatingrenewablepenetrationthroughactivenetworkmanagement(ANM)CASESTUDYThenextstepmustnowbetakentodigitalizethedistributiongrid,increasingawarenessandallowingoperatorstomakemoreinformeddecisionsonhowtoincreasetheuptakeofrenewableenergy,fromallavailablesources.GettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemand7Givendependenceonthegridtosupplypowerfornearlyeveryaspectofpeople’slives,itisnecessarytoensureenoughgenerationcapacitytocoverelectricitydemandsatalltimes.Bothelectricitygenerationbyrenewableenergysourcesandelectricitydemandvarydependingontheseason,theweatherandthetimeofday.Nevertheless,theforecastingofthetotalmaximumdemandintheoverallsystemisfairlyaccurate.Mostofthetime,withasufficientinstalledbaseofrenewableenergysources,demandpeakscanbemetbyrenewableenergy.However,ontherareoccasionswhenthereisvirtuallynorenewablegeneration–forexample,whenthewindisnotblowingandagigawattwindinstallationproducesmeremegawatts–thegapisfilled,currently,byfossil-fuel-basedpower.Ifdemandinthetotalsystemcanbedecreased,byintroducingbothgreaterenergyefficiencyanddemandflexibility,thesystembalancecanbepreservedonthoserareoccasionswhendemandishighwhilerenewablegenerationisexceptionallylow.Inthatway,itispossibletoavoidpouringbillionsofdollarsintonewfossil-fuel-basedpowerplants,whichareonlyrarelyneeded,andinsteaddirectthatinvestmentintothedevelopmentofrenewableresourcesandnet-zerogrids.Hedgingfortheshort-termvariabilityofrenewableenergythroughahybridapproachcombiningenergystoragewithflexibledemandEvenwithrelativelyaccuratesupplyanddemandforecasting,mismatchesstillhappenthroughouttheday.Thesemismatchesbetweensupplyanddemandpresentanotherchallenge.Merelyswitchingonafossil-fuel-basedpowerplantfivetimesayeartocoverexceptionalcircumstancesisnotwhatisneeded,butactuallykeepingfossil-fuel-basedpowerplantsrunningconstantlyina“hot”standbymode–readytooperateonshort-termnotice,whichimpliesconstantlyburningfuelandemittingCO2.Atthispointintime,twopossiblealternativestofossil-fuel-basedreservesexist:storageanddemandflexibility.Batteriesprovideexcellentcriticalbackuppowerandcanalsosupplementelectricalgridpoweronasmalltomoderatescale.However,itwouldbeimpracticaltofillthegapsbetweendemandandgenerationsolelywithbatteries.Usingsmartgridtechnologytomakedemandflexiblewillthereforeplayapivotalroleindecreasingdailymismatchesbetweensupplyanddemand.Itwillallowthedevelopmentandoperationofthegridbasedongraduallydecreasingfossil-fuel-basedreserves.Itwillalsoincreasesystemreliabilityandresiliencebybalancingthepowerinputandoutput,mitigatingtheriskofshutdowns.Infact,theworld’slargestpowerutilityandlargestuserofsmartmeters,theStateGridCorporationofChina,isnowpartneringwiththeInternationalRenewableEnergyAgencytoimplementanationwidesmartgridstrategythatwilladdresstheusersideofthegrid,usingdigitaltechnologytocreateflexibledemandandmeetthedemand–renewableenergygap.Smartgridtechnologymustbeleveragedtomakedemandflexibletoincreasegridresilienceandallowgreateruseofrenewableenergy.Mandate2EnsuringsystemicgenerationadequacywithflexibledemandUsingsmartgridtechnologytomakedemandflexiblewillplayapivotalroleindecreasingdailymismatchesbetweensupplyanddemand.On12April2021,theInternationalRenewableEnergyAgency(IRENA)andtheStateGridCorporationofChina(SGCC)signedamemorandumofunderstandingoutliningapartnershipaimedatadvancingtheglobalenergytransformationtowardsanet-zeroenergyfutureandmeetingParisAgreementobjectivesandtheUNSustainableDevelopmentGoals.Accordingtothepressrelease,“IRENAandSGCCwillconductjointactivitiesandcollaborativestudiestoenhanceflexibleoperationofpowergrids,[the]decarbonisationofurbanenergysystemsand[to]facilitategriddevelopmentwithaspecialfocusonapplicationofsmartgrid[technology]andsector-couplingstrategies,”seekingtoalignenergyendusewithsupply.9Implementingsuchanadvanceddigitalprogrammenationwideintheworld’smostpopulatedcountrywillprovidearichtestingandlearninggroundforothercountries.EnablingdemandflexibilitywithasmartgridCASESTUDYGettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemand8Congestioninthedistributiongridisanadditionalproblem,whichoccurswhentoomanyendusersaresimultaneouslyusingelectricity,forexample,turningthekettleonathalf-timeduringtheWorldCupsoccerfinals,orturningonelectricheatingduringacoldspell.Inextremesituations,thiscanleadtooverloadsorevenlocalshutdowns.Figure2showsrealexamplesofthestarkdifferencesinelectricityusepeaks(demandcurves)acrossdevicesandondifferentdaysforagroupofUShomeowners.PromotingpeakshavingandrelievinggridcongestionthroughprosumerismUShomeownerdifferencesinelectricityusepeaksperdevice,5January2020,4March2020and4July2020FIGURE2Source:UShomeaggregatedloaddataprovidedbySaulGriffith,Otherlab,2020.12:00AM0.00.10.20.30.40.50.60.712:00AM06:00AM06:00PM12:00PM02040608010012:00AM0.00.10.20.30.40.50.60.712:00AM06:00AM06:00PM12:00PM02040608010012:00AM0.00.20.40.61.00.812:00AM06:00AM06:00PM12:00PM020406080120100CapacityfactorCapacityfactorPower(kW)Power(kW)Power(kW)CapacityfactorEnergyusesvsphotovoltaics(PV),10homes,2020-01-05EnergyusesvsPV,10homes,2020-03-04EnergyusesvsPV,10homes,2020-07-04SpacecoolingRefrigerationClothesdryingCookingWaterheatingEVchargingLightingSpaceheatingGettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemand9“Peakshaving”–sonamedbecauseitsmoothsthedemandcurvebyshavingoffthedemandpeaks–canhelptoavoidgridcongestion.Peakshavingcanbolsterthereliabilityofthegridwhilealsoreducingtheover-dimensioningofthegrid(theexpansionofgridhardwarejusttoaccommodatepeakuse),thussavingvaluableanddwindlingnaturalresources.Homeownerscanplayapowerfulroleinpeakshaving.Ratherthanmerelyconsumingenergy,homeownerswithsolarpanelsorEVscanbecomeprosumers–bothproducingandconsumingenergy,andevensellingit.Homeownerswithsolarpanelsandbatteries,forexample,cancontributetopeakshavingbystoringexcesssolarenergyinabatteryduringthedayandusingittopowertheirelectricalequipmentatnight.Infact,theycangoastepfurtherandsellthatstoredenergybacktothepowergrid,toaugmentgridcapacityduringpeakdemandperiods.Buildingandequipmentownerscanalsosupportflexibledemandbyequippingorretrofittingairconditioners,waterheatersandotherpower-intensiveequipmentwithautomateddigitalenergymanagementsystems,whichnotonlysaveenergyandmoneybutalsocontributetocommunity-widepeakshaving,eliminategridcongestionandincreasegridresilience.Appliedonamassscale,shiftingtheconsumerdemandcanprovidedistrict-widereliefofgridcongestionandobviatelarge-scaleover-dimensioning.JonesLangLaSalle(JLL),aglobalcommercialrealestateservicescompany,usesbuildingautomationtomanageairquality,lightandtemperature,forhealthierandmorecomfortablebuildings.ItpartneredwithSchneiderElectricandAutomatedLifestyletodesignanidealworkspace,asmartoffice,thatallowsoperatorstomeasureandmanageenergyusageaswellasofficewellnessconditions.UsingSchneiderElectric’sEcoStruxure,JLLcreatedasingleplatformtomanageallfacilitysystems,optimizeenergyusageandenableoperationalefficiencyandsustainability.Itreducedbothenergyusageandoperationalcostsby30%.10Suchenergysavingsincommercialbuildingscancontributetopeakshaving,aswellastooverallenergyandemissionsreductionsinthepowergrid.ReducingpeakdemandthroughdigitalbuildingenergymanagementCASESTUDYThenumberofEVsontheroadispredictedtoriseto559million,with33%ofglobalfleetsexpectedtobepoweredbyelectricityby2040.EVchargingstationsareforecasttoincreasefrom1milliontodayto290millionby2040.11EVssaveenergythroughsuperiorenergyefficiency:theyare3.3timesasefficientasinternalcombustionengines(ICEs).12However,theydorequireelectricity.By2040,EVsareexpectedtoconstituteatleast5%ofglobalelectricitydemand.13Thatmaybeaconservativeestimate,consideringtherapidaccelerationinEVuptakethatcontinuestoexceedforecasts,andtherollingbansonICEsbygovernments,includingtheEuropeanUnion’sproposaltobanthemby2035.14Infact,by2050,EVsintheEUareexpectedtoconstituteatleast74%ofallvehicles.15TherecanbenodoubtthatmassconversiontoEVswillbeapowerfuldriverofincreasedelectricitydemand.Fortunately,chargingstationscanbedigitallyconnectedtothepowergrid,allowingthemtocontributetosystem-wideflexibledemandmanagement.EnsuringadailyoptimizedchargingscheduleforEVswillbecriticaltopreventingpotentialcongestionandflatteningpeaks,andwillbeespeciallyhelpfultoallowingEVstodrawonrenewableenergyatpeakgenerationperiods.Vehicle-to-grid(V2G)technology–EVswithdigitallyenabledbidirectionalcharging(Figure3)–willprovideadditionalsupporttothepowergrid.Increasingvehicle-to-gridprosumerismGettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemand10Vehicle-to-gridtwo-wayelectricityexchangeFIGURE3Bi-directionalchargingSource:ContributedbyABBV2Gwillaugmentthecapacityofthepowergridduringpeakdemandhours(peakshaving),relievelocalcongestionandhedgeforpowerintermittency.ItwillalsohelptoreducethetotalcostofownershipforEVdrivers,byenablingownerstosellexcessbatteryenergybacktothegrid.ProjectE-FlexisaV2Gcollaborationbetweenindustry,governmentandacademicsfundedbyInnovateUK.ItisthefirstprojectinGreatBritaintodemonstrateEVsperforminggridservices.Travelpatternsof70commercialvehicleshavebeenanalysedbyImperialCollegeLondontoassessV2Gsuitabilityandeconomicbenefits.Incurrentmarketconditions,V2Gchargerscanreducecostsforcommercialfleetoperatorsondualelectricitytariffs.Givenamoreopenmarketthatallows,forexample,time-of-usetariffsandsmallerbiddingrequirementsforgridservices,V2Gfleetscouldearnupto£100amonth,pervehicle.V2Gfleetscanalsobechargedattimesofmaximumrenewableinputandmakearealcontributiontomeetingacommercialentity’scarbonemissiontargets.16V2GDemonstrationProjectE-FlexinGreatBritainCASESTUDYGettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemand11Factoriesarenotonlyoneofthelargestdrainsonlocalpowergridsbutalsooneofthelargestcontributorstoemissions.ABBintroducedthe“MissiontoZero”conceptatitsBusch-JägercampusinLüdenscheidtoturnfactoriesfromenergyandcarbonliabilitiesintonet-zeroassets.AtthesubsidiaryinLüdenscheid,asolarpowerplantgenerates1,300MWhofclimate-neutralpowerayear,whichamountstoayearofelectricityfor340privatehouseholds,andenoughpoweronsunnydaystosupply100%ofthefactory’spowerrequirements,includingEVchargingforemployees.ThetechnologyatLüdenscheidcurrentlysaves744tonsofemissionsannuallyandthesiteisonitswaytobecomingcarbonneutral.Incombinationwithaco-generationplant,atLüdenscheidABBgenerates14%surplusenergy,whichitfeeds“intothepublicgrid,contributingtotheregion’spowersupplywithsustainablyproducedenergy”.17Industrial-scalepeakshaving,decarbonizationandresilienceCASESTUDYTheinterconnectednessoftheelectricalgridishighlybeneficialforsystemicefficiencybut,whenpartofthegridfails,itcanaffecteveryoneconnectedtoit.Microgrids,likehomeswithsolarpanelsandV2Gs,canhelpwithpeakshaving,resilienceanddecarbonization,butonanindustrialscale.Amicrogridisitsownself-contained,localecosystemofelectricitygenerationanduse.Normally,amicrogridoperatesconnectedtoandsynchronouswiththeregionalelectricalgrid,butitcanalsodisconnectfromtheregionalgridandfunctionautonomouslyincaseofmajorweathereventsorregionalpoweroutages.Microgridsusedigitalenergyandassetmanagementtooptimizeenergygeneration,storageanduseinsinglecampuses,likecommercialsiteswithofficesandfactories,orthroughoutentiredistricts.Theycanprovideonlyadditionaldistrictresiliencethroughbackuppower,andcanalsoallowregionstodrawontheirrenewableenergytoreduceemissions.Addingindustrial-scaleprosumerinputandresiliencethroughmicrogridsThefuturegridwillbeputtothetestcontinuouslybyincreasedclimatestress,risingelectricitydemandandgreateroveralldependenceonelectricity.Powersystemassetlifetimescanbe40yearsormore,sotoday’sinvestmentdecisionsmustsupporttheabilitytomeetthedoublechallengeofdecarbonizingandreinforcingthepowersystemforseveraldecades.Gridcomponents,likecircuitbreakersthatprotectandinsulatehealthyequipmentfromshort-circuitedequipmentinthegrid,mustberobustenoughtowithstandtheharshestclimateconditionsthroughdecadesofoperation.Beyondthat,existingdistributiongridhardwaremustbedigitallyretrofittedorreplacedasnecessarywithnewdigitally-enabledequipment.Embedded,cloud-enabledsensorscombinedwithartificialintelligenceandmachinelearningwillallowcontinuouspredictivemaintenance.Thiswillbeessentialtoensuringthereliableoperationofacomplexdistributiongridwithheterogeneousresources,evenintheharshestconditions.Whiledigitaltechnologyisnowthefundamentalenablerofadistributiongridthatissmart,resilientandnet-zero,newmarketmodelsarerequiredthatwillfullyempowerallstakeholderstousethattechnologytocontributetotheenergytransitionandtheachievementofanet-zerogrid.Existinggridarchitecturerequiresadigitalupgradetoensureresilienceandsustainability.Mandate3GettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemand12Newbusinessmodelswillmakeanet-zerogridaffordable2Traditionally,powersystemswereoperatedbyasingleorbyseveralnon-competingentitiesthatwereresponsibleforthetotalpowersupply,includingtheoperationofpowergeneration,powertransmissionanddistributiongrids.Independentenergyproducersweremostlylocatedatlargefactoriesorsimilarindustrialfacilities,andprovidedheatandelectricityfortheindustrialprocess.Transmissionanddistributionsystemoperatorswereresponsibleforintegratedsystemdevelopment,andinvestmentinthegridwasfrequentlycoordinatedwiththegovernment.Ineffect,inmostcountries,utilitieswerenaturalmonopolies.Inanattempttodemonopolize,manycountriesinstitutedderegulationschemes,prescribingclearandnon-overlappingrolesforpowergeneration,transmissionanddistribution.4.Itisparamounttoleveragethefullexpertiseandpotentialofallstakeholderstocontributetoanet-zerogrid.Todothat,barriersmustberemovedandregulationrevisedtoempowerbothexistingstakeholders(suchasutilities)andemergingstakeholders(suchasaggregators,prosumersandmicrogridoperators)toefficientlyaccessandoperatewithinthedifferentsectors(powergeneration,transmissionanddistribution).5.Interoperabilityanddatatransparencywillbecriticaltoprovidingthemarketsignalsneededtoempowerallmarketplayerstocontributetonet-zerogriddevelopment.6.Newbusinessmodelsareneededthattransfercapitalexpendituresandriskfromprosumers,aggregatorsandmicrogridstofinancialprovidersandinstitutionalinvestors.Crowdsourceforanet-zerogridisneeded,bymakingitaffordableandattractiveforeveryone.Botholdandnewplayersmustbeempoweredtocontributefullytoacceleratethetransitiontoanet-zerogrid.Mandate4KeymandatesHistoricalderegulationUnfortunately,whatworkedforthepreviouspowergridhasbecomeobsoleteandclunkyintheevolvingdistributiongridmarketofDERsandprosumers.Thankstosizablepublicincentivesandmaturingtechnology,thepasttwodecadeshavewitnessedtheincreasedadoptionofrenewablesandDERsintothegrid,includingwindandsolar,batterystorageandEVs.However,DERsarefrequentlylocatedclosetoacustomerandtheyhavesignificantlysmallercapacitythantraditionalgenerationplants.DERplayersaretoosmalltobecompetitiveinatraditionalenergytradinglandscape.Asaresult,animportantnewrolehasemerged,thatoftheaggregator,whousesdigitaltoolstoconsolidateandpackageelectricityfromdifferentDERs.Theaggregatorisanew,professionalplayerEffectivemarketmodelsfornewnet-zerotechnologiesGettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemand13Insomecases,thedeploymentofcontrollableDERsmayallowutilitiestofurtheroptimizegridinvestmentsandgridexpansion.Forexample,installingstoragesystemsinspecificlocationsofthegridmightenableutilitiestocollectrenewableenergygeneratedbyprosumersandthendeployitintelligentlytooffsetpeakdemand.Foravarietyofreasons,however,includingapotentialconflictofinterestwithgeneratingcompanies,somecountriescurrentlyprohibitutilitiesfromowningandoperatingstorageassets.Anopenandprogressivedialogueonthefutureuseofstorageassetsisrequiredtoensurethattheutilizationoftheseassetscanbeoptimizedtoincreasedemandflexibility,acceleraterenewableintegrationandoptimizegriddevelopmentandexpansion.NewmarketmodelsshouldempowerbothnewandsmallerplayerslikeaggregatorsaswellashighlycompetenttraditionalplayerstoserveandintegrateprosumersandDERsintothegrid.Utilities,andevencompaniesthatoriginallydevelopedbusinessinoilandgasenergy,havedeepcompetenceintheindustryandontheconsumerside.Theyalsohavedeeppocketstoadvancenet-zeroprogress.Afaircompetitionframeworkcanengagebothsmallandlargeplayersintheaccelerateddevelopmentofaresilientnet-zerogrid.Enelinvitesbotholdandnew,largeandsmallgridplayerstotestoutnet-zerogridparametersinavarietyofscenariosviatheirdedicatednetworksimulator,helpingplayerstoprepareformarketactivity.Faircompetitionframeworktobalancelarge-andsmall-scalenet-zeroaccelerationTheEnelFlexibilityLabisanetworksimulatoropentothirdpartiesthatreproducesatypicalpowergridandconsumerbehaviours.Allpowergridstakeholders,fromtechnologymanufacturersandenergycommunitiestotransmissionanddistributionsystemoperators,cantestvariousgridperformanceparameters,fromflexibledemandanddigitalinteroperabilitytointerfaces,communicationprotocolsandsecurity.TestingflexibledemandparametersviaanetworksimulatorCASESTUDYwhoreceivesacommissiontomanageenergytradingandgridservicetradingbetweenprosumersandtraditionalgridoperators.Itisakeyroleinthenewdistributiongridsystem,helpingtocreateaneconomyofscaleindemandflexibility,andaddinganelementofoversightandmanagementinbalancingtheinputandoutputofelectricityacrossanarrayofsmallerconnectionpoints.Aggregatorsarepresentinmanycountries.Theirroleshavebeensupportedbyregulationthatallowsnewfinancialandtechnicalmechanisms,andmarketdevelopment.SwiftregulatorychangeinmorecountrieswillbecriticaltoenablingaggregatorsandsupportingflexibledemandbetweenDERsandtraditionaloperators.GettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemand14Tofullydevelopanewnet-zerogridmodel,thetransitiontoanewsetofmarketsignalsisnecessary.Smartgridconnectivitywilloffersystem-widemanagementandsystemicmarketinsights,aswellasdynamicandgranularmarketsignalsthatcanhelpauthorities,operatorsandinvestorsstayontopofchanges.Digitaldatawillalsoprovidesignalsonlocalgridcapacityforrenewableuptakeandenergydemandpatterns,andothermarkerswillallowinvestorstomakemoreinformeddecisionsonwhichtechnologiesshouldbedeployed,andwhere.Byofferinggreatertransparency,pricingindicatorsandmarketstability,digitaldatahasthepotentialtoattractenormousinvestment.Onceagain,largeandsmallplayersshouldbeallowedtransparentandnon-discriminatoryaccesstogridinsightsthatwouldfacilitaterenewableenergyuptakeandfaircompetition.Inthemeantime,itisalsoimportanttonotethatdatascientistsareapplyingmethodsofdatasharing,likeanonymizationoraggregation,whichwillallowsuchcriticalinsightswhilepreservingtheprivacyofindividualusers.Harnessingdigitalizationtostrengthentheaccuracyofmarketsignalswillalsoallowgovernmentstostepbackfromthekindsofblanketinterventionslikethosethathaveleftthemarketinitscurrentsiloedcondition,andwhichcannotaccuratelyrespondtoarapidlyevolvingandunpredictabletechnologymix.Interoperabilityisanotherimportantaspectofpowersystemtransformation.Itsscopereachesbeyondensuringtechnologiesworktogethertoensuringcommercialflexibilityforconsumers.Forexample,EVusersshouldbeabletochargetheirvehicleseasily,usinganypaymentoption.Tosucceedinimplementingthetechnologythatwillachievenetzeroingridsandincommunities,itisnecessarytodisincentivizeproprietaryplatformsandincentivizeanewspiritofcollaborationandopenecosystems.BusinessFinlanddemonstrateshoweasyitcanbetobalancethesocietalgoalofachievingnetzerowiththeneedforareturnoninvestment,byincentivizingcollaborationandopeninnovationbetweentechnologycompanies,withtheaimofcreatinganet-zeroelectricityplatform.AnewstandardofcollaborationandinteroperabilityFinland’stargetistobecomecarbonneutralby2035.Toachievethis,thecountryhasestablishedarobustgovernment-fundedprogrammethatappliesanopencollaborationmodeltodevelopingtechnologiesthatwilladvanceFinland’snet-zerogoal.BusinessFinland(thefunding,tradeandinnovationarmoftheFinnishMinistryofEmploymentandtheEconomy)hasprioritizedtheGreenElectrification2035programme.Severalleadingtechnologycompaniesarecollaboratingtocreateanewintegratedelectricityplatformthatwillcombine5Gcommunications,datamanagement,electricalengineeringandpowergridtechnology.Theaimisanewinteroperable,carbonneutralelectricityplatformthatiscontrollable,safeandscalableandthatoptimizessystem-levelenergyefficiencyandreliability.18GreenElectrificationProgrammetoMakeFinlandCarbonNeutralby2035CASESTUDYInteroperabilityanddatatransparencywillbecriticaltoprovidingnewnet-zeromarketsignals.Mandate5Byofferinggreatertransparency,pricingindicatorsandmarketstability,digitaldatahasthepotentialtoattractenormousinvestment.GettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemand15Itiscleartoallthattheinitialinvestmentintechnologyfortheenergytransitionpaysoffovertimeandcancreatesystemvaluefortheenvironment,societyandtheeconomy.19Atthesametime,governmentsubsidieswerelargelyresponsiblefortheexpansionofsolarandwindtechnologiestothelevelofeconomicfeasibility.Butthisisaneweraofglobalconsensusonclimatechangeandtheneedforclimateaction.Largeenergyplayers,institutionalinvestorsandinsurersareshowingamuchgreaterappetitetofundandthusacceleratethisphaseoftheenergytransitionandtheachievementofnetzero.Asaresult,apowerfulnewbusinessmodelhasemergedthatofferstheopportunitytocrowdsourceforanet-zerogrid,byempoweringprosumersandotherplayersofrestrictedcapitalmeanstomonetizetheircontributionstothenewdistributiongridmarket.Newbusinessmodelsshouldtransfercapitalexpendituresandriskfromsmallerplayerstofinancialproviders,effectivelycrowdsourcingforanet-zerogrid,bymakingitaffordableandattractive.Mandate6DERsempowerconsumerstobecomeprosumers,thusmakingthemanintegralpartofthenewuser-empowereddistributiongrid.However,severalhurdlescouldstandinthewayofthatopportunity.Chiefamongthemarecapitalcosts,operationalandmaintenancecostsand,ofcourse,theskillstoassess,buy,installandmanagesuchequipment.Thisisonereasonwhythemarketforenergyasaservice(EaaS)isexpectedtogrowfrom$49.6billionto$88.4billionby2027.20EaaSshiftsthecostandresponsibilityofthedesign,installation,maintenanceandevenmanagementofDERsfromprosumerstoserviceproviders.Thoseserviceproviders,inturn,cannowlooktoinsurers,energycompaniesandinstitutionalinvestorsreadytotakeoverbothcapitalforretrofittingandevenoperationalexpenses,inexchangeforreasonablepolicypremiumsandperformancepaybacks.Tofullyenablethemarketuptakeoftechnologiesthatwillhelpachieveanet-zerogrid,itisvitalthatallstakeholdersareempoweredtocontribute.Amarketwithfaircompetitionanddataaccesstoallmustbecreated,whereparticipationisaffordableandeasy.Afterthat,thefinalstepinfullyactivatingthesystem-wideefficiencyofflexibledemandwillbeanewgovernancemodelthatenablesoverseeingthesystemandaligningittonationalandglobalnet-zerotargets.Energyasaservicetoactasamajornet-zerocatalystGettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemand16Anewcomprehensivesystemgovernancemodelwillbevitaltoensuringaseamlessandresilientnet-zerogrid37.EconomicreformisneededtoensurethattheforecastoftheIEAfor$260-820billiontobeinvestedannuallyintheglobaltransformationofthegridinfrastructurefromnowto203021isdedicatedtotechnologies,valuepropositionsandbusinessmodelsthatsupportanet-zerofuture.8.Anofficialsystemarchitectfunctionisrequired,withthecompetenceandauthoritytooverseethedevelopmentofanintegratednet-zeroenergysystemthatbenefitsallpeople.9.Standardizedauditsmustbeimplementedthatusenewlyavailablesystem-widedatatoensuretransparentandtimelyreportingagainstnationalandinternationalnet-zerotargets.Economicreformmustensureallfutureinvestmentisdedicatedtoanet-zerofuture.Mandate7KeymandatesGovernmentscanenablebillionsinsavingsbyincentivizingdemand-sideflexibilitytomeetrisingenergydemands.Afterabriefdropinenergydemandin2020duetotheeffectsoftheCOVID-19pandemic,whichresultedinadropinglobalemissionsof5.8%,thelargestdeclinesinceWorldWarII,22theIEAforecaststhattheresurgentdemandforcoalinelectricitygenerationwilldriveupglobalenergy-relatedCO2emissionsby1.5billiontonsin2021.23With$260-820billiontobeinvestedannuallyinthedevelopmentoftheglobalgridinfrastructurefromnowto2030,itisparamountthatstepsbetakennowtoensurethosefundsarededicatedtothetechnologies,valuepropositionsandbusinessmodelsthatsupportanet-zerofuture.Thefirststepwillbetoassesscurrentpoliciesandsupportschemes,andtoensurethatdemand-sideflexibilitysolutionsarenotdiscriminatedagainst.Stateaidschemesoftenviewdemand-responsesolutionsaslesseffectivethantraditionalincentives,likecapacityremuneration(payinggeneratorstobereadytosupplyelectricityaccordingtodemand)orinfrastructureexpansion.Thisislargelyduetothehighlydistributedandthereforepotentiallylessmanageablecharacterofdemand-responsetechnology.Often,demandresponseisnotpartoftheincentiveschemeatallbecausethefocusispurelyonGettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemand17generatingcleanelectricity.Asalreadymentioned,one-sidedgenerationinvestmentmissesthevitalbalanceofsupplyanddemandinthegrid.LikeChina’sstrategyfordevelopingaflexibledemandresponse,theEUEnergySystemIntegrationStrategyacknowledgestheroleofdistributedenergysourcesanddemandflexibilityinsupportingamoreenergy-efficientsystemoverallandinbringingcleanelectrificationandtheinclusionofrenewableenergytoallend-usesectors(building,transportandindustries).24Hereagain,puttingDERonanequalfooting,thistimewithinfrastructureexpansionorcapacityremunerationschemes,representsanuntappedopportunitytoempowereverydayconsumersandbusinessestobecomeactivecontributorstoanet-zeroelectricitymarket.Infact,thecaseofREVinNewYorkillustrateshowsuccessfulthisbalancedapproachtocreatingaviablemarketforbothlargeandsmalloperatorscanbeinacceleratingnet-zerogriddevelopment.TheEuropeanCommissionestimatesthatnon-wirealternatives(using“distributedenergyresourcesandmicrogridstodeferorreplacetheinstallationofmoretraditionalwiresandpoles”26),includingtheactivationofdemand-sideflexibilityatthedistributiongridlevel,wouldsaveuptobillionsperyearacrosstheEuropeanUnionfromnowuntil2030.Thosesavingswouldbetheresultsimplyofavoidingunnecessarygridreinforcements,backupgenerationandfuelcosts.27In2014,facedwitha$1billionsubstationexpansiontomeetrisingelectricitydemand,NewYorkdecidedtoexploreanotheroption.TheReformingtheEnergyVision(REV)wasborn,asetofmulti-yearregulatoryproceedingsandpolicyrevisionsintendedtotransformthewayelectricitywasproduced,boughtandsoldinNewYork.REV’smajorgoalwastocreateadistributiongridthatbalancedDERandutilityinput.ItrestructuredNewYork’sutilityratemakingandrevenuemodelstoalignwiththedropinrenewableenergypricesandtosupportthegreaterintegrationofrenewableenergygenerationandsmartgridtechnologies.Aninnovativeprojectforitstime,REVhasnotbeenwithoutitsshareofchallenges,fromstoragetoquestionsoffaircompetition.Nevertheless,overtime,themodelhasproventhatputtingdemand-sideflexibilityonanequalfootingwithgenerationopensupanewdimensionofmassnet-zerogridengagement.25ReformingtheEnergyVision(REV)inNewYorkCASESTUDYAnofficialsystemarchitectfunctionisrequiredwiththecompetenceandauthoritytooverseeanintegratednet-zerosystem.Mandate8Severalfactorsalongthepathtoanet-zerogridpresentchallengestothecurrentsystemofgovernance.Firstandforemostistheabsenceofanentitywithboththeauthorityandthecompetencetoorchestratethefurtherdevelopmentofthedigitalizedintegratedenergysystemandsteerittonetzero.Accomplishingthatwillrequireanewmultidisciplinaryfunction–asystemarchitect–withanextraordinarilybroadknowledgebase,fromnationalandintergovernmentalpolicytoclimatescience,renewableenergy,digitalization,traditionalgridoperation,distributiongridarchitectures,DERs,microgrids,EVs,buildings,industryandconsumers.Nevertheless,thatlevelofsystemcoordinationwillbeneededtomovewiththespeedandagilitynecessarytoaccomplishadecadeofurgentandintensiveworktomeettheParisAgreementtargets.Thesystemarchitecthasakeyroletoplayinidentifyinganddevelopingthestandardsneededtoenablethesystemicadoptionofrenewableenergy,DERsandflexibledemandresponse.Itmustensurethetimelyintegrationofexistingandnewtechnologiesandservicestosupportaccelerationtowardsanet-zerofuture.Underthissystemicapproach,governmentsshouldfocusonshapingenduringpolicyframeworksaroundnet-zerooutcomesthataddressclimate,economicandalsosocietalconsiderations.Todothat,policy-makersshouldreviewexistingregulationandintroduceasystemofregulatoryandmarketincentives/disincentivestoengagebothtraditionalandemergingmarketplayerstooperateacrosspowergeneration,storageandmanagement.Toeffectivelyachievenet-zerotargets,systemarchitectswillneedtotakeasociety-wideapproach,notonlywithintheirownnationalbordersbutincollaborationwiththeircounterpartsinothercountries.GettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemand18Thesystemarchitectwillneedtocounterescalatingclimatehazardswithclimateresilienceinthegrid.Forclimateactiontoworkforanyone,itmustworkforeveryone.Whiletheendeavourtoimprovetheglobalclimateoutlookcontinues,extremeweathereventsinrecentyearsalsohighlighttheneedtocounteractincreasingclimatestressbyplanningformorefrequentormoreextremecontingenciesinordertoensureresilienceinthepowergrid.Thesystemarchitectwillberesponsibleformakingthegridresilienttomoreintenseclimatestressors,anintegralpartofpolicyandplanning,notonlyingridconstructionandoperationbutalsoforindustriesthatareverygrid-dependent.ToolsliketheIEAClimateResiliencePolicyIndicatorcanhelpsystemarchitectscomparetheircountry’sclimatehazardlevelswiththeirpolicypreparedness.28Toeffectivelyachievenet-zerotargets,systemarchitectswillneedtotakeasociety-wideapproach,notonlywithintheirownnationalbordersbutincollaborationwiththeircounterpartsinothercountries.Climatechangeisaborder-freeaffliction,andtheenergytransitioncanonlytrulybesolvedifallpeopleeverywhereareincludedintheremedy.TheUnitedNationsSustainableDevelopmentGoals(SDGs)offerguidelinesforensuringthatnet-zeroinitiativesareinclusiveandthereforeeffectiveforall.29Inparticular,targetednet-zerogridcommunity-wideimplementation,marketopportunitiesandregulationsshouldprovideopportunitiesfordisadvantagedpopulationstoimprovetheirsocio-economicstatus,inalignmentwithSDG7,ensuringaccesstoaffordable,reliable,sustainableandmodernenergyforall;SDG8,promotingsustained,inclusiveandsustainableeconomicgrowth,fullandproductiveemploymentanddecentworkforall;SDG10,reducinginequalitywithinandamongcountries;andSDG11,makingcitiesandhumansettlementsinclusive,safe,resilientandsustainable.GettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemand19Severalcountrieshavecreatedorganizationstotacklevariousaspectsofasystemarchitect’srole.Dutiesvaryfromadvisorytolegislativeresponsibilities.OneexampleistheElectricPowerResearchInstitute(EPRI)intheUnitedStates.TheEPRIisanindependent,non-profitorganizationthatconductsresearchonelectricitygeneration,deliveryandusetoenhancethequalityoflifeintheUSandinternationallybymakingelectricitysafe,reliable,affordableandenvironmentallyresponsible.However,theEPRIdoesnothavelegislativeresponsibility.OtherrelevantorganizationsintheUnitedStatestotakethisroleincludetheFederalEnergyRegulatoryCommission(FERC),anindependentagencythat“regulatestheinterstatetransmissionofelectricity,naturalgasandoil”30aswellasnaturalgasandhydropowerprojects,andtheNorthAmericanElectricReliabilityCorporation(NERC),anot-for-profitinternationalregulatoryauthoritythataimsto“assuretheeffectiveandefficientreductionofriskstothereliabilityandsecurityofthegrid”.31IndependentenergyregulatoryauthoritiesintheEUcouldtakeupthisroleatthenationallevel,basedontheirpoliticalindependenceandstrategicroleintheimplementationofEurope’senergyandclimatepolicies.InChina,theChinaElectricPowerResearchInstitutecoversthesameadvisoryandresearchfunctionastheEPRIbutithasmoreauthorityandisdirectlyresponsiblefortheimplementationoftheDepartmentofEnergy’sstrategy.Todate,nocountrieshaveasingleentitywithsuchbroadandprofoundoversight.Theroleofthesystemarchitectmustbepoliticallyindependent.Thevitalimportanceofthesystemarchitect’sroledemandsthatitremainindependentofshort-termpolitics.Aglobalreviewoflow-carbonpolicyandregulationtodaterevealsdisparateandfluctuatingstandardsandapproachesinfluencedbyshort-termpoliticaldecisions.Thishasprovenamajorbarriertobothinvestmentandthesuccessfulcompletionofprojects.Ithasalsoresultedinadisharmonizedinternationallow-carbonlandscapeandalackofinteroperability.Actionstoachievenetzeromustbeperformedinaglobalcontext,withalong-termintegratedview,assuringpolicy,regulatoryandeconomicstabilityfornet-zeroprogrammes.Thefunctionofthesystemarchitectcanbeimplementedinvariouswaysinstitutionally;thekeyistoensurethatthepersonhasthemandateandpowerstoexecutetherolewell,andappropriatefundstobeabletoattracttherequiredmultidisciplinaryskillsinsufficientquantity.TheFuturePowerSystemsArchitectureprogramme,undertakenbyEnergySystemsCatapultincollaborationwiththeInstitutionofEngineeringandTechnologyandsponsoredbyInnovateUK,hasusedsystemsengineeringtechniquestoarticulatecomplex,systemicelectricityissues.Theprogrammeaimsto“identifythenewcapabilitiesrequiredbytheelectricitysystemin2030”.32Theworkidentifiedandvalidatedneededfunctionsandinnovationrequirements,andexplorednewwaystoovercomebarriersanddeliveragile,flexibleandstakeholder-inclusivechangegovernance.Thekeychallengeidentifiedwastheneedtobuildintensiveengagementbygovernmentandthewholeenergyindustry,andcreateasharedvisionacrossthisemergentandhighlycomplexstakeholdergroup.ThisworkcontinuedinlaterphasesandisnowincludedinthecurrentCodeGovernanceReviewinprogressintheUnitedKingdom.AnindependentadvisertogovernmentalregulationbodiesCASESTUDYActionstoachievenetzeromustbeperformedinaglobalcontext,withalong-termintegratedview,assuringpolicy,regulatoryandeconomicstabilityfornet-zeroprogrammes.GettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemand20ProgressagainsttheParisAgreement’snationallydeterminedcontributionsandtheUNSustainableDevelopmentGoalsmustbetracked.Mandate9Thesystemarchitectwillseektofullyunderstandtheneedsofallstakeholderstoestablishasharedstrategicdirection.Thearchitectwillundertaketheanalysisnecessarytobuilda“living”roadmapfornetzeroandwillassurethetranslationoftheroadmapintopracticalexecution.Anotherresponsibilityistoalignpublicenergy-sectorstrategyandpolicymandateswithcarbonbudgets,nationalnet-zerogoalsandnationallydeterminedcontributionstotheParisAgreement.Byleveragingnewandrobustdatainsightsfromdigitalizedgridsystems,thesystemarchitectwillbeabletomakemoretimelydecisionsonstrategicdirection,planningandimplementation.Thearchitectwillbeabletomonitorandmeasuresuccessregularlyandtransparentlytoensurethat,ateverystep,thejourneyismovinginthedirectionofnetzeroandthattheentirenationalcommunityisincludedinthatjourney.Amultidisciplinaryauditfunctionshouldbeestablishedasacomplementtothesystemarchitecttoensureongoingenergysystemresilience,toassesstheallocationoffundstoprojectssupportingnet-zeroprogress,andtoassesstheaccuracyofprogressreportsbothwithinthesystemandagainstnationalandinternationalclimatetargets.Digitalizationwillonceagainbethechiefenablerforboththesystemarchitectandauditorroles,providingbothgranularandsystem-widedatainsightsandcontrols.Thenewsystemarchitectrolewilloffervitalsystem-wideoversightandstrategicdevelopmentofthesmartgridtoensurecoherenceandinteroperabilitywithinthesystem,fosterfairandrobustmarketcompetition,aligngridinvestmentanddevelopmentwithnet-zerogoalsatthenationalandgloballevels,andensuresociety-wideinclusioninnet-zeroprogressandbenefits.GettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemand21ConclusionAnet-zerofutureby2050ispossible.Manyofthetechnologiesneededtoachieveanet-zerofutureareavailabletoday.Onthesupplyside,thecostofutility-scalesolarenergygenerationisnowcheaperthanfossilfuelsinmanycountries.33Onthedemandside,thetransport,buildingsandindustrysectorsareundertakinganintensivedecadeofelectrification.Still,withonly29%ofglobalelectricitygeneratedbyrenewablesin2020,34thejobisnotfinished;theenergytransitionremainsincomplete.Fortunately,aneweraofglobalconsensusontheurgentneedforclimateactionhasdawned,andpublicsentimenthasgivenrisetoaglobaltrendtowardscleanelectrification.Thishasresultedinapowergridthatiscontinuallyevolvingtosupportbothnewdemandsites,likeEVs,aswellasnewelectricityinputsitesintheformofDERs,includingsmallerwindfarms,homesolarpanels,hydrogenfuelcells,batterystorageandEVswithvehicle-to-gridcharging.Thedigitalizationofthepowergridalsooffersahistoricopportunitytochangethewayofthinkingaboutelectricity.Insteadofone-waydelivery,today’sgridhasthepotentialtoofferatwo-wayexchangetovirtuallyeveryelectricityuser.Itisaprofounddevelopmentthatoffersthechancetocrowdsourcefornetzero,byempoweringeverydaycitizenstoshiftfrompuredemandandconsumptiontoprosumerism–thatis,bothproducingandconsumingelectricity,andevensellingitbacktothegrid.Toutilizethesetechnologiesfully,newmarketmodelsandregulationsarenecessarytotransfercapitalinvestmentandrisktoinstitutionalinvestorsandempowerallstakeholderstobecomeactivecontributorstoanet-zeropowergrid.Inaddition,anewgovernancemodelharnessingtheinsightsprovidedbydigitalizationwillhelptodevelopanintegratedandefficientelectricitysystemthatbenefitsallpeopleanddeliversagainstnationalandinternationalnet-zerotargets.Actnow,actasone,foranet-zerofutureGettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemand22ContributorsLeadauthorsEricBrownChiefTechnologyOfficer,EnergySystemsCatapult,UnitedKingdomAminaHamidiChiefTechnologyOfficer,Electrification,ABB,SwitzerlandPhilipNewChiefExecutiveOfficer,EnergySystemsCatapult,UnitedKingdomMarijaZimaHead,SmartCitiesandSolutions,ABB,SwitzerlandTheWorldEconomicForumthanksthefollowingcontributors:LuisBadesaResearchAssociate,ImperialCollegeLondon,UnitedKingdomOliviaCoker-DeckerGlobalThoughtLeadershipManager,Electrification,ABB,SwitzerlandVincenzoConfortiHead,GovernmentRelationsandPublicAffairsfortheEuropeanUnion,ABB,SwitzerlandAgustínDelgadoChiefInnovationandSustainabilityOfficer,Iberdrola,SpainCansinYamanEvrenosogluPrincipalExpertandConsultingEngineer,ResearchCenterforEnergyNetworks(FEN),ETHZurich,SwitzerlandFrancescaGostinelliHead,GroupStrategy,EconomicsandScenarioPlanning,Enel,ItalySaulGriffithFounderandChiefScientist,OtherLab,RewiringAmerica,USABirgitteKeulenSeniorClimateAdvisor,MobilityDepartment,EuropeanInvestmentBank,LuxembourgHarikishanNarayananVice-President,DistributionSolutions,ABBElectrification,SwitzerlandAlessandroPalinPresident,DistributionSolutions,ABB,SwitzerlandVincentPetitSeniorVice-President,GlobalStrategyProspective,SchneiderElectricHongKong,HongKongSARDavidePuglielliHead,ScenarioPlanningandGroupStrategicPositioning,Enel,ItalyVivianaVittoHead,MarketStudiesandStrategicAnalysis,EnelGlobalInfrastructureandNetworks,ItalyWorldEconomicForumLouiseAndersonManager,ElectricityIndustry,ShapingtheFutureofEnergy,MaterialsandInfrastructure,WorldEconomicForumDiegoFuentesLead,PartnerEngagement,StrategicPartnerships,WorldEconomicForumLLCKristenPaneraliHead,Energy,MaterialsandInfrastructureProgrammes,WorldEconomicForumGettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemand23Endnotes1.InternationalEnergyAgency(IEA),GlobalEnergyReview2021,April2021.2.IntergovernmentalPanelonClimateChange(IPCC),ClimateChange2021:ThePhysicalScienceBasis,WorkingGroupIcontributiontotheSixthAssessmentReportoftheIntergovernmentalPanelonClimateChange,CambridgeUniversityPress,2021.3.InternationalEnergyAgency(IEA),NetZeroby2050:ARoadmapfortheGlobalEnergySector,July2021.4.Ritchie,Hannah,“Sectorbysector:wheredoglobalgreenhousegasemissionscomefrom?”,OurWorldInData,18September2020.5.McIntyre,Yvonne,GrantCarlisleandJackieWong,“PresidentBiden’sBoldPlantoBuildaCleanElectricGrid”,NRDC,1April2021.6.Nexans,ElectrifytheFuture,“WindsofChange”,CapitalMarketsDayPresentation,17February2021.7.IEA,NetZeroby2050,op.cit.8.InformationprovidedbyIberdrola;seealsoIberdrola,“STARProject:aglobalbenchmarkinsmartgridsinvestments”,2021.9.InternationalRenewableEnergyAgency(IRENA),“IRENAandChinaStateGridAgreetoAdvanceTransitionThroughPowerSystemEnhancements”,PressRelease,12April2021.10.InformationprovidedbySchneiderElectric;seealsoSchneiderElectric,“JLLcreatesoptimalworkplaceexperience”,2021.11.McKerracher,Colin,ElectricVehicleOutlook2021,BloombergNEF,2020.12.Sioshansi,Fereidoon,TheImpactofElectricVehiclesonElectricityDemand,EnergypostEU,2018.13.Ibid.14.EuropeanCommission,Strategy,Priorities2019-2024,“DeliveringtheEuropeanGreenDeal”,2021.15.ElementEnergy,“Batteriesonwheels:TheroleofbatteryelectriccarsintheEUpowersystemandbeyond”,Transport&Environment(T&E),2019.16.Blatiak,Alicia,andPaigeMullen,“E-FlexElectricVehiclesDemonstrateFrequencyResponseProvisionthroughV2GTechnology”,ImperialCollegeLondon,27April2021.17.Mehta,Tarak,“ABB’sMissiontoZero;arealityfortoday”,ABB,10May2019.18.Partanen,Jarmo,etal.,GreenElectrificationInnovationEcosystem:GreenE2,LUTUniversity,VTTTechnicalResearchCentreofFinland,CLICInnovation,December2019.19.WorldEconomicForum,“SystemValue”,https://www.weforum.org/projects/system-value(accessed4October2021).20.ReportLinker,GlobalEnergy-as-a-ServiceIndustry,May2021.21.IEA,NetZeroby2050,op.cit.22.InternationalEnergyAgency(IEA),“GlobalEnergyReview:CO2Emissionsin2020:UnderstandingtheimpactsofCovid-19onglobalCO2emissions”,2March2021.23.Ibid.24.EuropeanCommission,Energy,Topics,Energysystemintegration,“EUstrategyonenergysystemintegration”,15July2021update.25.ConsolidatedEdisonCompanyofNewYork,TransmissionPlanningDepartment,TheLong-RangeTransmissionPlan2018-2028,October2018.26.SvanholmErik,“MicrogridsasNon-WiresAlternatives”,MicrogridKnowledge,GuestPost,9December2019.27.Ibid.28.Birol,Fatih,“Theworld’selectricitysystemsmustbereadytocounterthegrowingclimatethreat”,InternationalEnergyAgency,12July2021.29.UnitedNationsFoundation,“SustainableDevelopmentGoals”,https://unfoundation.org/what-we-do/issues/sustainable-development-goals/?gclid=Cj0KCQjwkIGKBhCxARIsAINMioLUEiVtqRUfqNI7xBu46AL64SAucyiZ59i5mYh3BxRKhG0CYGgkvk8aAoa2EALw_wcB(accessed11October2021).30.Giri,Jay,“DataandModelingExchangeRequirementsforDesignandOperationofElectricityGridInterconnection”,NAPSNetSpecialReports,NautilusInstitute,29September2020.31.Ibid.32.EnergySystemsCatapult,“FuturePowerSystemsArchitecture”,2019.33.Lazard,“LevelizedCostOfEnergy,LevelizedCostOfStorage,andLevelizedCostOfHydrogen”,19October2020.34.IEA,GlobalEnergyReview2021,op.cit.GettingtoNetZero:IncreasingCleanElectrificationbyEmpoweringDemand24WorldEconomicForum91–93routedelaCapiteCH-1223Cologny/GenevaSwitzerlandTel.:+41(0)228691212Fax:+41(0)227862744contact@weforum.orgwww.weforum.orgTheWorldEconomicForum,committedtoimprovingthestateoftheworld,istheInternationalOrganizationforPublic-PrivateCooperation.TheForumengagestheforemostpolitical,businessandotherleadersofsocietytoshapeglobal,regionalandindustryagendas.