1. Introduction.
The energy transition to carbon neutrality, exponentially advancing digital technologies such as AI, blockchain, and 5G, and the ongoing population decline in some countries are significantly and rapidly transforming the energy industry. The fourth industrial revolution, dubbed "Society 5.0" in Japan, has already begun, and its realization will require the transformation of utilities through digitalization.
There is a strong interdependence between the power grid and the digital infrastructure. With the rapid growth of distributed renewable energy sources with fluctuating output, it has become essential to increase the sophistication of monitoring, control, forecasting, and analysis of the power grid using digital technologies. On the other hand, the exponential growth of digital technologies is rapidly increasing the energy consumption of digital infrastructures, but the cyberspace must be driven by decarbonized energy sources with difficult output regulation, such as renewable energy and nuclear power. In other words, the power grid and the digital infrastructure are inseparable, and the infrastructure that can do both as a whole is the foundation for a new industrial revolution through cyber-physical fusion.
This paper describes the MESH concept, which is an areal infrastructure for the realization of a cyber-physical social system that TEPCO Power Grid is working on, and outlines the DX program that we are promoting to realize the concept and the platform concept that further develops it.
2. New challenges in the power system and the MESH concept
Rapid energy transitions and digital transformation pose significant challenges to the power system. Figure 1 shows the status of solar PV penetration in the TEPCO power grid, which shows the rapid increase of solar PV generation since the introduction of the feed-in tariff. As a result, there is a significant impact on voltage fluctuation/flicker, grid congestion, and supply/demand balance within the power system.
Figure 1: Installed capacity of PV generation in TEPCO Control Area
Figure 2 shows the daily power consumption in the TEPCO area during winter and spring in 2022. Since solar power generation is unlikely to occur on cold, snowy days in winter when electricity consumption is high, the supply-demand balance is maintained by operating pumped storage power generation at maximum capacity to compensate for the lack of supply capacity from fixed power sources, whose installed capacity has declined sharply since the deregulation of the electricity market.
Electricity consumption is lower in the spring and fall, when air conditioning is used less, and especially during holidays when factories are not operating. The balance between supply and demand is maintained by storing excess power through pumped storage. To maintain the balance between supply and demand from 2024, it is expected that the output of photovoltaic power generation will need to be controlled.
In other words, the electricity supply and demand have a structure that repeats shortages and surpluses on a seasonal basis, with shortages in summer and winter and surpluses in spring and fall, and this trend is expected to increase as renewable energy increases.
Figure 2: Electricity system with recurring surpluses and shortages
Transmission congestion and grid reinforcement needs are also emerging due to the increase in renewable energy. The IEA has announced that countries should focus on digitizing and modernizing their distribution grids and nearly double global grid investment, which has been stagnant for more than a decade, to more than $600 billion per year by 2030 in order to meet climate change targets [1].
Turning to the demand side. In Japan, the popularity of electric vehicles lags behind that of Europe, the U.S., and China, and electricity demand continues to decline slowly due to population decline and advances in energy conservation. On the other hand, many new hyperscale data centers are planned, and electricity consumption in digital infrastructure is expected to grow rapidly. Figure 3 shows the projected interconnection capacity of new data centers that have accepted interconnection contracts by the end of 1H2023 in the TEPCO control area. Over the next five years, the number of new data centers to be interconnected is expected to reach 6 GW, or the equivalent of six nuclear power plants, and their electricity consumption is expected to reach more than 15% of the current electricity consumption in the TEPCO area. The use of data centers that require large amounts of computational processing, such as generative AI, is likely to continue to increase.
On the demand side, electricity consumption will eventually increase due to sector coupling, such as the electrification of transportation and heating, to achieve carbon neutrality and increase productivity. This new demand for electricity will be managed automatically by AI. Both digital infrastructure and power grids will be needed to optimize the operation of physical infrastructure, such as roads and other transportation networks that support logistics and human flows.
Figure 3: Applications for new data centers
This rapid increase in energy consumption due to digital infrastructure and electrification is feared to lead to power shortages in many countries. According to the latest forecast by Gartner, an IT and digital research and advisory company, 50% of G20 members will experience monthly electricity rationing, turning energy-aware operations into either a competitive advantage or a major failure risk by 2026 [2].
To address these challenges, we advocate a composite infrastructure called MESH, an acronym for Machine-Learning Energy System Holistic. MESH combines the power grid and digital infrastructure and extends them in a mesh-like, areal fashion. A conceptual diagram is shown in Figure 4.
The key to making this happen is cloud computing. Cloud computing virtualizes the instances that perform the computations so that applications that can tolerate some latency can be computed anywhere in the world. For example, shifting a data center's workload according to the output of solar power (daylight hours) can make the power used for computing carbon neutral and reduce grid congestion in terms of power supply and demand. It should be noted that fiber optic cables for transmitting digital information have a smaller cross-sectional area than power cables and are much easier to install.
In addition, when AI is run in cloud computing, AI learning can be done at any time in advance. In the Japanese example shown in Figure 2, learning should be enhanced in the spring and fall when there is a surplus of electricity, while learning should be moderate in the summer and winter when there is a shortage. This is equivalent to staggering the time of electricity use so that the surplus electricity can be stored as "wisdom" in cyberspace, rather than using physical storage such as hydrogen. In addition, TEPCO Power Grid has already established a subsidiary called "Agile Energy X" to promote the integration of renewable energy through distributed computing. The company has begun storing excess energy in cryptocurrency through blockchain mining.
The widespread use of high-speed, low-latency wireless technologies, such as 5G, is expected to lead to the automation of transportation and other various industries in the region. In automated driving applications, it is important that the latency between the generation of data at the device or machine and its processing and return to the device or machine is low. This requires many data centers distributed at the edge. There will also be a workload shift in computational processing between future hyperscale data centers and edge data centers. CPUs/GPUs in automated electric vehicles and mobile robots are particularly well suited for workload shifting because they are excess resources when not in motion. This workload shifting at the edge and on the demand side is beneficial for congestion management in the distribution system.
In summary, workload shifting over time and space in cloud computing can be combined with energy management in the power grid to mitigate the time and space gap between renewable energy and power consumption.
Automated electric vehicles, drones, robots, and heat demand facilities will operate on the MESH, and if MESH activities can be optimized, physical infrastructure such as roads and heat networks can be downsized. Recall that in the Second Industrial Revolution, electrification led to discontinuous productivity gains as steam engines and complex, rigid physical-mechanical power transmission systems in factories were replaced by conveyor belts driven by distributed electric motors [3].
Vehicle electrification could replace ICE vehicles with highly controllable in-wheel motor EVs, simplifying and improving road paving, and in some places the use of drones could eliminate the need for tunnels and bridges. Similarly, replacing a single boiler serving multiple heat needs with multiple distributed heat pumps and networks, each serving heat needs at different temperatures, could significantly reduce the size of the heating infrastructure while greatly improving the efficiency of energy use.
Figure 4: MESH: Machine-learning Energy System Holistic
Recent medical and life sciences have revealed a mechanism whereby the vascular and nervous systems in the human body are close to each other and use their proximity to signal each other to regulate "homeostasis" in the body [4]. Since the vascular and nervous systems in the human body play a central role equivalent to the power grid and digital infrastructure in society, respectively, this fact suggests that the combination of AI/ML and grid control in MESH can maintain homeostasis to ensure the sustainability of cyber-physical social systems.
3. DX Framework and Ongoing Programs in TEPCO Power Grid
In order to realize MESH, the business operations of power companies must first be transformed into data-driven operations. TEPCO Power Grid formulated the first version of the company's DX Framework in 2018, and has been gradually promoting the transformation to data-driven business operations.
As shown in Figure 5, the DX framework involves collecting various data from inside and outside the organization, integrating and analyzing it into solutions, and developing a system to deploy the necessary human resources from inside and outside the organization to the right places.
Figure 5: DX Framework Formulated in 2018
Following the formulation of the DX Framework, 18 programs were initiated to promote demonstration in the three areas of employees, hardware assets, and data, as shown in Figure 6. As Japan's workforce has been significantly reduced due to population decline and changing work styles, emphasis is being placed on initiatives to increase worker productivity and the sophistication of network control.
Figure 6 Ongoing DX Programs
An overview of the two programs is provided below. Figure 7 provides an overview of distribution voltage control, which also integrates transmission voltage control. In distribution systems where renewable energy is intensively introduced, voltage fluctuations in the distribution lines increase due to reverse power flow. In order to avoid voltage deviations due to voltage fluctuations, voltage control using taps is implemented at distribution substations, but depending on the interconnection volume, the control limit is reached and voltage control is no longer possible. Therefore, this project develops and demonstrates a method to optimize the voltage control of the entire system, including the transmission substations, to avoid voltage deviations in the distribution lines.
Figure 7 Coordinated voltage control by transmission and distribution systems
The massive introduction of renewable energy is also expected to create transmission capacity constraints. In the past, transmission expansion standards increased transmission capacity in line with peak generation levels. However, interconnection of renewables requires a long lead time due to transmission upgrades, and the introduction of low-capacity renewables also reduces the utilization rate of grid facilities after expansion, which has been a major challenge for both power generators and grid operators.
To this end, TEPCO Power Grid announced that it will introduce the Japanese version of Connect & Manage on a trial basis in 2019 to manage congestion by connecting generation to the power grid early in areas where congestion is expected and controlling the generation side, including low-voltage interconnection, according to congestion in the power grid, and that NEDO will provide funding for the development of the Connect & Manage system. Subsequently, the government has also announced its intention to formally introduce Connect & Manage into the regional power grid. The system is expected to be operational from April 2024 and will help alleviate congestion in several local transmission grids planned for May 2024.
Figure 8: Connect & manage renewable energy on local grids.
4. Three social collaboration platforms
The Company has decided to expand the DX framework to establish three platforms. In order to meet the needs of the regions and customers to which we supply electricity, we aim to optimally provide the resources necessary for wheeling and non-wheeling services as a platform for maximizing the value of management resources. In addition, the platform will grow as a platform for social co-creation by utilizing various data and resources from society through collaboration and cooperation with other companies. A conceptual diagram of this concept is shown in Figure 9. The company aims to realize this by around 2030.
Figure 9 Three Platforms
The core of the MESH concept is the energy platform. As the number of distributed energy resources (DERs) increases, the data and control functions of DERs will become increasingly important, and we aim to establish a DER energy platform to provide an environment that facilitates market participation by retailers and resource aggregators (RAs) while realizing DER proliferation, grid stability, and capital investment reduction. In addition, data analysis on the data platform will lead to the provision of new value in areas such as healthcare and disaster prevention.
Figure 10 Energy Platform
The geographic concept of the energy platform is shown in Figure 11. Figure 11 is also the current big picture of the Utility of the Future [5], which we advocate as Utility 3.0. The huge number of grid edge devices of different sizes will be managed by a three-level hierarchical distributed control, where the energy system becomes end-to-end (E2E) by implementing intelligence (EMS) on grid edge devices, merging with the Internet and becoming the basis of an "Internet of Functions". Utility 3.0 will serve as a homeostatic regulator of the cyber-physical social system.
At the top level of Figure 11 are Grid Edge devices that improve the UX and productivity of customers and workers, as well as homes, factories, and farms, and exchange surpluses and shortages with the community while consuming solar power and other energy on their own. For this purpose, decentralized exchanges are placed in the middle layer to implement energy management, taking into account congestion in the transmission and distribution system. In addition, energy surpluses and shortages generated in local communities will be traded in conjunction with a national exchange at the bottom.
Figure 11 Draft Implementation Plan of Utility 3.0 [7]
At the bottom of Figure 11 is a layer of nationwide energy trading. There are nine TSOs in Japan, excluding Okinawa, and currently electricity supply and demand are coordinated in each region, but by around 2030, the next-generation central dispatching system being developed by TDIOS (Transmission and Distribution IT & OT Systems LLC) with nine TSOs is expected to enable electricity trading based on nodal pricing on the nationwide bulk transmission system.
Figure 12: Next Generation Central Dispatching System Shared by Japanese 9 TSOs
In other words, Utility 3.0 will combine decentralized exchanges and a nationwide market to enable capacity-aware matching of electricity networks and the transmission of price signals with fine spatial and temporal granularity. Using decentralized hierarchical optimization, large-scale hierarchical matching can be performed and node prices can be transmitted nationwide, including to the distribution system. This is the realization of the homeostatic control of the power system [6] by spot pricing, as envisaged by Schweppe in 1978, and means that the sectoral coupling through electrification further extends the scope to the entire cyber-physical social system.
As Utility 3.0 is realized, the grid and other network infrastructures will begin to merge [5]. If our physical assets are digitized as a platform and linked to the digital twin being promoted in other infrastructure providers, a platform of infrastructure data and knowledge can be formed to enable skill-less integrated infrastructure maintenance. In the future, integrated infrastructure maintenance JVs could be created.
The asset platform could also be used to bring the vascular and nervous systems of society closer together by using assets such as substations and utility poles as a 5G base station/edge data center and antenna yard.
Figure 13: Asset Platform
The employee job matching system already under development as part of the DX program will be expanded to include a human-centric human platform that will match the most suitable talents across the Group for jobs that are diversifying in line with changes in the environment. We plan to build a development platform that develops jobs from a human-centric and talent-driven perspective. This will enable us to make the best use of the human resources of regional infrastructure providers on a local basis. In addition, synergies can be achieved with the asset platform and the energy platform, which will play an important role for local communities in Japan where the population is declining.
Figure 14 Human Platform
5. Conclusion
This paper has described the outline of our MESH concept, the outline of the DX program currently underway to shift to data-driven business operations, and the three platform concepts that are being fleshed out with the goal of implementation by around 2030. Although there is a mountain of work to be done, we will continue to work with many global stakeholders to realize the DX program and spread the industrial revolution to all regions.
I would like to thank my colleagues and many friends for their help in writing this paper, especially Professor Gopal Ramchurn of the University of Southampton, who reminded the author that Professor Schweppe called his vision "homeostatic control" 40 years ago [8].
References
[1] IEA, 'Electricity Grids and Secure Energy Transitions', November 2023
[2] Gartner, 'Gartner Unveils Top Predictions for IT Organizations and Users in 2024 and Beyond', October 17, 2023
[3] Andrew McAfee and Erik Brynjolfsson, 'Machine, Platform, Crowd: Harnessing Our Digital Future', 2017
[4] Yoshiko Takahashi, 'Regulatory mechanisms of neurovascular wiring', Vascular Medicine, Vol. 14, No. 3, Sep 2013. (In Japanese)
[5] Hiroshi Okamoto, " Utility 3.0: Japan’s Utility of the Future", ELECTRA N°311 - August 2020
[6] F. C. Schweppe, R. D. Tabors and J. L. Kirtley, "Power/energy: Homeostatic control for electric power usage: A new scheme for putting the customer in the control loop would exploit microprocessors to deliver energy more efficiently," in IEEE Spectrum, vol. 19, no. 7, pp. 44-48, July 1982
[7] Hiroshi Okamoto, “Envisioning the future driven by the 4th Industrial Revolution: Electrification, Network Convergence, Vehicle to X and Utility 3.0”, ELECTRA N°330 – October 2023
[8] S. D. Ramchurn, etal., "Agent-based homeostatic control for green energy in the smart grid," ACM Transactions on Intelligent Systems and Technology, Volume 2, Issue 4