Load Electrification Impact

Electrification as a Way to Increase Energy Efficiency and Decarbonize

As the world moves away from fossil fuels, electrification is set to play a major role in reducing carbon emissions and improving energy efficiency across various sectors. This shift is expected to lower overall energy demand (at least in already industrialized countries) while simultaneously increasing the electricity demand (one could project a roughly doubling of the latter by 2050). Direct electrification is seen as a “no-regret” approach, as the widespread adoption of energy-efficient appliances, heat pumps in buildings, and electrified transportation are key examples of how electrification can enhance energy efficiency. Also in industry, electrification is targeted to transform both low- and medium-temperature, and to some extent even high-temperature, heating processes.

Next to these changes on the demand side, on the generation side distributed energy resources are being deployed rapidly on a vast scale. This combination means that the residual demand profile as seen on the distribution grid, as well as on the transmission grid, is changing profoundly, and still needs to be covered by centralized generation units. With these changes, however, flexibility provision is introduced as well. No longer just passive users, consumers are evolving into “prosumers” who both consume and generate electricity. With assets like local solar PV generation, home batteries, electric vehicles possibly capable of vehicle-to-grid (V2G) operation, and smart devices, consumers can contribute to a more flexible and resilient energy system.

Impact on Distribution and Transmission Grids

The electrification of load will on a local level significantly impact distribution grids. Some distribution grids are already a bottleneck for further demand electrification (off-take) or roll-out of distributed generation (injection) today, see Figure 1. With a shift to electric heating and electrified transport, residual demand fluctuations can become more pronounced, with some areas potentially facing more extreme winter peaks. This shift calls for a rethinking of grid planning strategies.

 

According to ESIG’s recently issued report on “Grid Planning for Building Electrification,” traditional grid planning approaches may no longer be sufficient. A more holistic strategy is needed, taking into account not just single peak-load hours but also longer-duration stress situations driven by weather variability and technology adoption rates. Key areas for improvement include better forecasting techniques that account for climate and weather dependence, as well as coordinating grid upgrades in a way that minimizes disruption. It is crucial to mitigate large impacts by promoting energy efficiency and demand management practices.

Also in Europe, to support the ongoing transition, the European Union’s Clean energy for all Europeans package introduced provisions to improve distribution network planning, covering aspects such as planning frequency, coordination between distribution system operators and transmission system operators, and the use of digitalization and transparency. These high-level provisions, while essential, leave room for individual countries to define the details of implementation based on local needs.

Impact on Transmission-Level Infrastructure

The increased electrification of our energy system will significantly impact both the transmission grid and the electricity generation system requirements. While renewable electricity generation is rapidly expanding, many conventional power plants, such as various nuclear facilities, are approaching the end of their operational life in the coming decade(s). To meet the growing demand for electricity, overall capacity must continue to expand at a substantial rate. The profile of grid load as seen at the transmission level will also be altered. For example, the widespread adoption of electric vehicles and heat pumps could significantly change consumption patterns, influenced in part by consumer behavior. This shift in profile will also influence the profitability and utilization of transmission-level assets. In systems dominated by renewables, and thus driven by weather, care should be given to stressful situations, such as low-wind cold spells, which could be further exacerbated if a significant portion of heating demand is electrified.

Given the long lead times for developing such generation and transmission infrastructure, a long-term vision is essential. Failing to make timely decisions on infrastructure upgrades and expansions could result in higher costs and greater risks in the future. With the longevity of these assets, planning needs to be forward-thinking, ensuring that the electricity system is prepared for increasing electricity demand with changing patterns, and for the growing importance of renewable energy sources. This infrastructure (grids and low-marginal cost generation) being largely driven by capital expenditures, the transition presents itself as an investment challenge.

Electrified Load Contributing to Flexibility and Adequacy

Electrified loads, such as electric vehicles, heat pumps, and other smart appliances, can also crucially contribute to enhancing the flexibility and adequacy of the electricity system. These loads can offer valuable services across different time scales. In the long term, flexible electrified loads can support system adequacy by providing reserve capacity, while in the short term, they can be used for arbitrage—responding to price differences across time and across markets. In real time, these flexible loads can help balance supply and demand, helping to ensure grid reliability.

To foster this contribution to flexibility provision, consumers could directly respond to dynamic electricity tariffs or, for instance, limit peak off-take if incentivized by a proper distribution tariff design. Additionally, consumers can work through intermediaries or aggregators, who can offer services to distribution system operators, transmission system operators, and other market players. These aggregators can manage congestion, provide balancing capacity, and help optimize market positions through arbitrage, further enhancing the grid’s flexibility and adequacy.

This shift toward a more interactive and responsive electricity system is essential for accommodating the increasing electrification of energy demand while maintaining system stability and efficiency.

 

Erik Delarue
Professor
KU Leuven