Smart grids. Will they provide better energy efficiency?


With increasing demand and rising electricity prices, it will become crucial in the coming years to ensure better efficiency in power grids. How should this be done?

Author: Mateusz Kucharczyk /

Content of this article does not reflect the positions or opinions of the EU-SysFlex project or its partners. EU-SysFlex is not responsible for the information or opinions included in this article.


Energy efficiency has already been a key issue of the EU’s Europe 2020 Strategy for smart, sustainable and inclusive growth.

According to the EC’s estimates, the development of smart grids in Europe was to help reduce CO₂ emissions by 9 percent and annual household energy consumption by 10 percent. Smart technologies – as expected – were to help ensure the safe functioning of national electricity systems and be an important element in the development of a common energy market and the integration of RES infrastructure in Europe.

The Commission announces actions for the standardization of smart grids, the integration of policies on the protection of privacy of communications and personal data, and the monitoring of the timetable for the introduction of the smart grid program in EU countries.

Is the Polish power system ready for changes?

In Poland, it has been stressed for years that distribution companies should invest more in the development and modernization of the grid, as its condition and needs related to the transformation of the energy sector – especially renewable energy sources – require it.

„We are lagging behind particularly in distribution networks. In 2021, a change in the way prosumers are billed was pushed through, which from April will stunt the industry’s growth to date. One of the arguments raised by distribution system operators (DSOs) was that the large share of micro-installations negatively affects network operation. Besides, investors of larger installations are more and more often refused connection conditions. This means that one of the main barriers to the development of RES in Poland has become the grid infrastructure,” Tobiasz Adamczewski, RES Programme Director at Energy Forum (FE), emphasises in an interview with

Indeed, distribution companies could potentially invest more to contribute to the transformation of the power grid in Poland, as distribution is one of the segments generating the best financial results for energy groups.

However, the generated profits are not used for modernization, but rather to compensate for the losses caused by the growing burden of increasing CO2 emission costs for the energy mix based on coal in about 70 percent.

And there is much to modernize. According to the latest data from the Polish Society for Transmission and Distribution of Electricity (PTPiREE) cited by, at the end of 2017, in the case of overhead lines, 42 percent of high voltage networks, 37 percent of medium voltage networks and 31 percent of low voltage networks were more than 40 years old. In contrast, 34 percent, 39 percent, and 35 percent, respectively, were in the 25-40 year range.

Therefore, it is necessary not only to expand the infrastructure, but also to restore it. This, in turn, is to take place mainly through cabling of the network, i.e. placing it underground where it will be less exposed to failures, if only due to increasingly violent weather phenomena.

In 2019. PTPiREE estimated the cost of increasing the share of cabled medium voltage lines from 27 percent to 75 percent at approximately PLN 48 billion. With the planned outlays of distribution companies, the achievement of this goal was expected in… 2070 r.

What to look for when modernizing the power grid?

But technical issues are not the only challenge facing power grids. Experts point out the changes taking place in the market.

New entities such as industrial plants, commercial property owners or homeowners are entering the energy production market. This means that for the first time on such a scale, the market share of these producers allows for real competition with traditional manufacturers.

This challenges the previous linear methods of delivering energy from power plants to end users. The democratization of energy resources will have a significant impact on the entire energy market. In doing so, it represents an opportunity to reduce fossil fuel consumption, improve the efficiency of energy distribution and stabilize the grid, bringing the market closer to achieving the EU’s 2050 carbon neutrality target.

A report on technical solutions at the low voltage grid level was prepared by the Energy Forum. In „Microinstallations on the curve. How to ensure the future of distributed energy in Poland?”, the authors emphasized, among others, the need to invest in smart meters, replacement of cables with larger cross-sections, energy storage and automation on transformers.

FE quotes data according to which in recent years more than 600,000 households and businesses have invested in their own solar installations, about 35,000 jobs were created in companies offering services in this segment.

However, the changes have not been followed by legislation, which needs to be adjusted to the new reality. On the one hand, distributed energy supports the transformation of the Polish energy sector towards climate neutrality, strengthens the security of energy supply in summer and helps to fight smog when electrification of heating occurs.

Additionally, it involves the society in the transformation of energetics, and it is an effective way to avoid sudden price increases of electricity or heating, especially when a household uses a heat pump.

On the other hand, the development of distributed energy will require regulatory changes. First of all, we need declarations concerning the development of photovoltaic energy, including prosumer energy. Distribution grid operators must prepare for further development of micro-installations, and prosumers should participate in the costs of grid development – which is not happening at the moment. DSOs need to prepare investment plans for the development of not only photovoltaics, but also electric cars.

In its analysis, the Energy Forum also points to solutions that would help networks manage more energy from distributed sources: these include investments in local energy storage, cables with a larger cross-section and automation of transformer stations, and implementation of smart solutions.

„It will also be important to encourage users to change the way they use energy, e.g. through price incentives – so that the consumer reduces consumption when there is less energy in the system (so-called dynamic pricing),” Tobiasz Adamczewski points out in an interview with

„Basically, the grids need to invest in readiness to accept more and more RES installations – from the smallest ones on rooftops to the largest ones, such as several hundred megawatts of photovoltaic or wind power plants. But on the other hand, the system must be able to deliver power on windless or cloudy days. Therefore, investments in dispatchable sources and flexibility services will be necessary,” adds our interviewee.

What are the technologies and solutions of the future?

The development of a more flexible and resilient electric grid is a phenomenon that should gain momentum in the years ahead. In order for the grid to become more efficient, it will need to be able to withstand fluctuating renewable energy generation and sharp spikes in demand and supply.

According to Schneider Electric estimates, the global microgrid market will grow at a compound annual growth rate (CAGR) of 12.6 percent from 2021 to 2027. In the coming years, microgrids will play a key role in increasing renewable energy supply and stabilizing the grid due to their ability to function independently and support local demand while reducing pressure on the core energy supply system.

For the energy transition to proceed smoothly, investment in bi-directional energy transmission on the grid of the future is required. It primarily requires network data management based on secure digital technologies and advanced solutions for severe event mitigation, network flexibility and active management, and advanced operational efficiency.

„Certainly, investments in new gas units will have to be made with a high degree of caution, and solutions related to energy storage and voluntary and temporary reduction of electricity consumption (DSR) by customers will be necessary,” Tobiasz Adamczewski points out.

„The planned expansion of pumped storage capacity is a good move. And the last power market auction delivered about 1.5 GW in DSR, or power demand reduction services. In the coming years, even more investments in clean sources will have to be encouraged, as we expect that from the middle of the decade the outdated coal-fired power industry will cease to be competitive and the so-called ‘coal gap’ will have to be filled”, adds our interviewee.

The expert emphasizes that while the option to import electricity is an important element of system balancing, the coal gap should be filled as soon as possible with our own sources in order to maintain a high level of domestic production.

A giant leap into the 21st century

Experts point out that smart grid investments allow increasing the reliability of power system operation. This is achieved through the installation of advanced power generation equipment and telecommunications technologies to improve network operation control and energy management.

They enable the connection of micro-generators (at low voltage level) and energy storage tanks to the grid, and allow for the management of household appliances located „behind the meter” in individual households.

Technologies implemented as elements of a smart grid facilitate control of grid operations, reduce failure duration, automate grid operations, enable easier regulation of voltage values, simplify reactive power compensation, and provide tools needed to manage energy demand in emergency situations or when there is a threat of a power deficit in the system.

In addition – thanks to the use of many sensors, meters and counters – they inform about the current state of the network, and appropriate algorithms help to predict how the abnormal situations may develop, which allows to plan in advance certain operator actions.

Due to the availability of a lot of data, it is possible to obtain information about the load level of individual system elements and about possible effects and changes if a transformer or a line is switched off or damaged. Moreover, it is possible to obtain information on the status and condition of individual network devices and predict their failures, which allows to estimate the time of failure-free operation and to set the date for maintenance.

Thanks to smart grids, it will be possible to differentiate electricity prices at different times of the day, i.e. to communicate supply-side price volatility to end users, e.g. in order to motivate them to reduce energy demand in situations of power deficit in the national power system.

Smart grids will allow for automation of many processes in grid companies, e.g. they will facilitate actions to be taken in case of failure, voltage regulation in grids or reduction of reactive power flows.

Currently, Polish distribution system operators focus on investments related to modernization and development of the grid infrastructure, e.g. its automation, as well as digitalization and digitalization which are the essence of smart grids, including implementation of advanced IT systems and smart energy meters.

This includes the implementation of advanced IT systems and smart meters. Among the actions taken, one can mention the replacement of energy meters with models equipped with remote reading modules. Some of the electricity grid operators in Poland, especially in certain locations, choose bi-directional meters which measure energy from micro-installations fed into the grid.

There are also investments related to the introduction of IT systems supporting the operation of energy companies – billing of end users, customer information management systems (CIS), as well as improving the management and inventory of energy infrastructure.

Baltic: the largest power plant needs to be connected to the rest of the country

Tobiasz Adamczewski adds that the system of the future is one that uses all technological possibilities to ensure supply of clean energy at prices reflecting its cost. This means that when there is an oversupply of energy – it should be cheaper, and when there is a shortage – more expensive. The market should send the right price signals to energy consumers and generators.

„It will be necessary to electrify road transport and heating (electric cars and heat pumps), using electricity from clean sources. In addition to the dynamic development of renewable energy sources, in particular onshore and offshore wind and photovoltaics, the development of so-called green gases will be necessary,” he adds.

Due to the falling costs of RES and the targets adopted in 2018 to increase the share to 32 percent in 2030 in the European Union, cost-effective and technically reliable integration of RES becomes an urgent need and a strategic challenge.

All the more so, as the development of nuclear energy in Poland is also expected in the coming years. The first wind farms in the Polish Baltic area are expected to start producing energy in 2026. However, the onshore transmission grid has to be adapted before it can be used. In a few years the Baltic Sea will become Poland’s largest power plant thanks to offshore wind farms.


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