Modernising electricity grids: from smart grids to blockchain - and The Faraday Grid

Modernising electricity grids: from smart grids to blockchain - and The Faraday Grid

What is an electricity grid?

Electricity grids are interconnected physical network systems that carry electricity. Today’s electricity grids generally consist of several components: different types of transformers changing the voltage of electricity to be appropriate for the specific lines that carry it, transmission lines that carry electricity over long distances, and distribution lines that carry electricity to consumers.


challenges with the current grid

Transformers that provide the core of electricity grids were invented by William Stanley in 1885. This fundamental technology ensured the supply of electricity sufficiently at the time. Nonetheless, the past century witnessed a rapid evolution of the use of electricity, including the introduction of renewable energy generators into the system; whereas the technology underlying electricity grids did not adapt to these changes. In other words, user requirements changed, but the system that supplies them remained the same.

Consequently, electricity grids, as they are today, are not sustainable. This is mainly because grids were designed when energy was supplied by a few central fossil fuel generators. Renewable energy sources are distributed and mostly provide variable energy which has different characteristics. Therefore, their integration into the same grid is constrained. Electricity markets are becoming increasingly complex to keep up with more decentralised generation in a centralised system. A certain proportion of variable energy makes the current grids physically unstable, which threatens the security of energy supply. Moreover, because today’s grids cannot deal with this type of energy efficiently, integration of more renewable energy into the existing system is expensive.  

A modern grid supplying modern electricity demands should therefore be able to provide environmentally friendly energy securely and at an affordable price at once. There are a number of technology pathways being suggested to modernise the electricity grid, and adapt it to the new reality of distributed variable renewable generation. This article gives an overview of these technologies.

1. Extending the existing grid

Security ✘   Environment ✔  Affordability ✘   

This approach considers the addition of assets to the grid infrastructure to deal with the symptoms the grid is experiencing. These assets can be storage and harmonic filters to deal with variability of renewable energy supply; interconnectors to manage differences in supply and demand; shunt reactors to increase efficiency, and more.

  • The quantity (and therefore cost) of assets required is nonlinear and increases until a renewables penetration level that is unsustainable using current technology is reached.
  •  Increased assets introduce operational complexity and more points of failure
  • The system is dynamic by nature and has many stakeholders and agents acting within it making it almost impossible to manage effectively
  • This solution decreases system efficiency and increases the cost of energy.

2, Microgrids

Security ✘   Environment ✔  Affordability ✘    

This solution would entail breaking down the existing grids into similar but smaller-scale systems that usually consist of generation, distribution, consumption and storage. Smaller systems can be more effectively tailored for local requirements. The electricity grid could this way be revised into series of interconnected microgrids.

  • The structure of a microgrid makes scalability and rollout inherently difficult
  • Microgrids generally rely on an external grid to provide services (supply and receive)
  • Microgrids do not provide the optimum system-wide solution for capital expenditure or operational efficiency outside the scope of an individual grid


3. Smart Grid

Security ✔   Environment ✔  Affordability ✘

A smart grid monitors itself and makes decisions regarding operation to balance supply and demand. Existing grids have a level of ‘smartness’ already, in the form of smart devices, such as smart meters. Increasing the available data will increase to the ability to manage the system for improved operations.

  • An infrastructure to monitor and control requires communications and introduces a cyber-security threat. This threat would affect both privacy of data, and more importantly, influence over system operations.
  • The system remains centrally controlled, maintaining existing constraints on agents ability to act within the system
  • Does not resolve electrical and physics issues of grid (extension of existing grid would still be required)


4. IoT (Internet of Things) 

Security ✘   Environment ✘  Affordability ✔  

IoT application to the electricity grid is centred around monitoring and analysing data, to allow real time automated decisions to be made relating to device operation. This can form a decentralised system.

  • Communication between devices requires some form of data connection which introduces a cyber-security threat. This threat would affect both privacy of data, and more importantly influence over system operations
  • Does not resolve electrical and physics issues of grid (extension of existing grid would still be required)

5. Blockchain

Security ✘  Environment ✘  Affordability ✔

Blockchain is a technology for peer-to-peer transaction platforms that uses decentralised storage to record all transaction data. It chronologically records and links every transaction made across the network, allowing trustless transactions to occur. This reduces services and intermediaries required, and improves speed.

  • The intense data processing required by blockchain uses an extraordinary amount of electricity (a single Bitcoin transaction now consumes enough energy to power a home for over a week, and Bitcoin verification makes up 0.11% of total global energy consumption)
  • Blockchain does not address electrical or physics principles within the grid, and has no impact on the security or environmental aspects of the energy trilemma
  • Does not resolve electrical and physics issues of grid (extension of existing grid would still be required)

6. The Faraday Grid

While the above solutions address individual shortcomings of the current grid, the Faraday Grid provides a systemic solution for the grid to fulfill all three of its modern duties; namely: providing energy affordably, securely, and supporting integration of renewable energy.

A Faraday Grid is a network of Faraday Exchangers that fit seamlessly into the existing system - therefore, would not require any radical change to the existing infrastructure, and can be integrated for the price of maintenance costs. It does not require any communications networks, therefore is safe against cybersecurity threats.

Security ✔

The Faraday Grid addresses short term volatility and reliability of renewable energy, which allows for increased integration of energy from these sources without risking the security of the energy supply.

Environment ✔

Considering the increased proportion of renewable energy allowed into the system by the Faraday Grid technology, rolling out Faraday Exchangers across Britain would have a planet changing impact by reducing annual carbon emissions by 54 million tonnes – equivalent to the emissions of nearly 9 million people.

Affordability ✔

At the same time the Faraday Grid would save more than one billion pounds by making the network more efficient – a saving of more than 30 pounds off the average British household electricity bill.