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The commune of Carros in the south of France straddles a leafy valley tucked away a short ride from Nice and the beaches of the French Riviera. Like much of Provence, the medieval town of 11,000 swells every summer with tourists seeking tans and sipping rosé. But it may soon become a magnet for people interested in the sun for a different reason.

The town holds the world’s first smart solar grid, a system that could one day allow cities to generate more renewable energy closer to customers. “This is a prototype for an end-to-end system from the consumer to storage to the distribution grid, back to transmission,” says Laurent Schmitt, smart grid strategy leader at GE Grid Solutions.

Carros on road map

Above: Carros sits on the far edge of France’s transmission grid. That made it the perfect place for GE’s and ERDF’s digital grid project. Top image: Port of Nice

The GE business and French distribution grid operator ERDF, which spent the last four years building the grid, picked Carros because of its remote location on France’s transmission grid. Despite its proximity to Nice, Carros relies on a single electricity supply line. This drives up the risk of outages, especially in busy July and August, when demand shoots up. A local business park is another factor that taxes the line.

Ironically, solar panels would seem like the obvious solution to add more power. But in the past they just caused more problems, and often had to be shut down because they generated more electricity than the grid could carry. “This really created a complex problem that ERDF wanted to solve,” Schmitt says. “If we get it right here, we’ll have solid proof that we can do it elsewhere.” He believes the smart grid market will be worth 50 billion euros by 2020.

The team began by modernizing the existing grid with software and automatic switches, placed solar panels on more than 500 buildings and installed a centralized 1-megawatt battery to store and release excess electricity. The result is a smart grid that can be more flexible and efficient in sending power to the grid.

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GE estimates a smart grid like the one in Carros could cut generation costs by 20 percent by reducing the need for building up excess power generation capacity.

One piece of GE software, called distributed energy resource management system, allows operators to mesh consumption information from smart meters with load forecasts, status updates from the grid and weather reports.

The software, for example, allowed the operators to offer a subsidy via text message to a local coffee roaster if the company fired its ovens when neighbors’ solar panels were generating excess electricity. “We load up, and the coffee roaster roasts their coffee at a cheaper price because they get a subsidy from the grid operator to consume during this period,” Schmitt says. Grid operators used the same incentive to make residents turn on water heaters during solar peaks.

When local business cannot soak up all the extra electricity, that’s where the battery and more GE software come in. Engineers coupled the battery with charge management technology that charges or drains batteries based on electric demand on the grid.

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Solar panels in Carros can send power to the grid or charge batteries. Image credit: GE

At the town’s business park, 15 customers with installed solar power also became an “islanding” zone — generating and storing enough power to be disconnected from the grid at certain times. Schmitt says islanding will be especially useful in emerging economies where grids are unreliable.

Although the market for battery energy storage is still minuscule today, it could reach 10 gigawatts of installed capacity by 2020, GE says. Storing power from renewables such as solar and wind and feeding it into the grid will drive most of the demand.

GE estimates a smart grid like the one in Carros could cut power generation costs by 20 percent by reducing the need for building up excess power generation capacity. It will also cut the district’s carbon footprint.

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A worker standing inside a battery storage. Image credit: GE

The project is just one of many globally where GE is testing innovative ways to improve grids. Worldwide, electricity demand is expected to rise by up to 70 percent by 2030, according to the International Energy Agency, creating a $12 trillion market. Rising demand in India, China, Africa, the Middle East and Southeast Asia will drive much of the growth. In those markets, coal will still play an important role, but renewables are expected to represent one-quarter of the energy mix by 2050.

That puts the electricity industry on the verge of a global digital revolution that is leading to a whole new idea in power generation: distributed energy. With renewables in the mix, it starts to make sense to have smaller, cleaner plants serving smaller communities. Just like in Carros, the idea is to generate some electricity locally to reduce stress on the grid, cut energy costs and increase flexibility.