Integrating renewable energy: Electrical impact on distribution and transmission grids. Part 2

Building on the implications of integrating variable renewable energy sources into transmission and distribution grids established in Chapter 12, this chapter examines the economic disruptions and digital transformation pathways that accompany high renewable penetration in modern electricity systems. We analyze how variable generation reshapes wholesale electricity markets, giving rise to the merit-order effect, price cannibalization, and structural curtailment, and discuss the policy and market design responses these phenomena require. The second major theme concerns the digital technologies enabling intelligent grid management: the Internet of Things (IoT) and advanced metering infrastructure, artificial intelligence (AI) and machine learning (ML) for forecasting and optimization, blockchain-based energy trading platforms, digital twins for real-time simulation and predictive maintenance, and next-generation communication networks including 5G and edge computing. We further examine demand-side flexibility (comprising demand response programs, virtual power plants, and active distribution network management) as a cost-effective complement to supply-side storage and generation. The chapter concludes by synthesizing these threads into a vision of the future smart grid: a decentralized, data-driven, and resilient network capable of coordinating millions of distributed energy resources (DERs) while maintaining security of supply and economic efficiency throughout the energy transition.