IRENA – Smart Electrification of End-Use Sectors: Benefits for Distribution

The study focuses on the benefits of smart electrification strategies for energy systems, specifically in a residential distribution grid. By harnessing flexibility from distributed energy resources like heat pumps, electric vehicles, and rooftop solar PV, grid losses can be minimized and grid investments deferred. The study estimates that smart electrification can reduce energy losses by 3% and decrease the use of grid lines by half, leading to potential savings of around USD 13.3 million. Flexibility can be harnessed across the energy system through energy storage and demand-side management, with digitalization and automation playing a key role. The study highlights the importance of tailored flexibility options based on climate and user preferences, urging countries with high electrification ambitions to adopt smart electrification approaches to optimize grid reliance and avoid unnecessary investment costs. Commercial and industrial users may be better targets for demand-side management due to their more economically-driven behavior compared to residential users.