As renewables become a large share of the global energy mix, greater electricity system flexibility will be critical and will originate from the small scale, write Daniel Quiggin and Antony Froggatt. The International Energy Agency forecasts that ‘solar PV and onshore wind together represent 75 per cent of global renewable electricity capacity growth over the medium-term’. Bloomberg New Energy Finance also estimates that by 2040, nearly three-quarters of the $10.2 trillion invested in new power-generating capacity will be in renewables. While this renewables rollout is a key part of global climate policy, the challenge is that the costs associated with managing the system start to escalate once renewables exceed a 30 per cent share of generated electricity. Unless properly planned for, the growth in electric vehicle use and electric heating could further amplify these ‘system integration costs’. They include the cost of holding fossil fuel power plants in reserve for periods of low renewable supply, grid upgrades and the dumping of power from renewables when system constraints are reached. So, as renewable energy pushes beyond 30 per cent, and as a growing number of cars and domestic-heating systems begin to add to power usage, how can governments ensure electricity is affordable? The answer is ‘flexibility’. A raft of technologies already entering the market, promise to radically enhance the flexibility of electricity systems, helping contain system integration costs while accelerating the low-carbon transition.
Chatham House 22nd Aug 2018 read more »
By 2040 Bloomberg New Energy Finance predicts that more than half of global energy capacity will come from renewables and flexible sources, such as battery storage and demand side response. At 7% of global capacity, flexible sources such as batteries and demand side response – where homes and businesses automatically cut energy usage a peak times – will account for the same level of global energy capacity as oil-fired power plants today. And more than half of this energy storage capacity will come from small-scale batteries installed by households and businesses alongside rooftop solar panels. This trend away from larger power plants and towards smaller, decentralised energy systems is happening in both developed and developing nations. The decarbonisation trend is being accelerated by the falling price of renewable energy technology, and the availability of technology such as batteries that makes it easier to store electricity. This in turn accelerates decentralisation, as renewables are by their nature smaller and more spread out than the equivalent capacity provided by a traditional power plant. The rate of decarbonisation and decentralisation is being accelerated by digital technology, giving people the power to save, or even make, money by being more flexible with their energy use, while helping electricity grid operators to balance supply and demand. Europe’s largest demand side response aggregator, REstore, was acquired by Centrica in 2017. Centrica CEO Iain Conn says he expects demand side response to become one of the fastest growing elements of the energy market over the next few years. From smart home products such as Hive that allow home owners to control their energy use from their smartphone, through to companies like REstore employing artificial intelligence to calculate just how much energy capacity a factory can offer as a virtual power plant. Energy, like every other sector, is going digital. Greater insight through digital technology is just the start of the shift of power away from energy companies and towards the customer. Centrica is currently piloting a project in the south west of England that will allow local residents and businesses to buy and sell energy between themselves without the intervention of their energy supplier. The £19 million Local Energy Market in Cornwall is enabling 200 homes and businesses to do this using a digital record known as Blockchain. It is used to create a secure electronic ledger of transactions between participants. Iain Conn says he believes such local networks will become the norm in a new decentralised energy market.
Centrica (accessed) 24th Aug 2018 read more »