Electrification of end-use sectors through variable renewable energy is an emerging solution. Increasing the deployment of distributed energy resources turns the consumer into an active member
The power sector is propelled by three trends of electrification, decentralisation and digitalisation to enhance system flexibility and ensure a higher penetration of variable renewable energy (VRE), technologies whose primary energy source varies over time and cannot be easily stored. These factors transform the functions / duties of participants and have opened doors to new players. They maintain value, prevent the curtailment of VRE and help decarbonise other sectors.
Electrification of end-use sectors through VRE is an emerging solution. Increasing the deployment of distributed energy resources (DER) turns the consumer into an active member, promoting demand-side management.
Finally, digital technologies enable faster response, better management of assets, connecting devices, collecting data, monitoring and control. A four-dimensional systemic approach — including system operation, enabling technologies, business models and market design — along with the three key trends for energy transition, however, was required to foster this innovative model.
Electrification
Electrification is among the many challenges of decarbonisation. Continuous reduction in the cost of renewables, however, allows the generation of cleaner electricity. Electrification of transport and industry sectors can potentially shift paradigms towards decarbonising economies. Electric vehicles (EV), for instance, will have a transformational impact on not just the transport industry, but also on the power market.
The innovation opportunity of technologies like that of smart charging EVs brought flexibility in the integration of renewables through new loads to support the adoption of EVs.
Additionally, the implementation of energy efficiency techniques proved to be a major decarbonisation strategy in reducing the consumption of electricity through innovations in various technologies.
“We reduced carbon dioxide (CO2) emissions by 20 per cent to five gigatonnes from six gigatonnes by applying energy efficiency and renewable energy penetration in the United States,” said Mark McGranaghan, vice president of innovation at the Electric Power Research Institute.
He made the remarks at a joint webinar titled Innovation landscape for a renewable-powered future and organised by the International Renewable Energy Agency, Enlit Europe and Initiate August 26, 2020.
“We are also looking forward to continuing in this path to electrify end-use sectors, reducing another gigatonne by 2030,” McGranaghan added.
Decentralisation
The development of decentralised renewable energy systems is crucial for the decarbonisation of energy generation worldwide. This creates an opportunity for energy communities by allowing the penetration of renewable energy (RE) by engaging local energy consumers and producers.
With increasing electricity prices, a point will be reached shortly where private homeowners can directly consume self-produced solar electricity instead of feeding it into the grid as it becomes more profitable.
It enhances prospects for community charging stations, car-sharing and carpooling. The engagement and awareness of energy communities can increase the potential for energy users to pay more for RE, knowing it will improve financing and management of communities.
The total installed distributed solar capacity around the world at present accounted for 220 gigawatts (GW) and was expected to increase to 3,400 GW by 2050.
Peer-to-peer (P2P) electricity trading, on the other hand, can make RE more accessible, allowing consumers to make better use of their DERs. P2P is a business model based on an interconnected platform that serves as an online marketplace where consumers and producers ‘meet’ to trade electricity directly, without the need for an intermediary.
A P2P trading model can be established among neighbours within a local community, as well as on a larger scale. P2P trading programmes offer forums for prosumers (producers and consumers of electricity) to trade RE generated at a better cost, promoting the deployment of distributed generation.
P2P trading platforms help in the management of decentralised generators by balancing local electricity demand and supply and decreasing congestion in the network.
It can aid in reducing investments for generation capacity and transmission infrastructure to meet demand. The Sustainable Energy Development Authority in Malaysia, for instance, is piloting a P2P electricity trading project where prosumers trade their electricity with consumers or sell excess electricity to the Tenaga Nasional Berhad utility.
“In Thailand — by partnering with the Thai energy company BCPG Public Co Ltd — we established a 700-kilowatt rooftop solar P2P trading in October 2018,” said Jemma Green, co-founder and executive chairman, Power Ledger Pty Ltd, in the webinar.
“It is the largest commercial P2P trading in the world,” Green added.
Digitalisation
In the coming years, digital technologies are focused on making energy systems around the globe more connected, smart, efficient, reliable, and sustainable. Digitalisation in the energy sector has increased at a faster pace and helped in integrating renewables by enabling grids to meet energy demands when the sun shines and the wind blows and according to resources available.
The three main digital technologies to enable the business models include the Internet-of-Things (IoT), artificial intelligence (AI) and blockchain.
IoT is employed to collect data from decentralised energy resources and loads used for smart and quick decision-making by artificial intelligence. Blockchain technologies allow for quick, accurate and secure transactions through smart contracts from decisions made by AI.
Investments in digital technologies by energy companies rose sharply over the last few years. “Residential, commercial and industrial sectors account for over 40 billion for IoT platforms,” said Maher Chebbo, co-chair of the European Technology and Innovation Platform for Smart Networks for Energy Transition Digital Energy, created by the European Commission.
Digitisation and the implementation of smart-charging technologies for EVs can optimise charging times when electricity demand is low and supply is plentiful.
Digitalisation can promote the growth of DERs, including household solar panels and storage, by generating better incentives and making it easier for producers to store and sell excess electricity to the grid.
Blockchains can facilitate P2P electricity trade within local energy communities. Digitally enabled demand response and increased storage of solar photovoltaics and wind power can potentially reduce curtailment to 1.6 per cent in 2040 from seven per cent, achieving a reduction of 30 million tonnes of CO2 emissions, said estimates.
At higher percentages of VRE, flexibility becomes a more valuable quality in power systems. As VRE shares increase, policies need to adapt to changing system circumstances. In an age of low-priced VREs, the success of integration approaches is essential for high shares of VRE to transpose into low-cost electricity for consumers.
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