Three dynamics are shaping the growth of renewable energy

Three significant dynamics are changing the renewable-energy market and the integration of that power into the existing grids, said DNV GL Wholesale Advisory Service, Head of Section Olof Bystrom. He elaborated on the dynamics at the recent AWEA Windpower 2015 Conference along with a survey conducted by his firm. The dynamics, actually developing trends and ideas, were distilled from a global survey of about 1,600 participants in 71 countries affiliated with the power industry. “We see these changes or dynamics in the power industry as it works to integrate and accommodate more renewable energy,” said Bystrom.

Change is comingOne survey question revealed a surprising consensus: Is it realistic to expect 70% or more renewable energy before 2050? “Surprisingly, 80% of the respondents said ‘yes.’ That was quite an unexpected and positive response,” he said. That led to identifying the different dynamics that would produce such a shift.

The first dynamic, Beyond old metrics, looks at how the industry moves beyond the current regulatory framework to one that creates a convergence that works for developers and grid-system operators.

The cost of energy is an example of where a new metric is needed. The most common metric of affordability – the levelized cost of electricity – is often used by state regulatory commissions. It counts only the total cost relative to the total energy delivered but not when the energy is delivered or how predictable the energy delivery is. If time of delivery and firmness of delivery were part of the metrics, we could expect to see new ideas developing on how wind and solar can support reliability.

The second dynamic, Beyond old rules, recognizes the need to look at new paradigms for collaborating between regulators, systems operators, and developers. “This would be to develop systems or rules and regulations that can accommodate 70% renewable energy. Even though renewables at that level are widely viewed as feasible, system operators see that level mostly as a challenge.” Change is coming part 2

The challenge lies in ensuring that the lights stay on despite a higher reliance on variable energy sources. This can also lead to higher costs because power systems must maintain more reserves to support the grid when renewable generation levels fluctuate.

Renewable energy today is often sold as-available at the spot price and systems operators simply have to accept schedules and plan around them despite the uncertain output from renewable sources. New rules or financial premiums for firmer energy-supply schedules that makes delivery of renewable energy to the grid more predictable could contribute to easing the challenge for systems operations.

The third dynamic, Beyond old silos, deals with expansion. It calls for new entrepreneurial models to expand the electric business into what DNV GL calls the Internet of Energy. “As we move to new technologies such as distributed generation, energy storage, and increasing market participation from demand response provided by small smart devices, such as thermostats and HVAC controls, we need better software and communications protocols for controlling and aggregating these assets so they become part of the energy supply in a manner similar to conventional generation,” says Bystrom.

The concept of a distribution system’s operator is one emerging example of how the grid is changing in that distribution utilities will increasingly find themselves becoming mini-ISOs tasked with accommodating generation from distributed solar and other smaller scale resources.

And lest you think the transitions described are decades in the future, Bystrom says they are already happening. “Texas is definitely one of the key players in renewable energy and has built a reliable transmission system to support the development. The combination of renewable energy there, in its tremendous wind and solar resources, is so great that ERCOT, the Electric Reliability Council of Texas, has developed Competitive Renewable Energy Zones that have vastly improved the ability to get renewable energy from wind-rich areas to where it is needed,” he says.

The western U.S. will be the next frontier with California as a bellwether state. “California Governor Brown has stated goals of 50% renewables in the mix by 2030. Should that goal lead to legislative requirements, they will probably be forthcoming. We see the dynamics in other markets too, such as the Midwest,” he says. Good resources are available throughout the area from Oklahoma to Kansas and up the middle of the country as well.

Bystrom also suggested that the three dynamics will play out differently in different regions, shaped by local electricity systems, renewable resources, business models, and political cultures. In short, the industry must move beyond the quaint idea of simple accommodation to a new model that combines more predictable production with efficient distribution and more sophisticated operations.

Speak Your Mind