Australian news, and some related international items

Flexibility of Renewable Energy Systems is Shifting the Power Balance

 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

 NuClear News Sept 18   Tom Greatrex of the Nuclear Industry Association (1) says we should ignore the National Infrastructure Commission’s (NIC’s) recommendation that we only order one more nuclear station on top of Hinkley Point C before 2025 (2), because cutting carbon without the help of nuclear is a “risky business”. He says the Government understands the inherent value of a baseload low carbon source of generation.

The NIC says: “It is now possible to conceive of a low-cost electricity system that is principally powered by renewable energy sources.” It says at least 50% and up to 65% of electricity in 2030 should come from renewables. (3)

Australia is having similar debates where the fossil fuel lobby argues that because “coal” is “baseload”, it must therefore be “reliable”, but wind and solar are intermittent, so they cannot be relied upon to keep the lights on. It’s political rhetoric that belies the reality of the electricity system. Australia’s grid has challenges, but they are not necessarily ones that can be solved just by having more “baseload”. What is really needed – as the Australian Energy Market Operator, chief scientist Alan Finkel, and any number of other independent experts point out – is dispatchable and reliable generation, one that the grid operator can count on, at times of peak demand and heat stress. And the answer does not lie in traditional “baseload” generation – the more than 100 trips of big fossil fuel plants since December, often at times of soaring heat, underline that point.

The energy debate is usually dominated by simple political rhetoric – based around emissions or no emissions, cheap prices or expensive ones, baseload versus intermittency. That just skims over the surface. Behind the scenes, as the clean energy transition continues, debates are raging about good engineering practices and the design of markets. One of Australia’s leading electrical engineers, Kate Summers says large diverse renewable resources are far more stable in output than singular sources. She uses a series of graphs to illustrate that at moments when stability can be won or lost it has been wind and solar that have held firm, and acted as what one might consider to be “baseload”. And it has been coal and gas that has proved “intermittent” at the very minutes that stability is needed. (4)

It’s the Flexibility Stupid

A new report from Chatham House says evidence is growing that highly flexible electricity systems could deliver lower whole-system costs, especially given the dramatic projected falls in solar and wind power costs by 2030.

While the 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% 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. Governments can ensure electricity is affordable by promoting ‘flexibility’. Grid operators and power companies should pursue a diverse range of flexible, decentralized, modular technologies.

New technologies that enhance system flexibility, including smart electric vehicle (EV) charging, battery storage, digitalization with intelligent control and demand-side management, are unleashing a new phase of transformations in the power sector, for which existing companies are ill prepared. Companies providing these solutions may come to dominate the power sector in the coming decades. The accelerating deployment of this array of ‘flexibility enablers’ means the spectre of cost escalation – resulting from the expense of managing intermittent wind and solar power at huge volumes – may never materialize.

Smart, staggered EV charging could enable significant advances in system flexibility. By 2030, smart EV charging in the UK could be equivalent to 18% of the country’s current generating capacity. Rapid cost reductions in battery manufacturing, driven by increased deployment of EVs, are enabling affordable static, grid-level storage, in turn enhancing power system flexibility.

Digitalization of the electricity sector will lead to significant advances in system efficiency and flexibility. Residential demand will become flexible and networks functionally ‘smarter’. Machine-learning algorithms could be a game-changer, helping to manage the increasing complexity of electricity systems and identify new system-level efficiencies.

Enhanced system flexibility and a growing role for these technologies will provide new entry points for highly disruptive market actors, many of them not traditionally associated with the power sector. These actors include powerful technology companies and automotive manufacturers such as Google, Tesla and BMW. More widespread electrification of transport, and eventually of heating, will change the political and regulatory landscape of the electricity sector.

The transformations which have happened so far, with the rapid introduction of renewable technologies and falling demand due to greater energy efficiency, have undermined the business models of traditional power utilities. Now they face the prospect that renewables will achieve ever higher penetrations within the electricity market, aided by greater system flexibility. This will continue to erode the role of large power stations in ‘system balancing’ – balancing supply and demand – and will put further pressure on existing business models.

Evidence is growing that highly flexible electricity systems could deliver lower whole-system costs, especially given the dramatic projected falls in solar and wind power costs by 2030. But new regulatory approaches are needed to encourage market actors to deliver flexibility. Regulatory frameworks need to prioritize and incentivize investment in these areas, and encourage alternative business models. And in this future, our reliance on large fossil fuel power plants would fade, along with the utility business models that have long been based on a centralized power system.

New business models are emerging to aggregate and manage behind-the-meter investments. One example: storage-as-a-service. The innovative US utility, Green Mountain Power (GMP), in Vermont offers customers a Tesla Powerwall 2.0 battery for $15 a month so long as the customer allows GMP to manage when and how the battery is charged and discharged. Alternatively, customers can buy one for $1,500 – which is roughly a fifth of the actual cost of the battery. In either case, substantial subsidies, approved by the Vermont’s Public Utilities Commission, are offered. The regulator has been convinced that the scheme will more than pay for itself in the sense that all customers, not just those participating, will benefit from the program. The distributed storage paid off handsomely during a heat wave in early July 2018. The company was able to discharge stored energy out of about 500 Tesla Powerwall batteries installed in the homes of some 400 customers and feed it into the grid when it was sorely needed. It saved roughly half a million dollars by avoiding the need to buy expensive power from suppliers at the time of peak demand. GMP, which serves roughly a quarter-million customers in VT uses the batteries in customers’ premises as a virtual power plant (VPP). Customers like the batteries because they typically replace an emergency generator when power fails – which is not uncommon during storms in rural areas. (6)

 UK Power Networks

The UK’s largest electricity distributor has proposed adopting a “flexibility first” approach to the delivery of extra grid capacity, in a move that could bring renewable energy onto the network at a lower cost. UK Power Networks has revealed plans to “supercharge” local markets for flexibility services, which rely on customers changing their energy consumption or generation to balance network demand, possibly by creating them itself.

The company claims that if flexibility services were made available to the 8.2 million buildings it serves, new markets for distributed renewable generation would open across London, the South East and the East of England. It speculates that such increased competition would result in a higher proportion of renewable power being bought onto the network, but at a lower cost. The Flexibility Roadmap proposes a radical rethink to the way we do business, moving away from automatically building new assets and instead giving the distributed energy resources market the opportunity to offer their services. If the market can provide the capacity we need at a more cost-effective rate than building new infrastructure, that’s exactly what we should do.

Specifically, UK Power Networks believes that the actions outlined in the roadmap will lower costs for consumers by delaying or avoiding expensive grid reinforcements, increase the resilience of the network and provide new sources of revenue for flexibility providers. To ascertain how it should best meet demand for flexibility, the company has launched a consultation on its Flexibility Roadmap. The consultation will run from August to 8 October. If accepted the proposals will come into effect from 2019.

Earlier this summer, UK Power Networks unveiled its plan to create the nation’s first “virtual” solar power station by the end of the year, using PV panels on the rooftops of its London customers’ homes. (7)

Demand-Side Response

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 already in both developed and developing nations.

Energy, like every other sector, is going digital. 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. Centrica’s 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. Europe’s largest demand side response aggregator, REstore, was acquired by Centrica in 2017.

In the same way as demand side response aggregators are emerging as a new type of energy company for the decentralised era, a new breed of companies is providing a route to market services for small generators. Centrica acquired one of Europe’s leading route to market companies, the Denmark-based Neas Energy, in 2016. Neas is able to take all of the Big Data coming from smart meters and Internet of Things (IoT) connected devices to build an accurate real-time picture of energy demand, as well as demand trends. Neas also uses software that combines this data with smart algorithms that judge weather patterns, so that it knows how much any given wind turbine or solar panel is likely to generate, and when. This helps balance the grid by matching supply and demand more accurately. And for the smaller energy producer, it helps them sell their energy at the most accurate market price. The growth in services supplied by companies like Neas is being driven by the rapid improvement and increasing availability of smart digital technology to both energy companies and their customers.

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.

Home owners using Blockchain to become their own micro-energy companies may seem like something for the distant future, but Microsoft’s Michael Wignall says that digital technology is accelerating at such a pace that these kinds of radical changes will be delivered over a short period of time. The Fourth Industrial Revolution we are currently experiencing will make energy systems of the future completely unrecognisable from what they are today. (8)

“Energy storage is all the rage”, says Dave Elliott, Emeritus Professor of Technology Policy at the Open University. But while the field is full of innovation at present, pumped hydro storage continues to dominate. And while storage offers one way to respond to the variability of some renewables, there are other options, including smart grid demand management (to time-shift demand peaks) and super-grid imports and exports (to balance local supply and demand variations across wide areas). (9) “There is nothing that storage can do that something else can’t do,” according to Professor Mark O’Malley of Canada’s McGill University and University College Dublin. (10)

Batteries, capacitors, and flywheels, along with smart-grid demand adjustments, may all be fine for brief periods, dealing with short-term variations in renewable inputs, but are not much use for longer-term lulls in renewable availability. Pumped hydro projects may be able to deliver power for perhaps a day or so, depending on their scale, but for longer term storage that’s when big hydrogen gas or compressed air underground storage facilities may come into their ownlinked to back-up generators. The stores can be charged using green energy already produced, when there was surplus, locally or on a wider basis, with super-grid links for transfers.


September 10, 2018 - Posted by | AUSTRALIA - NATIONAL, energy

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