An electrical offshore substation run by Germany’s biggest power supplier Eon is pictured at the … [+]
In recent weeks, the media landscape has been awash with stories declaring the beginning of the end of the age of hydrocarbons in America and around the world.
The facts on the ground, however, paint a different story.
As of this year, renewable generation accounted for only 17.5% of the US’ energy mix. While Deloitte predicts this number will grow to just shy of 50% by 2050, it would be naïve to assume that fossil fuels won’t continue to play a significant role in our lives for the foreseeable future.
The road to the energy system of the future is not a straightforward one and policymakers, utilities and governments have a critical role to play in ensuring we don’t run headlong into the obstacles and challenges that a changing energy system will inevitably bring.
When thinking about energy, people tend to focus on production and consumption, missing one critical part of the process: the distribution of energy through the grid. Around the world, transmission system operators, or TSOs, manage our grids, ensuring power is delivered from producers to consumers while balancing supply with demand and ensuring the system remains stable and reliable.
Most of these grids were initially constructed in the early 20th century and were designed for a much simpler world where large, fossil fuel powered plants would deliver power in one direction only to consumers, located in high demand areas, most often cities.
This simple “top-down” approach is no longer fit for purpose when attempting to manage a system with large-scale, intermittent renewable energy generation and growing amounts of distributed energy resources such as rooftop solar panels, small-scale wind turbines, batteries and even electric vehicles that can accumulate excess energy.
These “grid edge” technologies, so-called because of their location within the energy system, are turning traditional consumers into “prosumers”, allowing them to sell power back into the grid, and in the process helping system operators to balance supply in a more agile way, while mitigating excess capacity and shortages.
These complex energy flows require significant amounts of innovation and investment in redesigning our grid infrastructure, a crucial point often missed while renewable energy and EV growth grab the headlines.
The challenges of renewable energy generation outrunning the infrastructure that underpins it are already evident, as Germany experienced last year. Despite an exceptionally windy winter in which the country’s offshore windfarms generated record levels of output, its grid was unable to deliver large amounts of electricity to the large population centres in the South.
The saturation of excess energy resulted in negative power prices, forcing the grid operator to pay consumers to use excess power and generators in neighbouring countries to curtail energy production to stop the grid from being overwhelmed.
These instances provide a stark warning for many states within the US where policymakers and utilities continue to spur the growth of renewable generation unabated but must also consider the need for parallel investments in grid infrastructure.
Fortunately, around the world many grid operators have begun to anticipate and address these problems, developing innovations that foster smarter, more flexible and efficient grids.
A noteworthy case in point is the small south-eastern European nation of Slovenia, a country barely the size of Houston, but whose’ power grid operator ELES has a reputation for developing smart grid innovations usually the reserve of much larger grids through cross-border cooperation.
ELES’ FutureFlow project is a collaboration involving 8 European nations and aims to develop solutions for balancing the electricity system and managing power flows across the European electricity network.
Acutely aware of the grid balancing challenges caused by increased renewable energy penetration, the project has led to the development of a cloud-based trading solution which will enable consumers and “grid-edge” distributed generators to more easily and intuitively sell power into the grid based on demand. As a result, system operators have more flexibility in balancing the grid, helping to counteract the issues of intermittency that renewable generation can create.
As America’s renewables commitment grows, solutions like FutureFlow will become increasingly essential. I previously expressed my doubts about California governor Gavin Newsom’s hubristic commitment to phasing out internal combustion engines across the state by 2035. For his plan to work, California’s grid operator will need to invest significantly in an already stressed grid that can manage the surges and troughs in demand caused by large-scale electric vehicle charging. New predictive technologies and the involvement of grid edge suppliers might help with this massive change.
On a federal level, the US Department of Energy has actively been looking into how the growth of rooftop solar can transform consumers into “prosumers” and the recent acquisition by the UK’s Octopus Energy of Silicon Valley start-up Evolve Energy, a retail electric provider that sells power on the wholesale spot market to Texas residential consumers, is evidence of how investors see massive potential in the market here.
As the energy transition continues, the infrastructure that carries energy is just as important as the assets used to produce it. The renewable energy generational goals of many states are admirable, but America needs a grid system that is capable of handling that capacity in order to truly maximize the potential of new technologies coming to market.
A failure to do so will unavoidably lead to negative consequences seen in Germany and elsewhere, putting energy reliability at risk and halting America’s transition towards the energy system of the future.
