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Welcome to the weekly roundup from the Oxford Martin Programme on Integrating Renewable Energy.
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Clean energy around the globe

According to a joint report from the International Renewable Energy Agency (IRENA) and the International Energy Agency (IAE), global carbon dioxide emissions could be cut by 70% by 2050 if renewable energy increases to 65% of primary energy supply over the same time period, requiring $29 trillion (0.4% of global gross domestic product) of energy investment globally. This decarbonisation could lead to significant benefits; for example, decarbonisation of the US energy sector would cost $1.8 trillion to implement but could deliver benefits of US$10 trillion every year by 2050, including creating 6 million jobs. 

In California the push for renewables continues through a new bill that would require utilities to deploy clean energy during peak demand periods, in an effort to encourage more clean energy resources to address peak load and reliability issues while avoiding the need for new fossil generation.

Under its Renewable Energy Law, the Philippines have 903MW of installed solar, mostly (900MW) grid connected, by the end of 2016. They are also expected to bring a further 94.2MW into operation this month. Overall, 150 grid connected and 16 self consumption projects have been awarded, with a total capacity of 4,082MW. These figures don’t include a further 55 renewable energy projects installed under different laws.

GreenWish Partners plan construct 200MW of solar PV plants in Nigeria through an investment of $280 million. The plants will go some way to reducing Nigeria’s dependence on fossil fuels (displacing 1.5 million tonnes of CO2 emissions) and relieving its energy deficit, providing enough power for 2.5 million people. 

Alongside financing and political issues, consumer education has been identified as a key driver in delivering a thriving commercial and industrial solar sector in Africa, helping corporate customers understand the benefits of solar and attending to their concerns over any risks. Most finance options available today require customers to make decisions about the technology over a 20 year life span, and many of these customers are unable to judge the benefits or risks of their options. SolarAfrica believe that new financing products to overcome these barriers, and make the decision to adopt solar easier, would be key to unlocking the sector.

In India, where solar deployments have tripled in under 3 years to reach 10GW, there are concerns that the country will fail to reach its target of 100GW by 2022 unless the Renewable Purchase Obligation - believed to be the single most important driver of delivering this target - can be better enforced. This could be supported through improvements to transmission infrastructure, cost declines in solar and wind, voluntary schemes to support distribution companies with financial responsibilities, and incentives and guarantees for solar developers.

A renewable and distributed future

It appears that the focus of a number of major European utilities is now shifting toward distributed and renewable energy resources. According to the CEO of DNV GL Energy, technological shifts supporting the integration of renewables in national grids are leading toward a “new power reality, where solar continues to play an important role” as part of a collaborative effort incorporate combinations (rather than silos) of technologies. E.On too intends “to be a pacesetter in the digitalisation of the energy business” according to chief executive Johannes Teyssen. While they believe that the future is green, distributed, and digital, they also recognise the increasingly fragmented nature of the market, requiring combinations of renewables, network, and customer solutions to provide packages delivering sustainable solutions. EDF Renewable Energy is also looking to become a leader in distributed energy resources with the creation of a business unit to focus on distributed solar and storage projects. And Good Energy intends to streamline its business to pursue new smart energy technologies - such as electric vehicles and storage - to deliver more sustainable and profitable growth and improved customer service. 

However, a recent review commissioned but the Energy Innovation Reform Project (EIRP) suggests that the best route to decarbonise the power sector may not be to deliver 100% renewable generation. Study authors claim that the literature shows that elimination of the final 10-30% of greenhouse gas emissions is more effective when delivered via a diverse mix incorporating nuclear, carbon capture and storage, biomass, hydro, and geothermal. This goes against the United Nations International Panel on Climate Change (IPCC) to some degree, who found that nuclear and CCS may not be needed and may be expensive and risky. But the EIRP study argues the need for resources beyond wind and solar to meet long duration drops in supply from renewables, without which long duration seasonal energy storage is needed, and these technologies have yet to be proven at scale. Other options to support the aggregation of supply and demand, which may be incorporated alongside dispatchable baseload resources, include the potential for geographic aggregation of resources through an amplified transmission system footprint, as well as the need for further research into supply and demand side flexibility options particularly related to market design. 

Demand side flexibility

The UK opened a transitional arrangements (TA) capacity market auction this week, aiming to procure 300MW of demand side response (DSR) capacity for 2017/18. However, according to SmartestEnergy’s Robert Owens, the UK isn’t doing enough and the growth of DSR could be hampered if future auctions are opened up to fossil based power stations. The auction expects a clearing price of £25/kW, and while this may support the business case for DSR, more needs to be done if DSR is to provide 30-50% of the UK’s balancing reserves by 2020. Owens believes that changes such as a long term price signal, more certainty around year-ahead T-1 auctions, capacity set aside for DSR, agreements lasting longer than one year, and changes to testing are needed to give DSR an edge and change how the energy system is managed. 

Meanwhile, EnerNOC, the largest DSR provider in the world, is struggling to retain growth amid falling revenues from grid operators for its services. The company had turned to software to shore up DSR revenues, but the market has proven slow to develop despite indicators of accelerated market adoption.

Despite these setback for DSR in the commercial and industrial sector, Bidgely are looking to open up the residential space to demand management. Providing customers with disaggregated feedback on the energy demands of their household appliances (through analysis of smart meter data), the platform has helped customers in Ontario save 2.25% off their bills, and, when coupled with a gamified approach and real time energy use tracking, enabled customers in Melbourne to reduce peak demand by 30%. Now the company is looking to scale up, working with utilities in the US and Europe to support energy efficiency and demand response goals, particularly in regions with smart meter deployment and time of use rates to engage customers and incentivise demand shifts.

Such demand shifts could be particularly lucrative for customers with solar PV, helping them to maximise self-consumption from their generation assets. A recent publication, exploring household demand in the Netherlands, analysed the ease with which consumption might be shifted. The study found that consumer electronics (21% of total household consumption), lighting (13%), cooking appliances (12%) and other small appliances (9%) are hardest to shift, followed by heating and ventilation devices (14%) and cold appliances (14%). Wet appliances like washing machines, dishwashers, and tumble dryers, which consume 17% of total demand, were found to be the easiest to shift, however, the study saw households increase self-consumption by 1-6%. Maximising self-consumption at the household level was shown to have limitations, but optimising the system across a neighbourhood or district through aggregation of resources may prove more fruitful.

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