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

Trump is expected to issue several executive orders this week to begin rolling back energy regulations and climate change programs. It is expected that the Energy Star programme will be required to either close out or transfer to a non-government entity, and that the Department of Energy will see a cut from the Office of Energy Efficiency and Renewable Energy’s (EERE) budget of between $700 million and $1.4 billion. 

But despite political uncertainty around the US's future in clean energy, the industry is rolling forward like a steam train. As of 2016, the clean energy sector brought in $200 billion in revenue in the US, and is growing at a rate much faster than the world economy (7% vs. 3.1%), with solar PV seeing a revenue growth of 30% and a growth in jobs of 25%. In fact, GTM research anticipate the US solar market to triple in the next five years, in part due to the rapidly declining system costs. 

Last month, wind turbines in Scotland generated enough energy to cover two-thirds of the country's total electricity consumption, helping Scotland toward their aim of generating half of the county’s energy needs (heat, electricity, and transport) from renewables by 2030. In fact, the UK’s carbon emissions have now fallen to their lowest levels since the 19th century as coal use continues to plummet, falling by 74% in a decade. 

But despite the promise renewables can bring, business rate changes in the UK are a setback for solar projects. The proposed changes would see power generators under 100MW received drastically reduced payments for providing electricity during peak demand - from £45/kW to just £2/kW. Ofgem says that these changes could save households £20/year on their electricity bills, however, this could significantly damage smaller, local generators such as hospitals, universities, and industrial manufacturers, as well as the over 1000 schools who installed solar panels to address climate change, educate pupils, and provide revenue support, but now face an extra £1.8 million a year, making many projects financially unviable. 

While this may mean less than sunny spells for solar in the UK, the technology is looking toward a brighter future in Africa as the EU’s Africa Renewable Energy Initiative announced 14 new projects representing 1.7GW and a total potential investment of almost €4 billion. In additional to projects developing rural electrification, geothermal and grid upgrades, solar features strongly with a 25MW plant planned in Benin, 13MW and 30MW plants in Niger, a 30MW plant in Chad, and a 100MW plant in Nigeria.

France too has sought to increase ambitions toward solar as the technology “overshoots expectations”. Utilities, including Eon, RWE and Enel, are becoming prolific investors in European solar, supporting the development of the market on the continent. And Amazon has announced their goal of deploying solar technology on 50 fulfilment and sortation centres globally by 2020. This will commence with 15 US installations in 2017 expected to have a combined capacity of up to 41MW. According to Dave Clark, senior vice president of worldwide operations at Amazon, diversification of their energy portfolio means the company can "keep business costs low and pass along further savings to customers. It’s a win-win.”

But despite progress to date, a new National Academy of Sciences paper projects that climate change driven temperatures increases will require further investment in generation capacity. In the US, temperature rises (2.8% on average and 7.2% peak) will require a $70 billion investment in new capacity, and, in extreme cases, the peak could rise by 18% requiring an $180 billion investment. Renewables, while beneficial for tackling climate change, may not do much to support peak periods as their generation profiles may not match demand spikes, driving a need “for storage technology, demand response programs, and alternative pricing schemes."

Storage

While storage represents a key opportunity to support the integration of renewables, multiple revenue streams are likely to be required to realise the economics of the technology. Now Consolidated Edison is testing this, partnering with NRG Energy on a 1MW/4MWh mobile storage project in New York City. The batteries will be used to shave peak demand and lower distribution costs by deploying them to where they are needed on the grid. When they are not deployed they will reside at NRG’s Astoria generating plant, where NRG will take responsibility for managing their participation in New York ISO’s wholesale electricity market and energy ancillary services market - though this may require some changes made to NYISO’s rules to allow mobile assets to participate in the market.

Legislation can be a significant barrier, preventing storage from participating in all markets. While this can make the deployment of storage difficult, some utilities are pushing forward regardless. E.ON, for example, is adding two 9.9MW storage facilities to its wind farms in Texas, designed to provide ancillary services to the Electric Reliability Council of Texas (ERCOT) market and to increase system reliability and efficiency. This follows the emergence of a diverse range of applications and business models seen throughout 2016 across the US, though many are still arguing the case of regulatory modernisation to facilitate easier integration of energy storage and avoid a framework as disjointed as that of solar. 

While some are also touting the potential storage benefits that electric vehicles may bring, speakers at the recent Energy Storage Summit in the UK believe that the role of electric vehicles on the grid has been largely ignored. In particular, fast chargers, with power draw from the grid up to 120kW, may have significant impact. While there are a number of trials going on around the country it’s not yet clear how charging infrastructure will ensure that EVs play a role within the energy system as a whole.

Looking to address just this issue is a new project, part funded by Innovate UK, to turn a car park in Solihull into a MW scale battery providing power to the grid from connected electric vehicles. The project will develop a secure data management platform to collect, aggregate and optimise energy from grid-connected EVs at a single location, demonstrating how EVs, smart ICT systems, and big data can come together to manage energy flows. 

The demand side

In recent years a number of models for residential solar installations have emerged, in particular residential solar leases, which in 2014 took 72% of the market share. Since then, however, the market has been trending toward customer ownership, which now dominates in the US with just 47% of all new residential solar installations in 2016 Q4 being third party owned. In California, where installers are shifting toward cash sales more quickly than the rest of the country, this switch has been demonstrated particularly strongly with only 36% of panels owned by third parties in 2016 Q4. And the state’s Public Utilities Commission is proposing to double funds for the California's Self-Generation Incentive Programme, under which utilities would collect an additional $83 million from ratepayers to support incentives for behind the meter generation and storage, with 85% of the new funding targeted at storage resources.

The rise is consumer sited resources is just one way in which customers are become more active participants in electricity grids. In California, Southern California Edison have this week issued a request for offers, seeking between 15-55 MW of distributed generation, storage, demand response and load shifting to increase reliability in a portion of their grid considered at risk of outages. 

Smart meters are frequently cited as being key to realising demand side participation, however, a new study from the University of Twente Enschede in the Netherlands has found that 5 out of 9 types of smart meter (including those deployed in the UK) give readings up to 6 times too high. This, the researchers say, is due to the use of products such as energy saving light bulbs, heaters, LED bulbs and dimmers, which change the shape of electric currents and result in distorted readings. The study was carried out in a laboratory setting, and it’s not clear whether the same scale of inaccuracies would be seen in the home, however, it does show that readings can deviate significantly from actual consumption. This finding comes within days of SSE supplied smart meter displays showing inaccurate information - some as high as £30,000 for one day - following a routine software upgrade. These issues will need to be resolved if the technologies is to be trusted as the providing a gateway for new types of consumer engagement in the grid of the future.

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