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

In a new report, Mercom have forecast global solar installations to reach 76GW by the end of 2016 due to unprecedented levels of activity in China, which in turn led to an oversupply situation and module price crash. China surpassed its 18.1GW H1 2016 installation goal with 22GW installed by June 30, the US is expected to reach 13GW by the end of the year (a 78% year on year growth rate) dominated by utility scale projects, and Japan and India are following as the third and fourth largest markets.

Argentina, who’s capacity today comes largely from fossil fuels are working to jump start the renewables industry through a series of government auctions, expected to increase output by 10GW over 10 years.

In India too, the government may become a key driver of uptake; the rooftop solar market, which has grown by 98% in the last 4 years, has to date been driven mainly by price competitiveness. With a 63% share the commercial and industrial segment dominates, followed by residential (25%) and government buildings (12%). But there is a strong impetus for increasing deployment on government owned buildings of up to 4GW by 2022.

And Indonesia, with its 600 isolated grids, provides further opportunities for solar developers who can find innovative solutions with both technology and financing. 

During the COP22 conference in Marrakesh, the United States Agency for International Development (USAID) announced US$4 million in new investments for off-grid solar in Africa, to go to 8 companies  supporting solar start up ventures via the US$36 million ‘Scaling Off-Grid Energy’ programme. This will help will supply up to 120,000 additional connections in off-grid communities across Africa.

In Los Angeles, a push toward the state mandated goal of 33% renewable energy by 2020 has made tangible the need to expand access to clean energy beyond just the most affluent. Now the Los Angeles Department of Water and Power is moving ahead with a programme to bring access to low income customers, whereby they can lease rooftop space for fixed monthly payments of $30 for 20 years. And a companion programme, Shared Solar, will focus on customers in apartment buildings.

All this added renewable energy is exciting business. In 2015 alone, 147GW of power globally came from renewables. But, as the trend continues, ensuring these resources are well integrated, reliable and accessible is critical. And one innovative option to tackle the challenge of unpredictable energy output is to combine multiple sources, such as wind and hydro, consolidating the two generation sources into one grid connection. The main challenges are geographic - finding the right site in terms of resource availability, with enough space for both sources. Another challenges is in pricing; hybrid renewable models are in early stages of development so pricing and market behaviour need to be carefully considered. However, the use of new digital technologies to allow real-time control and monitoring, power prediction to optimise output, predictive analysis to spot potential failures sites, and automation of plants, can all support cost reductions. While the consolidation of two resources is far from traditional, it has the potential to change how we manage energy and may support the integration of variable resources. 

Storage

Energy storage is another such solution that can support the integration of renewable energy into electricity grids, but to make financial sense storage systems need more than one stream of revenue, which is often held back by regulatory barriers. But newer, dual stream revenue models where storage provides a two-way street supporting both customer and grid (rather than supporting a flow of services from one side of the meter to the other) may provide better opportunities. 

Such new value propositions have the potential to accelerate energy storage market growth, creating approaches to sharing value between end-customer and the energy system through models such as:

  1. ‘Shared Benefit’ – Providing customers with an additional upside such as through the aggregation of behind-the-meter battery storage to provide ancillary and demand response services.
  2. ‘Storage for free’ – New financing models to overcome the upfront cost barrier.
  3. ‘Community Storage’ – Utility side of the meter assets integrating an offering for a larger part of the value chain – DNOs, energy suppliers, customers and generators.

One example is Advanced Microgrid Solutions, who have recently announced a deal to deliver 50MW storage for Southern California Edison. This will use behind the meter storage, bringing together energy storage technology and analytical software to enable building owners to improve energy efficiency, lower bills and reduce greenhouse gas emissions, while also enabling aggregation of the devices concentrated within a single feeder.  

It seems like companies putting a new spin on energy storage are popping up all over the place, the here are 12 startups gaining attention in the sector to watch out for… 

BMW are working to bring intelligent charging to EVs to better integrate with both the grid and on-site renewable generation. Via an online app, users will be able to see vehicles, charging stations, and charging plans, which can be managed via the app to charge during the most favourable time zone, for example, to prioritise electricity from renewable generators. 

And an open fund for solar and storage has recently been launched by Franck Constant, the co-founder of Sonnedix Group and director of Sithe Pacific. The fund, “Constant Energy”, hopes to reach US$100 million by the end of next year to support target nations develop clean energy technologies. 

Policy priorities

To support solar and storage coming together to deliver affordable flexibility into Europe’s grid, the regulatory framework needs a revamp. SolarPower Europe is calling on the European Commission to address 10 policy priorities:

  1. An EU-wide definition of ‘electricity storage’ to be introduced in the revised Electricity Directive;
  2. Clarifying the definition and rights of active consumers regarding storage: the REDII should enshrine the right for consumers to self-generate and consume renewable energy;
  3. An appropriate reform of the intraday markets is crucial for enabling large-scale solar plants to better take on balancing responsibilities;
  4. A real market for selling and procuring flexibility services to be developed, both at transmission and distribution levels;
  5. A clear basis regarding rules and circumstances under which TSOs and DSOs may operate storage solutions must be developed;
  6. Targeted solar tenders to incorporate as a weighting selection criteria the co-location of solar and storage;
  7. The exchange of electricity on a community scale via collective self-consumption schemes must be possible for active consumers. Third party intermediaries should be allowed to operate active consumers’ electricity storage devices via pooling platforms, such as virtual power plants or peer-to-peer mechanisms;
  8. Clear rules regarding data transparency and access for all stakeholders are required;
  9. Active consumers should be remunerated fairly for providing their devices to deliver services that support the electric grid. To achieve fair remuneration and service provision, tariffs must provide consumers and service providers with price signals to be able to act upon market developments and system needs; and
  10. Distribution and grid tariffs must be ‘fit for the energy transition.

They believe that these policy shifts could go a large way to enabling a 35% targets for renewable energy in 2030.

While national programs to address climate and energy issues are desperately needed, a large part of the solution will also be local, involving people in decisions and action around how energy is produced and consumed. A recent study highlighted that by 2050 half of all Europeans may be producing their own energy, either at home, in business, or as part of a cooperative, serving almost 50% of Europe’s electricity needs. Prices of renewable assets are declining, and supporting technologies like storage and demand response are advancing rapidly, leaving traditional energy companies trailing in their wake. Regulatory frameworks favouring the status quo will slow the transition to clean energy, but the right policies can open up a significant potential for citizen owned energy, placing people at the very centre of future energy systems.
 

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