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

While the US stance on fossil vs. renewable energy seems to be somewhat in turmoil since Trump took office, other countries are demonstrating much clearer support for clean power. France plans to invite proposals for 3GW of onshore wind over 3 years, Saudi Arabia plan to tender for 700MW of solar and wind to be built at the lowest cost in the world, Qatar Electricity and Water Company and Qatar Petroleum are planning a 500MW solar plant, and Danish utility Dong Energy set a target to drop from 46% coal to zero coal by 2023. And in Victoria, parliament have passed new laws to ensure that solar feed-in-tariffs take into account the avoided social cost of carbon and avoided human health costs attributable to a reduction in air pollution. 

In fact, a new report by Carbon Tracker Initiative (CTI) and the Grantham Institute at Imperial College London suggests that PV could supply 23% of global power generation in 2040 (substantially more than the 11% ExxonMobile estimates) and 29% by 2050. This, the authors argue, is due to the increasing pace of low-carbon advances compared to business as usual, and the likely stranding of fossil fuel assets. 

Together with the growth in electric vehicles (EVs), this could curtail demand for coal and oil by 2020, with EVs representing 33% of road transport by 2035 (BP’s estimates this figure to be 6%), and further innovation making today’s estimates seem conservative. With Germany aiming to phase out petrol cars by 2030, and Norway and the Netherlands by 2025, the report argues that that business as usual baselines used in other models be abandoned and replaced with new base level forecasts. 

2017 could be a crucial breakthrough year for electric vehicles. Norway is on the cutting edge of this, with EVs contributing 40% of all new registered passenger cars in 2016, brining the country’s total to over 100,000, and Europe’s to 500,000. China leads the EV market globally with about 600,000 deployed and a target to reach 5 million by 2020, and though the US ranks third with under 500,000 vehicles, momentum is picking up with 400,000 people having paid $1000 to be on the waiting list for the Tesla Model 3.

And in London the Metropolitan Police Service have kick started a roll out of electric vehicles to help combat the city’s air pollution problem; they aim to replace 700 police force vehicles through 2017 alone.


As renewable energy grows in Australia, so too has the push for storage to support variability created by wind and solar. The country’s prime minister has declared that energy storage will be a priority for 2017, with the Australian Renewable Energy Agency (ARENA) working with the Clean Energy Finance Corporation to develop a new funding round for large scale storage and other flexible capacity projects. 

In Europe, France is expected to be the next key market for storage following a call for 50MW of PV plus storage in the French islands, coupled with recent ancillary service market changes and new self-consumption regulations.

However, despite the benefits that storage can bring, a recent study from the University of Texas suggests that the environmental impacts of storing solar power in home battery solutions has a higher environmental impact than connecting solar panels to the grid; in a study of 100 homes kitted with solar panels, the study authors found that those with storage systems used 8-14% more electricity at night than those who were connected to the grid. They also saw an indirect impact due to the time of day homes are drawing power from the grid.

This finding is reflected in a study investigating storage impacts in the Irish power system; here researchers found that energy storage actually increases emissions for typical storage operating scenarios, unless they are being used to avoid curtailment of renewable energy. However, solar with storage is still better than no solar at all, and of course these findings will change as electricity grids are decarbonised further.

Aside from grid benefits and environmental impacts, a new report from the International Finance Corporation indicates that energy storage could play a major role in driving development in emerging economies though supporting the integration of renewable energy to provide widespread access to electric power. Despite barriers such as local content requirements and obstructive regulations in electricity market design, the falling technology costs along with government support and low cost financing will allow storage to play an “increasingly important role in the development of many emerging market countries”. 

Microgrids and demand side management

Microgrids are becoming increasingly attractive for a variety of applications. While resiliency has been a historic driver of microgrid applications, the declining costs of distributed resources make it cheaper to generate energy than to buy it from the grid. While this isn’t enough on its own to create a paradigm shift toward microgrids over conventional grids, three clear value propositions are emerging that could signify a start along this path: (1) microgrids to defer transmission and distribution costs, (2) microgrids as a service to a customer, and (3) microgrids developed for both customer and grid-wide benefit.

Several microgrids have already been developed under these models, and others are being planned. In Alaska, ABB are developing a microgrid in the Anchorage-area, integrating renewables from a 17MW wind farm with flywheel and battery storage systems to boost reliability to the service territory. And on Oahu, Hawaii, Stem has installed a 1MW storage-as-a-service virtual power plant to help 29 commercial and industrial customers reduce demand charges on their bills while delivering flexibility into the grid.

And in the residential sector, Honeywell and Whisker Labs are looking to help customers better manage their energy costs, increase efficiency, and support grid stability with their new Connected Savings demand side management platform. The data collected from connected smart thermostats will be used along with weather data to model how homes consume energy under different weather conditions to support more intelligent management of HVAC demand. And while only 50,000 customers have been involved in Bring Your Own Thermostat programmes for demand side management to date, Navigant estimate that up to 20 million customers (a $3 billion market) could be involved in the future, seeing small changes at the household level aggregating into significant impact on the grid. 

Market arrangements

Market arrangements will need to adapt to accommodate the emerging changes in technology to grow renewables and support grid flexibility. In some instances this is already starting to happen - the UK’s most recent capacity auction saw contracts with a combined capacity of 209MW awarded to demand side response technologies. Approximately half of this capacity was awarded to Flexitricity, who will provide services through the use of both standby diesel generators and flexible management of loads such as air conditioners and lighting. British Gas, E.ON UK and EDF won contracts to offset loads and manage generation assets at various industrial facilities, and Limejump and Energy Pool UK will aggregate on-side generation and load reduction across multiple sites. The demand and support for DSR is growing, with National Grid setting a target of meeting 30-50% of balancing services via DSR by 2020, andthe Department for Business, Energy & Industrial Strategy announcing up to £7.6 million in funding to advance DSR technologies for the private and public sectors. However, Open Energi’s Chris Kimmett believes the priority now needs to be market reform to ensure demand side providers have equal access to supply side. 

Market reform is also needed to support the growth of energy storage. In the US, the Federal Energy Regulatory Commission (FERC) have directed the Mid-continent ISO to file tariff changes that allow storage to participate "in all MISO markets they are technically capable of participating in, taking into account their unique physical and operational characteristics.”

The New York ISO has developed a roadmap to implement dispatchable DERs by 2021, enabling emerging resources to participate in energy markets. The roadmap hopes to develop a more flexible grid that can integrate DERs into energy, ancillary service, and capacity markets in a way that leverages economic scheduling and real-time locational pricing to treat DERs comparably with other resources. This will require enhanced measurement and verification methods, the development of incentive structures that align flexibility and performance with system needs, and access to real time grid performance and customer demand data, but should go some way to building the grid of the future.

And UK energy regulator Ofgem have published a discussion document on local energy schemes, including local generation initiatives, microgrids, and virtual private networks. They conclude that an evolution of the regulatory framework is required to account for the growing body of local initiatives, and that the growth of local energy should be incentivised particularly where system benefits can also be realised. However, they also express concern over cost recovery arrangements, where customers participating in local energy schemes will shift recovery of network costs to less-well off customers who cannot participate.

However, under the right market structures these negative impacts are unlikely to be realised, according to a recent study conducted by Lawrence Berkeley National Laboratory. While the authors find that states with high levels of distributed solar can see customers without panels end up paying more for their power, the effect is so small that energy efficiency and appliance standard programs had an effect 35 times larger impact than that of solar. Net metering using volumetric rates can raise or reduce prices for other customers by up to 5%, though the range is reduced where rate structures employing fixed or demand charges, and for the vast majority of cases, "the effects of distributed solar on retail electricity prices will likely remain negligible for the foreseeable future."

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