powered-edp
powered-edp
If you have any questions about the event please do not hesitate to contact us: business.summit@edp.com 

THE UNTAPPED POTENTIAL OF DECENTRALIZED SOLAR

ALL ARTICLES

solar energy

01 June 2021

As the price of solar technology continues to decline, communities and industries across the world are progressively turning to small scale sustainable energy solutions.

With a technology cheaper than coal and natural gas, according to the International Energy Agency’s World Energy Outlook 2020, we should predict "43% more solar output by 2040 than it was expected in 2018, partly due to detailed new analysis showing that solar power is 20-50% cheaper than thought", says Simon Evans for CarbonBrief.

Solar is now the “cheapest electricity in history”, confirms IEA, "enabling additional investments in grid expansion and integration technologies such as storage, connectivity, and demand-response that increase the value of solar assets".

Thanks to improved and more affordable PV technologies and a favourable go-green environment supported by governments and institutions, the last years have shown a significant cost decrease for solar at a surprisingly quick pace (around 90% fall over the last decade). If anything, solar panel efficiency optimization, falling material costs and economies of scale in panel manufacturing, have successfully deployed solar from distributed generation to utility-scale centralised installations. 

Unlike conventional electricity generation technologies such as gas, nuclear or coal, the solar PV industry is modular and flexible, not dependent on a moving structure that wears out, and production can be managed electronically, without the need for the excessive spending when spinning down turbines or turning off a furnace.

Yet, and despite the undeniable rise of renewables, in particular solar, the acknowledgement of the fall in the cost of solar panels prices and the “structural” decline of conventional electricity generation systems, decentralized solar installed on rooftops of households, businesses, public spaces, or small parcels of land, remains an untapped potential despite its many advantages.

In response to the increasing prominence of a global green turn, it is now the time to reflect and build solid energy strategies that will support small to medium sized decentralized solar systems and strengthen companies and consumers who are already operating with solar energy, independent of the traditional energy system.


DECENTRALIZED SOLAR: THE POTENTIAL TO SUPPORT AN EASY AND FAST DEPLOYMENT OF RENEWABLES

The world is electrifying. In spite of the challenges facing the industry, renewable energy will replace much of today's fossil fuel generated electricity, as more and more countries and energy production companies are heavily investing in renewable solar power, funding enormous projects and encouraging consumers to make more use of solar panels in their home and business environments

According to Marc Perez's study, a doctoral student in engineering at Columbia University, "we are at a point where it is paramount to address the inherent variability of individual small PV plants and design optimal electrical grids solutions to produce the most power at the lowest cost."

In order for the communities and businesses to feel the benefits of clean energy projects and understand their advantages, they need to be able to use it in a more direct and personal manner. The development of electricity production systems for self-consumption, combining small scale solar units with battery storage solutions, allows the production of photovoltaic solar energy in electrical installations in companies, institutions, and homes.

Under a self-consumption regime, the electricity produced during the day is consumed by the equipment in operation and, in case of a surplus power generation, it can be used later through an energy management system, particularly in hours of more expensive electricity tariffs, or alternatively be sold back to the national grid - not only alleviating the electricity bills but also providing flexibility and reliability to the energy network by reducing peak hour demand and producing back up power.

Easy to instal on rooftops and buildings for residents and businesses, due to a simpler design and modularity, avoiding issues like access to land, high costs of capital and longer construction times, small scale solar power economic savings can be huge, especially when hand In hand with the roll out of smart and digital solutions in buildings such as energy management systems or storage.

In Ward Pincus view, "with the urgent need to pursue decarbonization, the large increase in intermittent renewable energy on the grid, the still-expensive nature of energy storage, declining costs of decentralized generation, and the need for greater grid resiliency, decentralized power generation is increasingly recognized as a crucial tool during the energy transition."


INTERMITTENCY AND TRANSMISSION MITIGATION:  FIRM DELIVERY AT THE LOWEST COST

Designed to be an independent supplier for industrial and domestic applications, solar power production transmission and intermittency are still the biggest barriers to PV high penetration across the globe. 

As energy storage technology becomes more affordable, the green-power combination of solar panels plus batteries is popping up on a much bigger scale in the most variable places and industries, enabling new business models and industries. While this trend is not yet putting a huge reduction in our fossil fuel use, and will not yet work on every household, the deployment of battery storage will boost solar energy potential and smooth out the imbalance between the variable supply of sunlight and power demand. 

Understanding the role of decentralized power generation systems to ensure the availability and security of supply is key to understanding energy. Those that fail to comprehend this will be unable to lower their prices, whether they are individuals, utility companies or governments.


For more details on the advancements of solar power, join the EDP Business Summit ’21.

Register now!

If you have any questions about the event please do not hesitate to contact us: business.summit@edp.com

Follow Us

Portugal

Spain

Italy

Brazil

Poland

EDP group companies operating in the liberalized energy trading market: EDP Comercial (Portugal); EDP Clientes (Spain); EDP (Italy); EDP Smart (Brazil) and EDP Energy (Poland).
© Copyright 2021 - EDP Energias de Portugal. All rights reserved