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THE FUTURE OF ENERGY CALLS FOR FLEXIBILITY

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flexibility

15 June 2021

Why flexibility of the power system is key in the operation of future power networks.

The recent boost in renewables electricity generation created a challenge for the management of power networks. In modern societies, when you turn on a switch, you expect that there will be light in the lamp, and other situation is not simply tolerable. If this does not happen in a society highly dependent on electricity and electronics for practically all functions, serious situations of security and economic loss can be incurred.

This means that electricity, that is not storable, must be always available at the point of consumption, and the management of the supply up to now was able with conventional techniques to dispatch the flow of power through the networks to ensure this certitude. Managing the number and location of the power plants needed to keep the power frequency stable within narrow limits. Varying the output of the power plants and using the only large storage technique available today, reverse hydro storage, when available.

So, it was possible to ensure the reliability of the power supply, by managing the generation part of the power system. But reality changed and is changing faster and faster. Renewable generation is fundamentally different from conventional generation. Conventional generation is foreseeable, and manageable. Renewable generation can be foreseen but is not manageable. When we need power, the sun or the wind simply may not be there, or you can have lots of sun and wind and not enough consumption.

Both wind and solar produce in average between around one fourth of the time, in the best locations one third, but in others only one tenth. This means that the generation becomes highly variable when before was stable, and the installed capacity when the sun is shining and the wind blowing, can easily overcome the existing demand, with the risk of losing a lot of the power produced.

Being flexible with how and when we consume and produce energy means we can make sure the power generated and delivered to us always matches the amount we use. As underlined by ofgem UK, it is particularly important that the rules governing how electricity is bought and delivered will allow consumers and industry to draw as much benefit as they can from network flexibility. According to the same source, flexibility can be defined as “modifying generation and/or consumption patterns in reaction to an external signal (such as a change in price) to provide a service within the energy system”.

To date, the energy industry has typically provided flexibility on the ‘supply-side’. For example, to make sure supply always matches demand, electricity power stations have changed how much they produce. Network operators have also built enough cables to make sure electricity can always be transported to consumers.

But our energy system is changing and continuing to rely on supply-side solutions alone would be expensive and ultimately, impossible. New ways of providing flexibility are emerging. They can help us deliver against our carbon commitments, while providing reliable and secure supply at minimum cost.

As stated in the new IEA Report released in May 2021: “Electricity system flexibility – needed to balance wind and solar with evolving demand patterns – quadruples by 2050 even as retirements of fossil fuel capacity reduce conventional sources of flexibility. The transition calls for major increases in all sources of flexibility: batteries, demand response and low‐carbon flexible power plants, supported by smarter and more digital electricity networks. The resilience of electricity systems to cyberattacks and other emerging threats needs to be enhanced”. These are basically the new flexibility methods, which are the following, as described by ofgem UK:

  1. Demand-side response: Consumers (the ‘demand-side’) can sign up to special tariffs and schemes which reward them for changing how and when they use electricity (known as ‘demand-side response’). Smart meters and other technologies will make this easier than ever for domestic consumers. DSR is an important part for a flexible energy system. But for that to happen, we need to rollout smart meters to all points of consumption and develop the AI to deal with the big data collected. The benefits are huge.
  2. Energy storage: We can use batteries or other forms of storage to store energy when it is plentiful, or when there is too much for network cables to carry. This energy can then be used at a time when it is needed. But also, here batteries costs must decrease with similar speed as solar PV did in the last decade. The amount of investment done, pushed by the EV race between big car constructors allows us to expect that this will happen.
  3. Distributed generation: We can use low carbon electricity we generate locally at home or at work, such as from a rooftop solar panel, to help reduce the costs of transporting it and save money on bills. But to manage local production, we need again bi-directional smart meters installed, and a new regulatory frame that will incentivise the rapid deployment of a prosumer infrastructure.

Doing more of all these things will help us to integrate more sustainable energy sources, like solar and wind power, into our supply system. Without these flexibility mechanisms, there is a limit of the total of variable sources of energy a power system can accommodate. These are also new businesses for the utility industry, and the role of governments and regulators is to create a clear set of rules that will define who´s doing what, and how the rewards will be distributed. Because there is a big reward, and the future will depend on how fast this reward will be captured.

Want to know more about energy flexibility and its key role in the world of tomorrow? Join the EDP Business Summit ’21.

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

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