Date: June 21, 2019
OSLO, NORWAY … Governmental policies that provide regulatory certainty are needed to spur private investment in the flexibility technologies required to ease the transition to a high-renewable energy future.
This is the core finding of a new industry white paper “Developing flexibility: the new cornerstone of the grid” commissioned by power management company Eaton and the Renewable Energy Association. The paper includes market data, expert insights and case studies from analysts and industry players including: Bloomberg New Energy Finance (BNEF), Britain’s Renewable Energy Association (REA), Eaton, Drax, Nord Pool, Good Energy and Upside Energy.
In Europe, wind and solar power will dominate electricity generation from the early 2020s, due to powerful drivers including statutory requirements to meet the global Paris climate agreement, the falling cost of solar panels and wind turbines, rising carbon prices and the electrification of transport and heating.
Electricity demand has always varied with the seasons, weather and time of day. As a result of growth in wind and solar power, electricity supply will also be increasingly variable. To avoid resulting, higher system costs, flexibility must become the new cornerstone of the grid. Technologies and business models that promote flexibility can help smooth out this variability, for example by aligning peaks in demand with peaks in supply of wind and solar power.
Today’s electricity market and network regulations are failing to keep up. Market access requirements favour large, centralised fossil fuel and nuclear power plants. Governments and their energy regulators are thereby holding back a low-carbon energy transition, by increasing the cost and complexity of increasing the market share of variable renewables.
The following are the most important deficiencies highlighted in the paper where regulatory action could make the biggest immediate positive impact. Many of the related recommendations are based on the experience of the Nordic markets, which are the most advanced in Europe in terms of regulation and government policy that encourages private investment in smart, flexible energy systems.
The white paper “Developing flexibility: the new cornerstone of the grid” is available for download here.
Eaton is a power management company with 2018 sales of $21.6 billion. We provide energy-efficient solutions that help our customers effectively manage electrical, hydraulic and mechanical power more efficiently, safely and sustainably. Eaton is dedicated to improving the quality of life and the environment through the use of power management technologies and services. Eaton has approximately 100,000 employees and sells products to customers in more than 175 countries. For more information, visit Eaton.com.
The Renewable Energy Association (REA)
The REA is the UK’s largest trade association for renewable energy and clean technologies with around 550 members operating across heat, transport, power and recycling. The REA is a not-for-profit organisation that represents renewable energy and clean technology companies operating in over fourteen sectors, ranging from biogas and renewable fuels to solar and electric vehicles. Membership ranges from major multinationals to sole traders.
The REA’s EV sector group is comprised of around 70 members delivering the critical infrastructure needed to deliver the transition to a zero emission car and van future. The REA additionally serves as secretariat to the All-Party Parliamentary Group on Electric and Automated Vehicles. For more information, visit: www.r-e-a.net.
Vera Grishchenko, VeraGrishchenko@eaton.com