London: Europe’s next wave of solar needs to be smart

The future of the solar PV sector in Europe is becoming smarter and digitized; this was one of the messages to emerge from the Smart Energy UK and Europe conference that took place in London, 28-29 January.

“PV itself is a smart technology. And it is becoming all the more cheaper,” said James Watson, CEO of Solar Power Europe, Europe’s solar PV association. However, although the technology is one, it satisfies two different needs, Watson told the conference: firstly, the distributed direction of the energy system revolving around smaller projects; and secondly, the centralized part of the system, where larger projects are used to inject power to the grid and where power purchase agreements (PPAs) matter the most.

According to Solar Power Europe data, there are four million PV systems operating today in Europe, covering the power needs of 30 million households. Rooftop PV (both residential and commercial) specifically has provided about 67% of Europe’s new installations in the last five years.

The Solar PV capabilities in the future will be built around providing grid services, Watson suggested. “Reactive power and negative balancing services can be achieved by PV systems alone, while by adding storage to the PV system, positive balancing and self-regulated consumption can also be offered. Therefore, what we need now is the right regulatory framework to activate such services in a market-based approach,” he said.

Smart energy regulation is indeed among the main demand of the European solar industry today, which sees the power markets of the continent being oversupplied. With few exceptions (e.g. the U.K.) there is more power fed into the European grids than needed, and solar developers understand that a new phase of PV investment can only materialize under a new business model that includes storage and smart energy management.

In the era of a smart PV and grid interface, the prosumer “will also acquire a new level of flexibility and value,” noted Watson.

Valuing flexibility

“Energy system flexibility is not a part of any European national regulatory framework,” Frits Verheij, executive board member at the Universal Smart Energy Framework (USEF), told pv magazine. USEF is a consortium of seven energy market players (ABB, Alliander, DNV GL, Essent, IBM, ICT and Stedin) and won the Smart Grid Network and Communication Award at the Smart Energy UK and Europe event.

However, flexibility is already out there and, in order to create value from it, USEF has established a framework that rewards the stakeholders for their flexibility. The framework, says USEF, can be adapted to fit different scenarios and markets, and the only prerequisite is that they share its core principles, specifically “that flexible energy use is considered a commodity, and that trading it will impact the interaction of all stakeholders in the energy value chain.”

Certain regulations are in place in various countries, so to apply the USEF framework in a country, you will need the national regulator to agree. Verheij noted, however, that many countries allow pilot projects to move away from existing regulations. “This is the case in the Netherlands for example, where we already run our first pilot project and a second one will begin next month.”

USEF is also in talks regrding pilot projects in Belgium, Denmark and elsewhere, and wants to be part of 25% of all smart energy systems in at least five different markets by 2020.