The International Renewable Energy Agency has presented what it says is a first-of-its-kind mapping and analysis study of the innovations that will transform the power sector.
The Innovation Landscape for a Renewable-Powered Future: Solutions to integrate variable renewables report shows how common ground between innovative business models, market design, enabling technologies and system operation can lower the integration costs of renewable energy assets.
With close to 15% of its electricity coming from renewables, the EU has the world’s highest level. “Europe has shown tremendous leadership in initiating the system-wide innovations needed to support the widespread adoption of renewables and decarbonize the global economy”, said IRENA director-general Adnan Z Amin at the report’s launch in Brussels, which was also attended by EU energy and climate action commissioner Miguel Arias Cañete. “The region’s success shows us that innovation is creating an energy transformation that is technically feasible and economically attractive.”
The rise of solar
The price of PV fell more than 80% between 2009 and last year as the price of solar electricity fell 75%. Those cost reductions clearly outpaced the figures associated with wind power generation and between 2005 and 2016, the world’s installed PV capacity increased more than sevenfold. In 2017 alone, 98 GW of PV capacity was installed – this year, it is predicted the 100 GW barrier will be breached.
Policymakers, grid operators, and utilities are scrambling to find solutions to accommodate the flexible nature of renewables generation. While wind and solar accounted for 10% of the global generation mix in 2017, by 2050 they are set to contribute 60%.
Irena identified 41 key developments in the integration of renewables, focusing on markets in which intermittent generation already contributes a high share. Utility-scale and behind-the-meter storage top the list of innovations which are helping renewables bed in to the energy mix but the agency has also included modern utility business models, peer-to-peer energy trading, blockchain, the internet of things, power-to-x and market designs innovations such as capacity market adaptations on its list.
Learning from the early adopters, IRENA has suggested an eight-step approach to integrating renewables.
Play the long game
Firstly, the agency advises far-sighted planning to strike a balance between ‘quick wins’ and long-term gains.
The report’s authors add, an holistic approach to energy system redesign should be pursued. To that end, crossovers between technological advancement across various sectors should be identified. “The implementation of such innovations to unlock flexibility across the whole power sector would result in lower costs to integrate variable renewable energy, and so support the energy transformation,” the report states.
For the adoption of bespoke solutions, ‘sandbox’ exemptions from market regulations can foster innovation and startups can offer the lead as they are more nimble than traditional utilities.
According to the report, “The increasing penetration of decentralized energy resources and the emergence of new market players, such as prosumers and active consumers, will usher in a new era.” New business models for distribution system operators and utilities should be developed in line with those consumers willing to play an active role in the energy system. Clear benefits must be spelt out and doing so could add vast amounts of flexibility to energy systems.
Market designs for balancing services and energy prices could also boost the deployment of renewables without hampering grid stability. By responding to digitalization and decentralization, and the needs of the power system, more mature markets have shifted from paying a price per kilowatt hour to providing a flexible marketing model. That is accommodating more low-cost deployment of renewables and the integration of renewable power, e-mobility and space heating and cooling are further steps in that development.
The authors also note deployment of renewables greatly benefits from the adoption of digital innovations such as artificial intelligence, the internet of things and blockchain, for example.
“Energy systems should make far more use of the ‘smartness’ that digital innovations enable,” states the report. “Notably, other industrial sectors have applied digital technologies at – close to – full potential, providing knowledge that could be transferred to the power sector.” Such sector coupling should be emphasized not only with regard to the use of digital technologies but as a wider approach, says the report, adding “There is ample opportunity to learn more from other sectors and from different players.”