The upcoming Engerati Big Report looks at some detail at the technical, regulatory and financial pressures currently affecting players involved in the generation, transmission and distribution of energy – and likely to be impacting on them for some years to come.
The central thesis is that of change - and not always change as forecast. The technical reality is one of ever more rapid technological change: the “smart grid”, distributed power generation and, on the far horizon, advanced techniques for energy storage that will change the way that grids are conceived and operated.
Any attempt to see the next few years as “just” about the technology or economics of energy supply is likely to result in a highly skewed vision for the future – and one that will lead energy providers into serious difficulty.
Change is also not taking place in a vacuum; it is at least in part the answer to a global political demand for cleaner, more secure environmentally friendly energy supply. That demand, in turn, has found expression in a series of policy targets as well as financial incentives and penalties that are themselves changing the fundamental economics underpinning electricity transmission and distribution.
Effect of change is making itself felt in a variety of ways: Short-term
Changing the balance in terms of energy supply, making new (renewable) sources more competitive, preferable even, for suppliers looking to minimise costs however where energy is drawn from is not neutral: electricity generated from fossil fuels such as coal has a very different profile in terms of its dispatchability and its ability to supply baseload or peak.
Changing the underlying economics of power generation and transmission makes investors face difficult new choices as to the balance that they will strike in future between different types of energy; as well as the additional technical issues on the grid itself.
Intermittent energy supplies, such as those generated from wind and solar power can create grid instabilities, leading to over or under-supply at certain critical points in time. This is both technical issue, requiring a solution that can handle sudden and unexpected power surges (or shortages) as well as an economic and political issue. Since it is exacerbated by the very government policies (priority dispatch for renewables, for instance) designed to encourage a shift in energy usage on the part of suppliers.
Cange from all directions
Through natural technological advance, through political pressure and through economic rule setting.
At the same time, the pace and nature of change cannot be divorced from the interaction of these factors. The political and the economic are leading directly to technical challenges that utilities and energy providers need to fix either through new operational rules or through the implementation of yet more new technology within their systems.
These insights are drawn from the upcoming Future of Transmission & Distribution Report which covers them in more detail.