Grid Diversity: The Key to Meeting Europe’s Carbon Goals

Published: Mon 09 May 2016
A blog entry by Haresh Patel

Contributed by:

Haresh Patel
CEO
Mercatus Inc.

Haresh Patel's Blog

As European nations work to achieve ambitious energy and climate change goals, diverse grids are proving to be crucial in reducing emissions.

 

Day by day, it is becoming increasingly apparent that in order to build a clean electric grid, having a diverse portfolio of renewable energy resources is crucial. Having variety is essential in keeping the supply-demand balance of the grid steady, otherwise upset by large additions of non-diversified, intermittent power sources. When the latter occurs, the grid must use dirty coal or gas as backup power. These dirty resources raise a grid’s emissions intensity, creating more pollution. Alternatively, having a variety of renewable power sources helps regulate these imbalances. Each renewable technology provides different attributes to the grid, and despite their purpose, having range is essential to ensure future grids are stable and clean. As European nations work towards ambitious energy and climate goals, targeting to consume 27% of their total energy from renewable sources by 2030, what best practices can they learn from one another and the U.S. to ensure success?

 

The State of California is a good place to start, where economics and procurement practices are driving the construction of new power plants that mostly fall into one of three categories; wind, solar PV, and natural gas. However, California’s procurement is leaving out dozens of other energy technologies like storage, biomass, hydro and geothermal. According to California Energy Commission data, gas generation is growing quickly with solar and wind generation in the state. Many of the new gas plants are combustion turbines generally used for peaking or load following because of their low capacity factor. This over procurement of intermittent and gas power sources has led to the infamous duck curve which currently uses the new gas plants to ramp up quickly at the end of the day to maintain a balanced load. Studies have shown if California continues down this path, it could actually lead to higher emissions than a portfolio with more renewable diversity.

 

Germany, one of the leaders of renewable energy development in the E.U., is familiar with this problem as well. Cue major losses from utility giants RWE and E.ON. Germany's push to decommission its nuclear plants led the country to swap their nuclear generation for lignite coal. In November 2013, Germany had fired up its first coal-fired power plant in eight years and 10 new coal plants had either gone into service or were slated to go into service in 2013 and 2014. The EU Observer reported that while Germany has more than doubled its share of renewables over the last decade (from mostly intermittent sources), Germany is likely to miss its 2020 target to reduce its greenhouse gas emissions by 40 percent.

 

As more nations move towards a low carbon economy, it’s clear that grid diversity is crucial to avoiding the same errors made in Germany or California. However, the reality of distributed generation is becoming more and more complicated, bringing about previously unforeseen need for strategic and operational challenges. So how can power producers tasked to manage this transition into today’s transforming energy market better prepare? Implementing an energy investment management system helps power producers to better identify risks, eliminate inefficiencies and gain project visibility. In addition, this technology streamlines project management, simplifies quality control and compliance and increases data transparency. Not only will these operational successes assist power producers in their efforts build a balanced and clean grid, but also attract investor trust. The success of diverse and profitable grids is crucial in avoiding growing emissions, and ultimately achieving power producer’s goals of a reduced carbon future.