Innovation has been a key driving force as digitalisation has started to take root in the energy system. The ‘smarts’ – smart metering, smart grid, smart cities – and the transformation to a decentralised variable renewable energies-based system are demanding new levels of innovation across multiple fronts including technologies, markets, business models and operations.
Much of the push behind innovation has come from young start-ups and new entrants from other sectors as well as the traditional vendors. But the utilities themselves as in most cases the end-users, also are major contributors. And all will continue to be as the challenges grow in integrating increasing levels of renewables both at utility scale and distributed among prosumers.
With the wide variety of projects under way in different markets across the world, what are some of these innovations? In a new study IRENA identifies 30 key innovations in projects such as Tesla’s ‘megabattery’ in South Australia, probabilistic weather and power forecasting in Germany, Orkney’s ‘Surf ‘n’ Turf’ hydrogen conversion and the blockchain-based Brooklyn Microgrid in New York..
“Innovation is creating an energy transformation that is technically feasible and economically attractive,” says IRENA Director-General Adnan Z. Amin, referencing Europe’s achievement of a close to 15% variable renewables share in annual electricity generation, the highest levels in power systems globally. “Innovation is the engine powering the energy transition and the global pace of innovation is accelerating.”
Ultimately the key to integrating high levels of renewables, and variable wind and solar in particular, is system flexibility.
In the report IRENA argues that innovations are not implemented in isolation but that innovative solutions come from the synergies of the different innovations across the various dimensions. Emerging technologies allow new ways to operate the system while appropriate market designs, which are important to achieve policy objectives, enable new business models.
With this, the 30 innovations are mapped into 11 solutions to optimise the renewable output and unlock that system flexibility. Innovation examples across the four dimensions include as enabling technologies (e.g. batteries, EV, blockchain), business models (e.g. energy-as-a-service, aggregators), market design (e.g. time-of-use tariffs) and system operation (e.g. empowerment of DSO).
The solutions, some drawing on as many as 10 of the innovations, are:
Supply side solutions
Solution I: Decreasing variable renewables generation uncertainty with advanced weather forecasting
Solution II: Flexible generation to accommodate variability
Solution III: Interconnections and regional markets as flexibility providers
Solution IV: Matching renewable energy generation and demand over large distances with supergrids
Solution V: Large-scale storage and new grid operation to defer grid reinforcements investments
Demand side solutions
Solution VI: Distributed energy resources providing services to the grid
Solution VII: Demand side management
Solution VIII: Renewable energy mini-grids providing services to the main grid
Solution IX: Optimising distribution system operation with distributed energy resources
System-wide storage solutions
Solution X: Utility-scale battery solutions
Solution XI: Power-to-hydrogen/heat solutions.
Each of these solutions have different levels of complexity in their implementation and address different needs in terms of flexibility, based on the specificities of the system, IRENA notes. For example, most of the supply side and grid solutions address short term flexibility needs for real-time operations, while the demand side solutions address up to hours and the system-wide storage up to months.
Factors suggested to take into account when implementing solutions in any context include population density, degree of seasonality, interconnection possibilities, spatial proximity of renewable supply to the demand centres and the time match between the supply and demand. However, two of them, decreasing renewable uncertainty with advanced forecasting and demand side management, can enable better integration and unlock flexibility – and should be considered – in almost all contexts.
IRENA also notes that the innovations and solutions come with challenges, in particular on the regulatory front, but others include complexities in their implementation and the investments required.
IRENA’s estimate for the investments necessary in flexibility options for the integration of a high share of variable renewables globally is up to $18trn up to 2050, which is similar to the investments required in the additional renewable technologies themselves.