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Current± Predicts: The energy transition in 2020, part four

Image: National Grid.

Image: National Grid.

Current±’s series of predictions for 2020 continues, this time featuring insight from Flexitricity founder Alastair Martin and redT commercial director Ed Porter.

Alastair Martin, founder, Flexitricity

National Grid will develop a real taste for using decentralised energy assets in the Balancing Mechanism

Flexible energy users such as district energy centres and greenhouses are now regularly accessed by National Grid to help balance supply and demand. Ever sharper auction processes for alternatives like frequency response will allow batteries to dip in and out, and an expanding range of commercial customers will join through BM Wider Access. Together with changes to traditional ancillary services like Short Term Operating Reserve, these factors all lead to one result: an ad-hoc market, perfect for ad-hoc resources.

The implications of turning DNOs into Distribution System Operators will finally become clear

A DSO is market-neutral, but not at all neutral to security and quality of supply. DSOs won’t compete with their own customers. They will lose their historical devotion to fit-and-forget copper assets and will start making proper use of demand-side flexibility. They’ll be tough clients, with high standards for performance. But their needs won’t look anything like National Grid ESO’s needs; distribution system operation is different. In 2020, the DSOs will figure out how to buy what they need from the best resource, whether copper or customer.

Electric vehicles will give everyone a fright

2019 saw a swirling fog of projections, draft standards and policy announcements. In 2020 we will admit that the customer cares naught for such things, and will do what they want with their electric vehicles. “Granny charging” from the socket in the garage – which is enough for most people most of the time – can’t be prevented by government, regulator, suppliers or networks. Most customers can fit fast chargers without telling anyone at all. When the networks get their heads around this, they’ll realise that it’s time to engage. There’s value in flexibility, and buying it is better than bullying the customer.

Ed Porter, commercial director, RedT

Yet more negative pricing

We believe that negative system pricing will grow, linked to limited flexibility in thermal generation and low levels of renewable turn down, the latter arising from operators not recognising the market opportunity turn down controls present, and, in some cases, subsidies still paying out. This creates a growing market for energy storage in 2020.

Solar growth

At the same time, we anticipate a growth in PV, with behind the meter installs soaring as end customers lock in comfortable 10-20% IRR for their projects – even better than your typical 8% property investment yield.

2020: The year of storage

These two key themes are creating structural changes in our energy markets and 2020 will very much be the year of storage. I hope that I’m speaking to you next December, looking back on a host of new distributed solar and storage projects across the EU (which I hope we will still be part of).


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