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Current± Predicts: The energy transition in 2021, part twelve

Image: Getty.

Image: Getty.

Smarter Grid Solutions

The energy landscape in 2020

From Brent Marshall, CEO at Smarter Grid Solutions

“The progress we have seen in 2020 is enough to give a greater sense of optimism in 2021. The goal of a clean energy system that works for all customers and tackles the climate emergency head-on is a worthy mission.

“Advances we have seen in global policy, technology and corporate responsibility give a clear indicator that net zero carbon emission targets are being taken seriously but we do need to continue on this trajectory and be sure not to lose momentum. We expect the diversity of Distributed Energy Resources (DER) technologies and business models to grow in 2021 as we continue to innovate for a future-proof smart, flexible, clean energy system.”

Policy and regulation

From Graham Ault, executive director at Smarter Grid Solutions

“Throughout 2020 we have seen significant strides forward in policy commitments from China, the incoming Biden administration in the US, the Clean Energy Package in the EU and a new Energy White Paper in the UK. With focus turning to COP26 in Glasgow in 2021 we expect the political world to heighten attention on zero carbon energy.

“We now expect attention to turn to the speed and quality of clean and smart energy rollout as the evidence shows the best ways to deliver renewable energy into an optimal ‘whole system’. This will include implementing investment, incentive, stimulus, market and system change orders that reflect the growing climate urgency.

“In the world of distributed energy, we expect that the market will continue opening up to much more customers and flexible DER, recognising the need for cost effective DER integration solutions that properly value and harness their contribution to an efficient, clean, reliable energy system.”

Corporate responsibility and green investment

From Stuart McGhie, Finance director at Smarter Grid Solutions

“Despite the constraining effects of COVID, there has been a step up in investment in green tech and clean energy assets. Throughout this year, most areas of the clean energy sector have continued to drive investment and deployment forward.

“In the coming year, we expect to see even more businesses set carbon neutral goals, with carbon performance becoming as important for some companies as profit and loss (P&L) performance. Transparency to the investment and audit community will become increasingly important, with fossil investments and operations being categorised more negatively through time.

“More widely, we saw a lot of consolidation and investment into smart, flexible energy in 2020 whether in battery storage, EV charging, market platforms, demand response aggregation, the ‘home energy’ domain or microgrid consortia. This showcases the value in flexible distributed energy and we expect for this uptake to continue in 2021.”

Technology

From Euan Davidson, CTO at Smarter Grid Solutions

“There may have been some delays to either creating or deploying new solutions due to the COVID-19 pandemic, however this has not materially changed the overall acceleration in new clean energy technologies development and deployment. Analyst reporting throughout the year showed continued strong progress with clean energy capacity additions but with some headwinds on installation access and funding at the smaller scale.

“Specifically, there has been a real uplift in opportunities for microgrids, as deployments for resiliency, rural community development and energy access push forward. There seems to have been a growing recognition of enabling the technology to integrate with grid connected modes while always being ready for outage events.

“2020 also saw new business models and actors emerge, and it will be interesting to see the progress of Virtual Power Plant (VPPs with diverse renewables, heat, EV charging as well as conventional demand response), Energy as a Service (EaaS) and other new models of financing, building and operating DER.

“Each of these developments bring a set of new participants in the energy system and market which we expect to pick up speed in the coming years.”

Flexibility markets

From Alan Gooding, executive director at Smarter Grid Solutions

“We expect increasing confidence in flexibility services from DER due to the increasing abilities to secure the system, resolve the conflicts in service delivery and secure contingencies.

“In the coming years, pressure from the success of flexibility services will drive distribution utilities to fully embrace Flexible (Inter)Connections but in order to do this now requires further innovation on network pricing, market mechanisms, data flows and forecasts.

“It will also be interesting to observe the progress of FERC Orders 841 and 2222 in the US as the canaries for all things DER, flexibility, Non-Wires Alternative (NWA) and Demand Response (DR). There are significant challenges of coordinating grid management with markets and attention is turning to resolving those issues to ensure the continued growth and contribution from DER in many countries.”

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