Renewables developers must be co-locating with other technologies or turning to aggregators to offset the serious disruption caused by market price volatility.
That is the view of Solarcentury chief Frans van den Heuvel, who said that business cases underlying renewable energy developments would be at serious risk if developers were not mitigating for volatility on the wholesale market.
“If you don’t play a proactive role yourself then you had better find someone that does, whether that’s an aggregator or so, because you need to be managing these assets in the right way,” he said.
Recent periods of high renewable penetration in the UK market, principally driven by high quantities of wind generation, have created lengthy periods of volatile pricing. Negative system prices have been experienced periodically throughout this summer in what constitutes a relatively new phenomenon for the UK power market.
There is too the risk that higher quantities of renewables provide a drag on the wholesale price itself, effectively cannibalising further renewable power from being built.
Van den Heuvel insists that the power market’s evolution in this way has forced developers to need a more comprehensive strategy for asset management, whether it’s by adding a battery or co-locating with other generation technologies.
But David Edwards, Solarcentury’s strategy director, is confident that market price volatility and renewables cannibalisation will only create uncertainty in the short-term.
“Medium- to long-term it’s going to level out because you can do so much more with aggregation, demand-side management and storage than most people think, even within the sector. Plus, if you have systemically lower prices that’s going to attract demand, and the industry might move around that,” Edwards said.