Network requirements for a 2050 net zero carbon economy

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Significant expansion and upgrading of transmission and distribution (T&D) networks is necessitated in the move to large scale clean electrification.

With a new plan for achievement of a net zero carbon economy by 2050 set out by leaders of major global energy producers and users in the Energy Transitions Commission envisaging wind and solar increasing to over 75% of generation, the question is what additional spending is required on the networks.

As the backbone of the energy system the transmission and distribution networks obviously need to undergo significant expansion and upgrading and automation to support this growing renewables penetration.

The Commission points in its report to “several critical drivers” of growing network needs. These include mass electrification across sectors including new use cases such as electric vehicles and heat pumps, the need for long distance networks to connect remote resources to demand centres and the enablement of flexibility.

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With these, network threats such as cybersecurity and storm resilience also will need to be managed.

Together, these trends will have important implications for the shape of T&D network costs, some potentially increasing the cost per MWh but with others offsetting impacts, says the Commission.

For example, requirements for infrastructure to connect remotely located wind and solar resources to load centres could add to transmission system costs. New electrified use cases, such as road transport electrification, and needs for additional capacity for peak demand load increase may impose additional costs at the distribution level.

Conversely, digitalisation upgrades and distributed generation, in particular co-located small scale solar and storage, which initially could raise costs, should in the long run see them offset by the benefits of smarter and more digital and flexible networks.

T&D investments

The Commission says that for the power networks to rapidly expand, annual investments in T&D should rise rapidly from $300 billion to $700 billion per year by 2030 and thereafter further to over $1 trillion per year and up to $36 trillion cumulatively.

Thus it is a critical priority to develop T&D networks as cost-effectively as possible, the Commission states.

Among the recommendations is that distributors should develop an active distribution system operator capability to optimise energy procurement and manage flexibility.

Another is that investment strategies should anticipate future demand growth rather than respond to it and typically should be from 3-5 years ahead in order to enable new demand and generation capacity to come online with no bottlenecks.

There also is a need for planning and permitting processes and integrated siting strategies that can support rapid development of renewables while addressing community and other concerns.

The Commission notes that the T&D investment costs may vary greatly according to the local conditions and that it is essential these are factored into plans for large scale renewables expansion.