IRENA’s winning recipe for renewable energy integration. By Pamela Largue.

Innovation is powering the energy transformation and more renewables technology is being implemented as the world combats climate change and air pollution.

This article was originally published in Smart Energy International Issue 5-2020.
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This article delves into the International Renewable Energy Agency (IRENA) report, The Innovation Landscape for a Renewables Powered Future, which provides a holistic roadmap and systemic approach to innovation.

The roadmap focuses on enabling technologies, business models, market design and system operation within the context of three ongoing disruptive trends in the power sector, digitalisation, decentralisation and electrification.

Policymakers and systems operators can apply various combinations of these solutions to greater or lesser degrees to drive assimilation of renewable energy into current systems, and unlock system flexibility for a high share of Variable Renewable Energy (VRE) penetration.

The sheer diversity of solutions, coupled with differences between local energy systems, may make for a confusing picture for decision makers, who may struggle to identify and assess the best solutions for each country or context.

It’s a challenge to adapt a range of measures to maintain an affordable and reliable balance of supply and demand, while ensuring deployed solutions increase the system flexibility needed to integrate high shares of solar and wind power.

The amount of flexibility is usually proportional to the investment made and solutions criteria will vary based on the particular power system and geographical location. It all comes down to successfully navigating a matrix of risks, challenges, system costs and benefits, not always an easy task when there is a constant shift in the innovation landscape, as well as in the roles and responsibilities of the actors involved.

According to the IRENA report, there are four innovation dimensions that make up the transformative innovation landscape.

Enabling technologies. These include technologies that enable greater flexibility in power systems and facilitate the integration of renewable energy. Conventional generation technologies are being modernised to become more flexible and the use of battery storage, demand-side management and digital technologies are creating new opportunities for new applications that unlock the system’s flexibility. Electrification of end-use sectors is emerging as a market for renewables, but could also provide additional ways of flexing demand.

Business models. Innovative business models are key to monetising the new value created by these technologies and so enable their uptake. At the consumer end, numerous innovative business models are emerging with the deployment of DERs, alongside innovative schemes that enable renewable electricity supply in places with limited options, such as off-grid or densely populated areas.

Market design. Adapting market design to the changing paradigm – towards low-carbon power systems with high shares of VRE – is crucial for enabling value creation and adequate revenue streams, as detailed in previous IRENA analysis (IRENA, 2017b). Innovation in both wholesale and retail markets is needed to fully unlock the flexibility potential in the power system.

System operation. With new technologies and sound market design in place, innovations in system operation are needed and are emerging in response to the integration of higher shares of VRE in the grid. These include innovations that accommodate uncertainty and innovative operation of the system to integrate DERs.

“Specific Innovations within the four dimensions are boosting energy transformation,” says Dolf Gielen, director of innovation & technology, IRENA.

According to Gielen, flexibility comes from combining the 30 innovations. “It’s about deploying innovation together with best practice, an even stronger approach when combined into solutions”. In other words: tech + new market design + new business model = accelerated deployment of flexibility solutions.”

The report identifies three main trends of the energy transition, which are directly spurring the accelerated deployment of innovation. These trends include: more decentralised renewable generation, more electrification and more digitalisation to make power systems work.

Electrification and the integrated grid

Electrification with renewable power is resulting in new electricity loads (e.g. electric vehicles [EVs], heat pumps, electric boilers) being connected to power systems at larger scale, mainly at the distribution level. These loads must be managed to minimise strain on the grid and corresponding power infrastructure.

With the increased integration of wind and solar power, costs have decreased significantly. This is allowing an expansion in terms of use and application, allowing AI and IoT to play a major role in successful integration, but also monitoring and control through advancing digital solutions. Says Mark McGranaghan, vice president Innovation Electric Power Research Institute: “The electrification challenge is providing opportunities in terms of flexibility. Clean power must be used to decarbonise other sectors such as transportation, which is at the top of the list.”

Decentralisation

Rooftop solar PV, micro wind turbines, behind-the-meter (BtM) battery energy storage systems, heat pumps and plug-in EVs are becoming more popular providing greater opportunities for flexibility.

Michele Governatori, professor of Environmental Economics and Resource Economics, University of Suor Orsola Benincasa, explains how decentralisation is becoming especially popular in terms of the increased implementation of energy cooperatives or communities (such as the Citizen Energy Community and the Renewable Energy Community) coupled with the introduction of useful peer-peer trading that comes with them.

These communities aim to engage local consumers and generators while exploiting local storage, exchange, supply, aggregation and services. Generation embedded in communities allows those communities to act as dispatchers, which in turn, opens up to a different scope of network operators.

These energy communities see a variety of available energy services, such as storage, grid integration, monitoring and management for network operators and financial services.

Governatori explains: “In terms of virtual energy communities and peer -to-peer trading, if you continue to use the local network, regulation allows for some savings when energy is produced and consumed within the same community.

“It makes sense costwise, to not send the energy to external networks, if it’s been used in the same community it’s produced in”.

Peer-to-peer energy trading makes the most sense when the energy community is virtual, as you are able to avoid losses and paying the variable part of network tariffs.

Digitalisation

This applies to increased ubiquity and application of digital monitoring and control technologies in the power generation and transmission domains. The systems are penetrating deeper into power systems with wider use of smart meters and sensors, the Internet of Things (IoT), data and artificial intelligence.

According to Maher Chebbo, co-chair of the ETIP SNET Digital Energy, digitalisation and industrial IoT is a fast growing sector, resulting from growth in the distributed energy and smart energy sectors.

Currently, there is a great deal of investment into digitalisation across the whole power value chain and energy conversion cycle.

Chebbo explains that distributed energy is transforming the energy sector, as customers are placed at the centre of the picture rather than being at the end of the line.

These trends are resulting in the collection of more data from infrastructure, data which is used for effective predictive maintenance, as well as understanding and predicting what the customer wants and how best to serve them.

Chebbo also mentions the vital role of digital twins allowing for more accurate simulations, which ensure a more reliable and healthy system. He states: “Digital twins [implemented] across 28 EU member states is a game changer as we will have an [exact] picture of the infrastructure in Europe in data.

“You could, if you want to, predict what the future of that energy picture is or what the future of the equipment is, we could then run the digital twin model for the EU region.” The digital twin allows for a more robust system, through the integration of cybersecurity IIoT, inspections and asset performance, digital workers, and distributed energy resources on the grid.

There is indeed a great deal of work which is still needed to integrate all systems while heightening the integrity of the system, managing prosumers and stabilising the grid. This has to be done in light of ensuring democratised access, which is where digitalisation becomes pivotal.

Chebbo explains that ease-of-use is key for users across the EU, who need access to any supplier and service, equipped to order renewable, clean energy online.

E-mobility is one area with a digital impact, as connecting EVs, parking, batteries, charging and driving will generate a massive amount of data, which needs to be collected and processed.

There are many variables when it comes to driving VRE uptake through an enabling innovation landscape.

There is no silver bullet. However, a commitment to achieve energy transformation through embracing and fostering innovation can and will ensure a viable future in a competitive industry where change and disruption are the norm.