Energy market design improving grid resilience

5/9/2019

In the past decade, the global energy landscape has changed beyond all recognition. The popularity of renewable energy sources is growing rapidly.

The culmination of grid modernisation, social focus on environmental impact from energy generation, technological advancement in the renewable energy generation and the economics balance shifting towards renewables has given rise to the Energy Transition movement. This movement is being backed by new remits for distribution operators to allow, amongst other things, more green and distributed energy to be integrated into the grid. 

The introduction of renewable energy or more importantly the rise of omnidirectional energy supply (for example Atlantic Power Exchange) means that the grid is more decentralised and dynamic. In this new remit requires our grids to be more sophisticated, intelligent, connected, resilience and reliable. 

Faced with ever-increasing challenges, such as constant value chain interruptions, dynamic and uncertain energy prices, frequent extreme weather condition, increasing encroachment of social opinion into the energy markets, and technological threats, many companies are looking to technology for solutions. 

The New Reliability 

Power supply interruption is an ever-present risk in any energy ecosystem and business. The common theme in risk mitigation barriers is the grid, either ageing or immature grid. For instance, in the Indian market, 50% of the electricity generated is wasted due to losses in the grid or power theft. This leads to over 200 million people not having access to electricity. Inversely, in the developed economies this may be considered an irrelevant concern due to grid maturity. 

Notwithstanding the significant investments in asset replacement and upgrades by the UK distribution network operators over the past decade has not improved the UK’s ageing grid health and reliability. Additionally, the grid design, which occurred many years ago is one directional. It is designed to deliver energy from fewer, larger and remote power stations to major population centres. 

A key requirement for the improved reliability and risk management is integrated and dynamic thinking about energy sourcing and consumption. Our energy management needs to be designed holistically understanding the current energy landscape and having the future power vision at its forefront. 

Grid digitisation, electrification of major economies, and energy transition are some of the disruptions which the global energy markets are facing. At the same time, new innovations drive new heights in the economic performance of energy assets. 

Energy Technology Mix 

Technological advancements such as digitisation, allow grid operators to manage a more efficient operation and achieve new levels of reliability. Advancement in analytics, AI, IOT and telemetry technologies not only improve operational optimisation and efficiency but allow energy asset to be more responsive to disruptions outlined above. 

Investing in new energy opportunities and distributed energy resources such as 

 

  • demand response; 
  • battery storage; 
  • smart grid technologies; 
  • fuel cells; 
  • combined heat and power;
  • and distributed solar  

 

can further the development of assets that are responsive, agile, and reliable. 

To enable integration and management of the assets in an efficient and optimal way, and respond to the markets, the energy corporations increasingly rely on more connectivity and technology. This introduces tremendous opportunity. 

One such opportunity is the energy market design. Most markets are exclusively the domain of energy corporations. They maintain firm barriers between the energy generators and retails to one side, and energy users (business and consumers) on the other side. The new energy paradigm which is accompanied the energy transition requires a more inclusive and intermixed market. 

This market allows not only the participation of producers and consumers but also prosumers. This market allows the consumers to choose their own energy source considering not only the economics of the energy but also other dimensions such as the social and environmental impact their source of energy has

At Atlantic Power Exchange, such future energy market is being created to allow the adoption of more Distributed Energy Resources, which improves energy resilience but give the energy users a real option in their energy source. It will allow direct interaction of energy producers and consumers directly.