Envision Digital Launches First Edition of EnView Study, Which Details that Way Forward to Create Flexible Grids for a Net-zero Carbon Future

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Envision Digital International Pte Ltd (“Envision Digital”), a global green tech and Artificial Intelligence of Things (AIoT) technology leader, is today publishing the first edition of “EnView”, the “point of view” of the Paris Smart Grid and Digital Grid competency centre on solving today’s sustainability challenges.

The EnView study concludes that if the electrification of energy and generation of green electricity is the clear path to decarbonisation in the short and medium-term, it also poses challenging issues to the energy system and notably to the power grids. However, technology can reconcile “green” and “growth”. Supported by the right systemic design and implementation fuelled by ongoing adoption of innovation, EnView even concludes that “green can fuel growth”.

Key findings and insights from the EnView study include:

  • Electrification is progressing fast with the adoption of electric heating and electromobility, as well as electrification of industrial processes. One million electric cars were sold in the world during the first half of 2020, (reaching 3.5 percent of global sales, out of which only 30 percent are hybrid), of which 400,000 are in Europe (reaching 6.7 percent of new car sales and 47 percent of hybrid), and 364,000 are in China (5 percent penetration with 20 percent hybrid). Heating is accounting for 40 percent of electrification in France, even if the rest of the world is still catching up (for instance Germany has only 5 percent electric heating).
  • Electricity is becoming greener and more renewable. In the US, residential photovoltaic (PV) capacity grew by more than 2,000 percent in the past 10 years, and wind power capacity in Europe increased by 27 percent between 2018 and 2019. In the past two decades, renewable power generation went from 18 percent to 26 percent of the global electricity mix, and it is expected to exceed 45 percent by 2040. As a comparison, Denmark’s renewable electricity mix, which mainly relies on wind, already consisted of 60 percent renewables in 2018. This is great news, as unlike fossil fuels, green electricity follows a clear “Moore’s law”, and is becoming more affordable, reinforcing its ability to power the development of nations and facilitate access to electricity, globally. Levelized costs of electricity (LCOE) for utility-scale solar PV has already dropped by 82 percent between 2000 and 2019, and by 39 percent for onshore wind.
  • However, if the energy transition is only focusing on green power generation, major challenges will hit traditional transmission and distribution grids. Grid costs will increase further beyond the current situation (grid costs already represent around 40 percent of electricity bills in many countries). Maintaining in real-time the balance between electricity supply and demand will become more challenging because of the intrinsic intermittent and non-controllable nature of wind and solar generation. Without proper solutions, this intermittency will lead to periods of negative electricity prices (producers are penalised for injecting electricity into the grid), and even to blackouts that can only be avoided by emergency measures. Such situations were recently faced in the UK when renewables’ share reached 70 percent as demand dropped, creating significant real-time balance challenges that could only be addressed by the emergency activation of schedulable plant curtailment.

In addition to the intermittency challenge, renewables are also turning some of the classic power generation concepts upside down, as classic energy customers (be they corporations or consumers) become producers for their own needs, for communities they have formed, or even for injecting electricity into the broader market. In Europe, household generation of electricity is expected to grow by ~1,800 percent by 2050, compared to 2015. This production is hard to predict and not controllable by the grid operators. Customers can take themselves suddenly “off the grid” and create a drop in demand or decide to inject when it may not be needed. This uncertainty is reinforced by the new electric vehicle (EV) charging behaviours that are only now establishing themselves and, thus, have not been historically witnessed and modelled over long periods of time.

In this context of intermittency and uncertainty, power grids risk becoming the bottleneck that slow down energy transition.

Technology is the way forward. Not only to “reconcile green and growth”, but to also ensure that “green fuels growth”. Smart electricity storage systems are profiting from reduced battery costs. With the cost of battery electricity storage systems (BESS) falling by 87 percent over the last 10 years and reaching $156/kWh in 2019, they can provide precious buffers in the system. However, they will not be enough to ensure a balance on their own. Smart technologies to ensure real-time supply, demand and storage management at various geographic and time levels are needed to support a permanent balance. CE Delft estimates that by 2050, about 83 percent of European households will provide demand response and energy storage. This requires data transparency (in conformity with data privacy regulations), powerful artificial intelligence optimisation “brains”, as well as reactive and resilient Internet of Things (IoT) control capabilities, at scale.

Overall system orchestration, across generation, transmission, distribution, storage and consumption of electricity, from real-time to long-term time horizons, from simple households to communities, regions, countries and continents, is only made possible by a digital platform combining Artificial Intelligence (AI) and IoT. AIoT technology is an enabler of virtual power plants that can deliver well-orchestrated microgrid or grid services.

To realise the benefits of these “smart” technologies and actually deliver the necessary flexibility, the whole framework needs to be adapted – from regulations, market mechanisms, flexibility compensation schemes down to data sharing rules. Existing flexibility mechanisms (such as capacity reserves markets in Europe) are reaching their limits as the share of renewable generation increases. Only a systemic approach to adjust the system can address this new reality.

To access the full EnView whitepaper, please visit: https://envision-digital.com/whitepaper-enview/

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