Spreading Innovation for the Power Sector Transformation Globally Amsterdam, 3 October 2017 1
About IRENA Inter-governmental agency established in 2011 Headquarters in Abu Dhabi, UAE IRENA Innovation and Technology Centre Bonn, Germany Permanent Observer to the United Nations New York 152 Members 28 States in Accession Mandate: Assist countries to accelerate renewable energy deployment
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Renewable power already has a strong business case Solar Auctions Results Wind Turbines -30-40% Renewable Energy Auctions Analyzing 2016 Solar module -80%
but materialising its potential require additional efforts in system integration The power sector paradigm changes, creating challenges to integrate high Generation becomes more decentralized The flow of electricity becomes bi-directional at certain moments in time The role of consumers changes, having an increasingly active role share of variable renewable energy in the system The traditional baseload generation concept disappears The system requires flexibility 5
No lack of innovations but what is relevant for the local context? We need to map and understand the implications of these innovations for the power sector Value spatial complementarities - interconnections Electrification of other sectors Electric Vehicles Storage Encourage Flexibility Value complementarities in VRE Decentralized system System Operation Market regulation RE Tech. Enabling Infrastructure Business Models Digitalization - IoT Blockchain Aggregators- VPP Platform business model
Emerging Innovations Power Sector Transformation E-mobility Storage and Electric Vehicles Smart Charging (mobile storage) Provide flexibility to the grid Grid Services: Primary and secondary reserves: Enhanced Frequency Response Frequency Containment Reserve Frequency Restoration Reserve Energy Shifting Behind-the-meter: Solar self consumption Community Storage Increased Power Quality Peak shaving Grid to Vehicle (G2V): Load management: peak shifting Vehicle to Grid (V2G): Primary and secondary reserves Other ancillary services Energy shifting Vehicle to Home (V2H): Solar self consumption Increased Power Quality Peak shaving
But what s needed to implement e-mobility projects? new roles for stakeholders E-mobility and smart charging requires the participation of many actors with coordinated responsibilities and roles, contributing to the creation of an e-mobility market, integrated with the electricity market DSO have to balance fluctuating power requests and injections from decentralised renewable generation. Energy supply retails seek to use smart charging, as a measure to support their power plants portfolio strategy, and as a possible revenue stream coming from ancillary services sold to the DSO Source: Cired Paper 2011- Charging electric vehicles in a liberalized electricity market E-Mobility customers must be engaged Charging Spot Operators need considering charging requests from consumers and optimizing their costs based on electricity market signals E-Mobility Service Provider requests charging access following requests by their e- mobility customers. 8
What else is needed? Adapting regulation Regulatory adaptations need to take place along the entire supply chain of the power sector Retail market: KEY: Understand customer behaviour and create awareness of the possibilities to use load management Customer support and empowerment, through efficient price signals or other load management schemes Distribution Incentivise distribution system operators (DSOs) and electric mobility market participants to invest in smart charging solutions and services, including innovative grid fees, ICT infrastructure financing models, and others Wholesale market The wholesale processes should be adjusted, so that customers can offer their flexibility to the market, both in terms of stored energy and control reserve services. Aggregators could play an important role here 9
One more innovation Blockchain: No middleman By promoting P2P trading and though emerging cryptocurrencies, blockchain incentivizes growth in decentralized generation Through smart contracts, blockchain makes distributed grid management easier Prosumers generate power beyond their needs and feed it into the grid through a blockchain-enabled e meter The flow of electricity is automatically encoded in the blockchain Algorithms match buyers and sellers in real time based on preferences and encode smart contracts into blockchain Smart contracts execute when electricity is delivered, transferring payment in cryptocurrency from buyer to seller Other nodes in the network verify the transactions Applied to larger interconnected grids, might lead to: No need for retailers No need for system operators - If smart contracts secure frequency and voltage control as well as balancing the grid system as a whole 10
What s needed to implement blockchain in power sector? Hardware Smart Grid, Smart Metering Multiple Blocks producers and consumers Traditional processing platforms Software Blockchain support software Smart Contracts and Cloud platform Communication protocol Agree and develop common interoperable standards along with data storage and identity, smart contract and record ledger 11
Continuous approach to build an innovation network for energy transition 1 st Innovation Landscape Report Innovation Week 2016 Innovation week 2018 Three days conference: 200+ experts from public and private sector Discussions across the complete innovation life cycle, from R&D to commercialization Based on real-life case studies on emerging nontechnology innovations Identification of replicable and implementable innovations Analysis of case studies, lessons learnt Track the energy transformation, monitor the progress, map new innovations We invite you to engage!
Spreading Innovation for the Power Sector Transformation Globally Today s session objective: Better understand the promising innovations that aid the power sector transformation and how this innovations can be replicated and scaled up in other geographical regions in order to accelerate the energy transition
We invite you to engage! Dolf Gielen: dgielen@irena.org Francisco Boshell: fboshell@irena.org Arina Anisie: aanisie@irena.org www.irena.org 14
Power Sector Transformation at IRENA Market design, regulation, business models Just released Report: Adapting electricity market design to high shares of VRE Scaling up Variable Renewable Power: The role of grid codes Innovation landscape report for the power sector transformation (Q1 2018) Long term, least cost capacity expansion plan Best practices in longterm scenario-based modelling report, Planning for the renewable future Recommendations are to be discussed at a Latin American regional workshop (2017 Q3) Unit commitment and economic dispatch Production cost modeling Developing flexibility assessment to be applied to 5 REmap countries Developing a global storage valuation framework, to assess the value of storage in different markets Find the optimal pathway for power sector transformation Grid studies Technical network studies A guide for VRE integration studies is upcoming (2017 Q2) Technical assessments for larger systems
Power sector transformation is ongoing Renewables account for more than half of annual power generation capacity additions since 2012 Renewable energy share in power generation growing at 0.7% per year 16
INNOVATION is needed to create new opportunities in the new power sector paradigm, to integrate higher shares of renewables in the systems The new paradigm creates new opportunities Technology innovation must be accompanied by innovation in infrastructure, system operation, business models and regulation 17
Innovation Landscape for Power Sector Transformation Systemic Innovation is needed for a Renewable Power Sector Challenges to integrate high share of VRE Generation technologies & Enabling Infrastructure Enable the integration of high share of VRE Business models Private sector identifying new business opportunities Market regulations How to monetize the value created? New ways to operate the system
Key requirements for enabling smart charging Technical Requirements Hardware Electric vehicles (with V2G capabilities) Public recharging infrastructure Smart meters connecting EV with charging points Software Smart charging services (power flow management, ICT systems to facilitate intelligent exchange of information, advance algorithms for local integration with distributed local sources) Communication protocol Common interoperable standards (both at physical and ICT layers) 19
One more innovation - Blockchain Blockchain: digital transaction technology Blockchain is a shared, decentralized and distributed digital ledger which helps facilitate the process of recording all transactions. All network participants act as witnesses and verify each event or transaction between other network participants. is decentralised, without the need of a central coordinating authority gives a clear and irrefutable track of what is happening, leading to high transparency and trust is very safe, allowing for securely storing data is fair, executing smart contracts in peer-to-peer networks. Blockchain is currently most developed in the financial sector
One more innovation - Blockchain Blockchain: digital transaction technology These attributes make blockchain technology a potentially powerful catalyst within the shifting energy landscape as: generation becomes increasingly decentralised; peer-to-peer trading becomes more widespread; customers begin to seek energy from more renewable, local sources; processes become more and more digitized, automated and optimized; and grids become increasingly smart. By promoting P2P trading and though emerging cryptocurrencies, blockchain incentivizes growth in decentralized generation Through smart contracts, blockchain makes distributed grid management easier