Why upping the ante on our energy system is a team sport
The scale, pace and depth of change underway across our energy system was discussed in detail at Scottish Renewables’ Storage and Systems Conference in Glasgow last week.
The bottom line? Industry has much to grapple with.
The way the system is operated is changing rapidly.
The integration of new flexibility solutions provides challenges as well as opportunities.
Uncertainty around future revenue streams remains rife.
Xero Energy’s Marc Smeed emphasised the scale of one of these changes: the DSO transition.
While running through the Energy Networks Association's Open Networks project – which is driving the shift to more dynamic distribution system operators – Marc challenged delegates to think about who is best to deliver the system we want to see.
Both Ofgem’s Andy Burgess and Scottish Government speaker Neal Rafferty discussed ambitious strategies, reforms of charging systems and, fundamentally, the need to ensure that changes to the energy system both reach and protect the most vulnerable consumers.
Claire Spedding from National Grid told delegates how the System Operator is preparing for this transition by reforming its service market and managing the network more actively on a day to day basis, saying:
“While the market balances supply and demand very well, operability considerations like frequency and voltage control need to be managed more carefully.
"Over the past couple of years we have found ourselves on some days repositioning over half the market".
It used to be on average less than 5%.
Following a broad panel debate on the innovation landscape, the focus shifted to security of supply.
Tom Edwards of Cornwall Insight and Sandbag’s Charles Moore both discussed the flagship security of supply mechanism – the Capacity Market.
Charles presented the findings of a recent Sandbag’s recent ‘Coal to Clean’ report, which focussed on the UK’s coal phase-out.
The report revealed that the ‘gas bridge’ is unlikely to materialise, and the 2025 coal phase-out can be completed without building new large gas plants.
Tom’s presentation explored the challenges presented by better integrating renewables into the Capacity Market, concluding confidence in the mechanism has been shaken due to low clearing prices and market volatility.
It might deliver security of supply, but certainly not security of revenue.
The final session of the day considered revenue opportunities in more detail.
Paul Reynolds from Everoze talked tactics for improving the battery storage business case.
Flexitricity’s Andy Lowe built on that theme by discussing the balancing mechanism market and stressing that the move towards a more flexible system has in fact already happened.
Louise Dalton from CMS rounded off the day by considering the role of corporate PPAs in balancing out some of the short-term revenue risk with longer term contracts.
But it was perhaps Innogy’s Nicki Percival who best summed up the challenges facing the industry.