Renewables have traditionally been associated with grid instability due to their dependence on the weather, but the evolving energy landscape has created new opportunities to make using them in grid systems viable again, says Accenture in its report, Capturing Value in Managing Energy Flexibility.
Key observations include:
Batteries are unlocking value pools
Batteries can help reinforce energy security and reduce supply dependency on the grid by delivering stored energy during periods where there are disruptions. This would help mitigate the effects of increased variability from the use of renewables. From a commercialisation perspective, batteries also allow for the collection of power when it is cheap and available, and the selling or use when it is scarce and expensive. Depending on the pace of electric vehicle adoption, some markets could see vehicles become the main provider of grid services.
The rise of the Prosumer is displacing traditional generation players
The increase in renewable sources, paired with the emergence of new connected technologies, has led to the emergence of the prosumer, a consumer group including both corporate and residential consumers, that both produces and consumes electricity. They are disrupting the market by displacing traditional generation players - either by procuring their renewable energy through power purchasing agreements (PPAs) with independent power producers (IPP) or building distributed energy resources (DER) and installing battery storage directly on their sites. For instance, Amazon is deploying large-scale solar installations across its fulfilment centres in the U.S. and is planning to build a wind farm in Texas.
Traditional business models are being re-assessed
Enabled by the growth of digital technologies, new entrants to the electricity market are transforming the traditional value chain. With consumers increasingly shifting towards renewable power and self-generation, start-ups are rolling out innovative models and services such as peer-to-peer network platforms to meet prosumer needs. This has helped drive new partnerships and investments between new entrants and existing players.
However, given the relative immaturity and constant evolution of the various markets, energy players are taking a cautious approach and splitting their investments across multiple baskets as they assess how emerging technologies will redefine their services.
Credit: Accenture