Further, they elaborate, on how the increasing electrification changes the energy landscape and argue how carbon capture technology is a suitable solution to meet decarbonization targets.

Read more content from Siemens Energy here

Watch the full video interview below.

This interview was filmed in November 2022 at Enlit Europe in Frankfurt, Germany

For more information, you can visit the Siemens Energy website here – www.siemens-energy.com/global/en/offerings/power-generation.html

The post Sector coupling and grid stabilization: energy transition essentials appeared first on Power Engineering International.

As a society, we need to reduce our energy demand and speed up the integration of renewables without negatively affecting industrial output.

This means switching to solid-state thermal batteries that harness surplus, or off-peak power, and available industrial heat for use on demand as secure, green steam and heat.

Read more content from ENERGYNEST here

Tamsin Lishman, Chief Revenue Office at ENERGYNEST, expands on what steps industries assessing feasible options can do when it comes to the decarbonization of industrial heat.

A long-term plan to disincentivize fossil fuel use and encourage more sustainable forms of power generation from businesses is urgently needed.

To achieve this, recognition of where our energy consumption goes is crucial.

Watch the full video interview below.

This interview was filmed in November 2022 at Enlit Europe in Frankfurt, Germany

For more information, you can visit the ENERGYNEST website here – www.energy-nest.com

The post How to decarbonize industrial heat and meet net-zero targets with thermal energy storage appeared first on Power Engineering International.

It was writer and socialite Zelda Fitzgerald – wife of F. Scott – who said “she refused to be bored chiefly because she wasn’t boring”.

Songwriter Neil Tennant of pop group the Pet Shop Boys later loosely adapted the quote for the band’s hit Being Boring.

No one could accuse Annika Viklund of being boring: she’s the progressive-thinking Senior Vice-President of Vattenfall Distribution in Sweden.

Yet when we meet, it’s not electricity grids she wants to talk about, but the perception of the energy sector as ‘being boring’.

“If there’s one thing that keeps me awake at night, it’s the scarcity of talent in the energy industry. Many of the older generation are now going into retirement at the same time that we have electrification and decarbonisation, and we need people who can build and plan and operate.”

This problem, she says, is compounded by the fact that “the energy industry is seen as the ‘old boring guys’”.

She’s clear that to tackle this problem, a strategy is needed to target not college students, but children.

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“We need to be in pre-school or kindergarten, or elementary school, and show them that they can become a climate influencer. There are so many things that they can do.

“We need to say: ‘You matter to this world. And you can make a difference if you come into our business.’ Everybody needs to feel that they are important and needed.”

She stresses that the industry needs more than just engineers: “We need lawyers, we need economists, we need communicators.”

She says that there is a perception that the next generation workforce wants more from a job than their parents did, yet Viklund has three children in their 20s and she states that “surprisingly, they are not so different from what I was”.

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“They would like to have an interesting development of their life and a work-life balance. They would like to learn at work, and to be accepted and included for who they are.”

All things that should be a given in any career and certainly things that the energy sector should – and does – offer.

But she stresses that to counter this draining of the current talent pool, the industry needs to collaborate as a whole, otherwise “we all fail together”.

“We have to start by looking at where the jobs will be, going forward. What kind of industries will be needed?”

And she is adamant that the energy sector should “definitely join forces with other industries. Too often, particular industries see themselves as ‘no one understands me – I’m very, very special’.

“But I think we have much in common, so we need to see these people – and not only young people, but those who wish to change career path in their 40s – as a whole potential new workforce.

“We need to see how different industries can cooperate and be much closer to schools and communities, like, I guess, it was in the ‘old days’.

“Maybe we should be inspired by the ‘old days’, when communities were stronger. Individualism is good… inclusivity is better.”

Community. Inclusivity. Communication. Collaboration. These are the words Viklund uses repeatedly in our interview: not just about recruiting new talent but also regarding the other major issues facing the energy sector, not least the race to net zero.

And a race is exactly how she describes it: “It’s a relay race to be sustainable. And don’t underestimate industries and consumers, because they don’t want to be in the position of saying: ‘I did nothing’. We need to run a little bit faster and a little bit smarter.”

Viklund is clearly a thinker, but she is also evidently a ‘do-er’.

She insists that to counter the climate crisis, the energy sector needs to get out of the blocks and start running the race.

“We can’t wait anymore. We need to ‘do’. We need to learn and proceed. We have a world in crisis and I am concerned that we think we have time to think and analyse more.

“Innovations often come from engineers and academics, and they like to have everything in place before they move. I’m not sure we can afford to do that.”

She looks to entrepreneurs like Elon Musk and Jeff Bezos for inspiration: “They ‘do’, they try, sometimes they fail… and they pick themselves up and go again.”

She emphasises that a key reason the sector needs to ‘do’, is that many of its customers have already been busy ‘doing’ for themselves. “I have customers breathing down my neck saying: ‘We need to get started.’

“They have found a way to produce products that are fossil free and decarbonised, and they want to put it on the market and get the market share.”

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“Sometimes you can believe that large industries do not move until they get large incentives to do so. Yet these companies are so much more engaged in sustainability, and by working with sustainability, they see how they can contribute.

“And then in turn, their customers start to ask how they can contribute to sustainability.

“People and industries start moving without incentives. Then you need the right incentives to get the late-movers to join.

“We need to include people. We need to engage people. Otherwise, we can’t get the whole of the civilised world to move. We need to move fast, be brave, to design and redesign.”

She compares the need for speed on climate action to the urgency that was required to find medical solutions to the coronavirus pandemic.

“Sometimes I’m impressed by how leaders act during a crisis. We now need to act like we did around the pandemic. So many decisions were taken that were going into the unknown – they were not trialled before. But it worked.”

Viklund says we should not look at the climate crisis “as if we haven’t adopted tremendous solutions and innovations in the past, because we have.

“I have a basic belief that everybody tries to do good things. All over Europe and the rest of the world, people are taking the measures that they can”.

What we need now, she says, is a coordinated approach to a common goal.

“Communication and collaboration, between society, politicians, and consumers. We need to have some kind of common roadmap to see how we can gather in our communities to discuss these topics. I think that’s an underestimated resource.”

The post ‘Scarcity of talent keeps me awake at night’ says Annika Viklund of Vattenfall appeared first on Power Engineering International.

Terry Raddings, Business Development Manager at GE Gas Power Systems, shares insights into GE’s position in the energy ecosystem and highlights customer pain points and experiences.

Watch the full video interview below.

This interview was filmed in November 2022 at Enlit Europe in Frankfurt, Germany

For more information, you can visit the GE Gas Power website here – www.ge.com/power/gas 

The post Evolution and revolution of the energy system – <strong>GE Gas Power</strong> appeared first on Power Engineering International.

In this recent industry interview, Byrne notes that these goals are being tackled with elevated research, technology development, and commercially ready solutions.

Watch the full video interview below.

This interview was filmed in November 2022 at Enlit Europe in Frankfurt, Germany

For more information, you can visit the Babcock & Wilcox website here – www.babcock.com

The post Tangible opportunities to decarbonize industry – <strong>Babcock & Wilcox</strong> appeared first on Power Engineering International.

Going back to the early 2000s, Endesa – Enel’s Spanish subsidiary – was very much a pioneer with smart metering in Spain, as the technology was at an early stage of development.

From the outset, Denda was involved in the initiative, which gained added impetus with Enel’s initial share acquisition of Endesa in 2009. The Italian giant had in fact pioneered in Italy the first country-wide smart meter deployment in Europe and among the first globally.

“I was working on looking at finding the right technologies for Spain,” recalls Denda, who with the successful completion of Endesa’s smart meter rollout based on Enel’s leading technology, became Enel’s global lead for smart metering solutions.

Subsequently, he took on responsibility for network technologies and innovation for the Enel Group’s global business line overseeing distribution – “everything related to the Operations Technology part of the grid” – until 2021 when the decision was made to bring together all the expertise developed in grid digitalization over the years, into a single entity named Gridspertise.

“Smart meters are a perfect example of how Enel’s role has been more industrial than simply as a user, including the design and engineering right up to the management of outsourced manufacturing,” he says.

“We felt that we should do this not just for Enel but for the whole sector. Worldwide, grid operators are facing the need to invest in the digitalization of power distribution infrastructures. We have the opportunity to share the technological expertise we have developed in Italy with countries that are tackling the energy transition, starting with regions where Enel Group is already present but with global growth ambitions.”

What is the Gridspertise offer?

With the digitization of grids, a priority shift is needing to be made. In September 2021, Gridspertise was officially launched and introduced as a technology and solution developer and provider, drawing on Enel’s over 20 years of experience in developments for diverse markets, from Italy to Europe, to Latin America.

While we have the strong foundation and backing of Enel’s credible technologies, we have introduced innovations, which in our opinion, are groundbreaking and could change the face of grid digitalization.

One is the QEd – Quantum Edge® device, which we expect to revolutionize how substations are digitalized. In addition, there are IT platform solutions that help optimize the flow of data, and other technologies such as digital twins.

We work with a huge ecosystem of partners and leverage the investment made by Enel in the past to find the best solutions for others. It is an acceleration of grid digitalization.

What is the approach to developing new technologies?

By looking at different markets, we collect their requirements and define their needs. We then challenge those needs with customers in different geographies.

We are fully conscious of the potential of our current product portfolio and we can determine the delta that needs to be developed to address specific needs. In those cases, Gridspertise continues to invest in innovation to reach the goal to satisfy those needs. In some instances, the Company launches co-creation activities working with customers and industry leaders.

We work with numerous customers, not only within the Enel Group. The company delivers its solutions based on a significant intellectual property portfolio of field-proven solutions to dozens of Distribution System Operators (DSOs) of different sizes in different geographies.

The question is: How do we create the right solution?

With a collaborative effort between Gridspertise and other market players, applying an open approach to design the right solution for each customer.

What is the QEd – Quantum Edge® device?

The ‘QEd’ is an innovative edge computing solution that we developed from scratch. It enables to virtualize key grid functionalities into applications and running them directly on the edge, increasing the reliability of the network and improving service quality for end users. This solution can do protections, RTUs for remote control, power quality measurements, routing, and distributed energy resources management – all technical functions that typically would need different individual devices.

Once intelligence is put into the grid, and close to the transformer, many use cases are opened up; flexibility management, power flow optimization, fault detection, predictive maintenance, etc. With the capabilities of artificial intelligence, the functions that typically would be done in the cloud, or on a central system, can be extended to the edge. This brings it closer to the problem of reduced latency.

We have already made the first deployments within Enel and started the first co-creation programs with customers in order to fine-tune their use cases. In 2023, we will start to see deployment happening on many different sites.

The QEd Co-creation Program is also available for technology providers to build applications that run on that hardware.

What other developments are in the pipeline?

We are focusing our efforts on the digital platform.

For example, we have developed Digital Asset and Vegetation Intelligence, which is very helpful for predictive maintenance. Simple use cases, such as the identification of vegetation in critical closeness to the overhead lines, can be automatically optimized, creating value by reducing operational costs for trimming. Moreover, the solution enables automatic recognition of anomalies on specific grid components, preventing the risk of failure.

In terms of technology, the platform enables advanced functionalities to customers or even operates the technology as a service.

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What gaps are there in the market?

Every geography presents specific needs and gaps to be covered.

In APAC, for example, the main issues are power losses and grid quality, whereas, in the US and Europe, where the digitalization level is more advanced, there is a need to integrate flexibility dynamically. Then there are some areas where the quality of the supply is still a big issue in regular situations or some emergencies.

In terms of solutions, our portfolio is able to cover the entire value chain of DSOs’ operations and we are progressively including new solutions focused on addressing the future needs of grid operators all over the world.

Much of the focus we see, will be on the integration of electric vehicles, storage, and the demand side in real-time at the control level.

What’s next for digital solutions and services?

The utility sector has been a very traditional one but over the past five to ten years there has been a shift to the cloud and away from legacy technologies, and that mindset has become a reality. The next step we will see is ‘everything as a service’. It will bring a lot of value as there are many power grid operators which do not have the technological muscle to make the jump.

In the near future, DSOs will also need help in reducing their carbon footprint and achieving net zero emissions. Sustainable Grids are not only determined by their ability to host more renewable energy sources. They require more sustainable operations and the adoption of zero or low–emissions equipment, materials, and digital technologies. To reduce the grids environmental footprint, Gridspertise strives to deliver integrated solutions that are sustainable by design.

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How would you evaluate the past decade and what do you see for the future one?

In the last decade, smart meters have helped stabilize the grid with granular information on consumption, allowing for real-time monitoring of electricity use, advanced management of the technical parameters of the grid, and detection in near real-time critical events, such as blackouts. The increasing awareness of low-voltage grid information has also enabled the improvement of the management of the medium-voltage grid.

Coming up in this decade, I see three evolutions. The first one is the transformation of the traditional grid into a smart grid. This means that the grid will need to increase its hosting capacity, work on network flexibility, and make system operators more responsible. In the future, I think we will have grids that can automatically reconfigure in real-time according to the situation.

The second trend I foresee is related to the shift towards electrification and the consequent increase in power consumption. This together with an increasing demand for information in real-time will stimulate customer engagement and participation in the electricity sector as well.

The third aspect is that the digitalization of the grids requires the right training and skillsets for managers and the workforce, as well as the right digital tools to streamline field operations. While the lack of grid managers with expertise in digital grids represents a huge challenge, the development of digital tools and their integration with operations is already in progress. Our solutions, for example, augmented and virtual reality, can be coupled with a digital twin overlay for workers in the field.

What is the vision for the future grid?

In the short term, the top priority is to accelerate grid digitalization to manage the key challenges of grid operators: loss reduction, quality improvement, reliability, etc.

In the future, with the increasing electrification and distributed generation, the grid will still play a central role to manage the complexities of the market. Even if everyone becomes a generator, there will still be a need to share and trade excesses. The electricity grid is like the internet of power and it will be extended even in the most remote locations.

For power grid operators, their role will also be different: by 2050 they will also be digital operators with the digital control of energy – unless we find another energy source even better than electricity, but that’s not foreseeable in my mind!

** The recent announcement by Enel of an agreement to sell 50% of Gridspertise to CVC Capital Partners is a further sign that the smart grid space is vibrant and at the center of the transformation of the current energy model, making this conversation even more relevant.

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About Robert Denda

Robert Denda is the Sole Administrator and CEO of Gridspertise. Previously, he served as Head of Innovation & Industrialization and Head of Network Technology and Innovation at Enel Grids. In that capacity, he led the development and application of digital grid technologies at Enel, the largest privately-owned international operator of power distribution grids, serving 74 million customers.

As Global Head of Smart Metering Solutions from 2014 to 2015, he oversaw Enel’s international rollout of digital meters, building on his previous experience in coordinating the rollout of 13 million smart meters for Enel Group subsidiary Endesa in Spain. At Endesa, Dr. Denda also served as director of the R&D department, innovation manager in the telecommunications sector, and manager of technology services at Endesa Ingenieria. As well, he is an active participant in European and international energy sector associations.

He holds a degree in Computer Science and Business Administration and a Ph.D. from the University of Mannheim in Germany.

Robert Denda will be a Keynote speaker at Enlit Europe on 29 November 2022; addressing ‘Europe’s Balancing Act: Energy Security and the Green Transition’. View more details on the Keynote here, and register to attend the event below.

Join Enlit Europe in Frankfurt and be part of the conversation about the energy transition in Europe and beyond.

Register now

The post A smart grid journey with Robert Denda, Gridspertise appeared first on Power Engineering International.

Get your personal copy and mingle with industry influencers shaping the power & energy sector at DISTRIBUTECH International
23-25 May 2022 | Dallas, Texas
Booth: 2109

Lead. Share. Inspire.

The Global Power & Energy Elites is industry’s moment to celebrate those at the forefront of innovation and an opportunity to position your organisation amongst inspiring leaders and projects.

Now in its eighth year, the annual print publication and digital platform features those leaders and projects setting the benchmarks in their regions and/or globally, giving readers insights into their planning and execution.

Read more on the featured projects

Readers are given a glimpse into the personal leadership styles of influencers at the forefront of innovation and transition in the power and energy sector.

Read more on what these leaders had to share

Rodger Smith, Senior Vice-President and General Manager, Oracle Utilities, welcomes this edition with powerful words that we should not ignore: “Many global utilities are leading the way in setting bold plans to eliminate carbon from their energy production in the next 25-30 years. But the road to get there is not an easy, cheap, or fast one.

“To truly transition to a net-zero energy grid, it will take utilities potentially decades and millions, even trillions, of dollars. The past year of record flooding, wildfires, and droughts remind us that time is not on our side.”

Read Rodger’s full message to the industry

The Global Power & Energy Elites editor, Ashley Theron-Ord, commented: “As parts of the sector take steps to adopt clean power and sustainable business strategies, there are leaders placing their heads above the parapet to put words into practice. The declarations delivered at COP26 are not enough – we need action.

“Ingrained in our team’s DNA is our dedication to telling the stories of the leaders driving a just energy transition. I am excited for you to join this journey as we work together to create a secure and sustainable planet for generations to come.”

Read the full preface

Lead Partner

Partners

The post Your inspiration for 2022: The Global Power & Energy Elites appeared first on Power Engineering International.

PEI writer Pamela Largue spoke to Carsten Reincke-Collon, Director of Future Technologies at Aggreko to learn more about the trends they are witnessing in this space.

What is hybrid energy and what are the main applications for hybrid systems?

A hybrid energy solution combines different sources of energy, typically at least one renewable source with conventional thermal power generation.

Often, a diesel or gas solution will be combined with wind or solar PV, creating a hybrid solution.

A hybrid solution can also be a generator combined with a battery. While the battery is not an energy source itself, it adds flexibility to the system and optimizes the system’s energy management. For example by displacing the need for conventional spinning reserve, which means you need less or no thermal generators for the provision of frequency control- and fewer generators mean less costs and less emissions.

Flexibility becomes ever more important as you increase the share of renewables in your grid. At some point, you will need short term storage, such as battery units to stabilize the grid independently from thermal power generation and deliver services around the integration of wind and/or solar power. Typical applications are peak shaving or load shifting.

Hybrid genuinely means combining different solutions to optimize your energy mix.

How commercially viable are hybrid options?

If we look at a use case in a remote site that needs power, for example a mining site, or community that is off grid, then you often have costs that are dominated by logistics.

Getting fuel to the site can increase costs significantly. If you can avoid having to deliver the fuel, but rather use renewable resources to produce energy, you can build an attractive commercial case quite quickly as the cost of renewable generation, especially solar, has become so low.

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If you have the space available on your premises or nearby, then it often makes sense to construct renewable generation to offset some of this fuel consumption.

Then you have to calculate against the blended cost of fuel and the additional equipment needed to convert that fuel into power.

It becomes a bit more challenging if you have to optimize a temporary power solution in an urban setting, in a shorter-term rental setting, or if you don’t have any space available for renewables. You would need to bring in a battery to optimize the operation of your thermal power equipment, using the batteries to run low load periods.

If you generate power at a high efficiency rather than having something idling for extended periods, it can influence the economics. It’s important to look at the economics of adding equipment to offset some of the fuel consumption, although you will also offset emissions.

The conversation becomes about the priority of the customer. How much they are willing to pay for a greener solution or a cleaner solution, rather than going for the standard conventional way of doing things?

How is Aggreko involved in the hybrid space?

I think a good example of one our projects is the 25.9MW hybrid solar-diesel system Aggreko will deliver to a new Gold Fields mine in the Chilean Andes.

The system will include solar PV and thermal diesel gensets to power the new Salares Norte open pit mine in northern Chile’s Atacama region.

Mines are a good example because they go through lifecycles. They start small in the exploration phase, and eventually enter the exploitation phase where you have on-site processing. Power consumption will naturally increase as facilities and operations grow.  

Depending on the state of the market for the commodity that is mined, the extent and size of the operation can vary over the lifetime and lifespan of the mine, which makes it a good candidate to work with us in a flexible capacity.

The mine in the Andes will need about 25.9MW and sits at an altitude of 4,500m, which is challenging as specially adapted equipment is needed to operate at these altitudes. By the completion of the project, we will have installed 9.9MW of solar PV on site.

This project really shows the strength of the hybrid solution. It’s a 10-year project, which helps to justify the upfront investment in the solar plant. The longer the solar plant operates, the more fuel savings will result.

Are other sectors looking to hybrids to decarbonize?

Yes absolutely. For many sectors, it will become the default way of doing things. However, the more important question is how far do we progress, and how do we get there?

Renewable generation has become cheaper than conventional generation, but there are important questions to be answered. Do we have the right boundary conditions? Do you need the energy for long enough to justify the investment? Do you have the footprint or the space available to construct the renewables? Can you find the fitting commercial agreement type for the customer?

These questions are key to determining whether a hybrid solution can be utilized in a specific sector for a specific use case. 

Aggreko recently conducted a survey to learn more about what the market thinks about hybrid tech, what were the results?

We conducted the survey to understand the pain points behind our customer’s energy transition, as well as how they are progressing and what challenges they are facing.

This feedback helps us to understand where we can focus our activities and tailor our support.

What we have found is that hybrid solutions are a stepping-stone, allowing the energy transition to happen gradually without a cliff-edge, or dramatic overnight shift in generation. Industries won’t immediately give up on conventional power generation but will gradually transition to a solution with a higher composition of renewables, therefore reducing emissions.

Hybrids allow for this gradual approach, which is important for many of our customers, especially those who don’t enjoy the luxury of a strong power infrastructure.

That’s where we can assist. We bridge gaps between power or infrastructure in often-remote locations. The state of infrastructure can sometimes keep our customers from using hybrid solutions and we help them address that.

Ultimately, the survey showed that this is a gradual transition, with hybrids seen as a premier choice to start that shift.

Have you noticed that some regions are more prone to adopting hybrid solutions?

It depends on the region yes, but also the kind of customers. Sometimes international customers will operate in a region that is not the fastest moving, with different ESG targets or policy landscapes.

The survey showed, for example, that the focus on carbon reduction was lower in North America than it was, for instance, in continental Europe or for the respondents in Africa.

It makes sense that in areas with a less strongly developed grid to operate on, you see higher interest in hybrid solutions.

And some sectors are more prone to hybrids. For instance, some Australian mining customers operate renewables in the solution, and they are experiencing great economic and emissions benefits.

Across many regions, we see that markets haven’t been set up to encourage the installation of additional renewables or storage for flexibility. If the regulatory framework is set up for grid connected applications, incentives might not be readily available which could impede the use of hybrids.

And what about hydrogen?

There is great potential for hydrogen across the energy transition. There is clearly a political intent to use it to store renewable energy and use it in additional value chains, whether it’s around fuel systems, or the chemical and steel industries.

If you look at the practicality of storing hydrogen, you can move it around as an energy carrier, it’s more of an energy vector than a fuel.

However, hydrogen must be produced from renewables. It doesn’t make sense to produce it from natural gas without capturing the CO2.

Hydrogen is expensive to store and transport, and the energy density is rather poor in liquefied or compressed form. Therefore, there are some challenges with hydrogen as a direct fuel.

Currently, we are seeing increasing interest in smaller, less energy intensive applications and some very high-profile customers are asking for demonstrators to show feasibility. It’s clearly the starting point for many decarbonization pathways and, because you can make other fuels from it, such as methanol, it promotes circular economy.  

Hydrogen is far from being available as a commodity fuel, and therefore I think it’s early days with little commercial traction at this point in time.

Do you think there will be an uptake in alternative and biogenic fuels?

Alternative fuels or biogenic fuels are a first step when switching from diesel to gas, an important step in combination with hybridization.

Promoting alternatives such as renewable diesel, also called HVO, is an important phase on the decarbonization journey. It allows you to retain the reliability and robustness of the solution that the customer values, while helping them to reduce the carbon footprint significantly.

We see through the results of the survey just how important it is to offer our customers a full range of options to reduce emissions while maintaining reliability. This will equip them to take sound steps forward to decarbonize their systems.

The post Hybrid technology – a critical bridging solution for energy transition appeared first on Power Engineering International.

Azad Camyab, the founder and CEO of UK-based demand-side response aggregator Pearlstone Energy, shares his thoughts on the opportunities and barriers within the market and how they can be addressed.

Has demand-side management got enough attention at COP26 and in general from governments/regulators? What are your hopes for the final outcomes at COP26 in relation to demand-side management?

Energy has become front-page news, and the debate about its future has never been so important. Understanding what that future might look like is crucial if we are to meet the long-term challenge of providing safe, reliable, and secure energy in a sustainable and affordable way. Of course, we cannot be certain how the energy future will evolve. Factors such as environmental legislation, energy costs, and economic developments will all have a major impact on the future energy landscape.

Part of the problem is that the supply side currently dominates our market. The inflexible, intermittent and unpredictable nature of renewables, the massive cost and environmental issues associated with adding to, or renovating our existing crumbling energy generation infrastructure, not to mention the issues around global energy supply earlier this year, are all very real concerns for us right now. Increased focus and investment on the demand side management (DSM) will help us to build a more sustainable and flexible energy system that can better accommodate renewables and reduce the chances of the global gas market holding us hostage in the future.

…My hope is that demand-side flexibility schemes will begin to play an increasingly important part in our transition to net0zero 2050 targets…

Azad Camyab

I believe demand-side management (DSM) got some attention at COP26 in Glasgow, but more can be done to promote it. On a more positive note, the strategic landscape for a number of recognised DSM and ‘flexibility’ players will be to develop their own VPPs (Virtual Power Plant) which consists of DSM as well as battery storage and decentralised renewable generation. The latter two initiatives were discussed in greater depth at COP26 and considered to be an important part of the transition to net-zero 2050 emission targets.

In the UK, National Grid’s Future Energy Scenario (FES) modelling published in July 2021 suggests that “the volume of “pure” DSR (demand-side response) could double within two to three years as the value of flexibility sharply increases”. By 2050, FES modelling suggests that “there is a high I&C customer participation in DSR to shift industrial electricity use at times of peak supply or demand, in response to a price signal”. According to National Grid, “the industrial and commercial sectors are expected to offer increased levels of demand flexibility, with significant opportunity for DSR which could reach 16 GW by 2050”.

Given all the recent positive signs in support and promotion of DSM in the UK, my hope is that demand-side flexibility schemes will begin to play an increasingly important part in our transition to 2050 net zero emissions targets and in fulfilling the commitments that will emerge from COP26 in Glasgow.

What role can demand-side management play in the energy transition and stabilising the EU energy market?

The generation of thermal electricity in the UK and EU is coming to an end. A large amount of coal- and oil-fuelled generation has and is retiring because of age and environmental legislation, including the European Union (EU) large combustion plant directive (LCPD). Furthermore, challenging economics for gas-fuelled generation has resulted in few new power plants being built and many, including units only two years old, being mothballed until the business case for their operation becomes more favourable.

The resulting decline in capacity and generator availability has led to very tight capacity margins—the difference between electricity supply and demand levels that can make the role of the National Grid in matching generation and demand quite challenging. Indeed, spare electric power production in the electricity system is predicted to fall to less than 2%, increasing the risks of blackouts across the United Kingdom should an unforeseen operational issue arise or the United Kingdom experience a cold winter.

Demand-side response (DSR) could provide an important contribution to managing the security of supply and cutting energy consumption. It offers a cheaper and greener alternative to building new generating capacity and could make a meaningful contribution towards the security of supply.

Within a few years, the impact of DSR on the UK capacity market will be manifold. It will enable any property owner to exploit his or her building’s untapped energy as a revenue source, provide electricity to the grid when needed, and ensure that all power use is optimized more efficiently and sustainably. In effect, the DSR Aggregator will enable property owners and asset managers to access their assets’ untapped revenue sources while meeting energy-saving demands, cutting costs, and contributing to the reduction of carbon emissions.

Are utilities fully leveraging demand-side management?

Utilities are getting more involved in the DSM. We have seen a number of investments or acquisitions of commercial DSM and flexibility players in the UK and across Europe. On balance, one can conclude that interest in the DSR sector generally is high with large players seeking a platform for market entry. Not only are there a number of EIS funds keen to engage, but there are also a growing number of Corporates looking for an efficient DSR solution. And the good news is that there are now a number of companies uniquely able to offer this to the broadest market at a very low cost. Over the past 3 yrs, Utilities such as Enel, Centrica, ENGIE, Shell and BP have entered the market by investing in or acquiring DSM companies such as Enernoc, Restore, KiWiPower, Flextricity, Limejump and more recently Blueprint Power.

Azad Camyab is one of more than 300 speakers that will be speaking on various topics disrupting the European energy landscape at the very first in-person Enlit Europe event.

Azad will be speaking during the Enabling Flexibility session in which speakers will explore the latest policy developments, technologies and projects enabling and creating vital flexibility at a market, plant and grid services level.
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What energy market challenges are hindering the demand side management market?

There are commercial challenges, especially for new entrants, due to a lack of investor certainty and reliance on multiple revenue streams. Therefore, some demand-side providers would like to see longer-term contracts. Others suggest that more frequent tenders, a move to regular auctions, standardisation of products would enable wider market entry, and potentially lower minimum size thresholds. However, there have been some concerns by a number of industry observers that DSR had not received sufficient attention and was disadvantaged compared to generation capacity. However, since last year, DSR providers can bid for and receive capacity agreements of up to 15-year contracts, on a par with new generation capacity.

Evidence from markets in other countries, where equal contract lengths are awarded to both generation and demand capacity, suggests that DSR can make significant contributions, without being at the expense of new generation.

Furthermore, in the UK, National Grid’s balancing mechanism (BM) initiative will be worth £500 million ($670 million) per year. Non-BM players will have the opportunity to bid their capacity and flexibility into half-hourly settlements. This is different to the traditional NG ancillary services where auctions were happening well before any DSR event. This provides a significant opportunity to monetise flexibility through wholesale trading markets and in real-time. It is also worth noting that intraday or day-ahead trading was only available to the BM players and licensed suppliers until last year, but this is no longer the case.

Local flexibility markets will also allow DNOs to procure flexibility services as an alternative to traditional grid upgrades which are capital intensive and unsustainable. 

Any other factors that are hindering the demand side management market?

There are other challenges too. For business customers, it can be confusing to navigate the different products and routes to market. There are cultural, informational and behavioural barriers. Confidence is critical and can be undermined by conflicting sales messages from demand-side providers. Industry standards are needed, and are being developed. For customers, senior buy-in and cross-business commitment is often required. Demand-side flexibility should link into the significant opportunities for energy efficiency.

Transmission system operators (TSO) across the UK and EU are keen to promote demand-side management. TSO’s and regulators are keen to provide ‘equilibrium’ in the energy system but not at any cost. Until recently, DSM was the premise of small diesel and gas generators providing the much-needed capacity (Megawatts) at times of distress for the TSO’s. However, there is now a greater focus in providing ‘clean DSM’ (Negawatts) which is cheaper as well as carbon neutral and more sustainable – i.e. provide customers with a new revenue stream by enabling them to sell the energy they don’t need at certain times, for short periods of time and currently can’t sell on their own.

Real-time data on the energy system and energy use will become the high-value commodity, not the energy itself. That will dictate the direction of travel for the future.

For that reason, the other notable challenge and risk is cyber security which is an important component of the smart rid and companies are getting more concerned about it. Large industrial and commercial customers are increasingly putting their trust into DSM aggregators to allow access to building controls. Highest levels of cyber security (physical security, server security and client security) should be addressed by using platforms such as the OpenADR Digital Security Certificates & Multi-layered Encryption to minimise any potential risks. OpenADR benefits are clear. It provides a non-proprietary, open standardised DR & DER interface that allows DSR service providers to communicate DR, DER, and TE (Transactive Energy, Blockchain & IoT) signals directly to existing customers using a common language and existing communications such as the Internet.

What are some of the measures in need to be implemented to unlock the full potential of demand side management?

…Real-time data on the energy system and energy use will become the high-value commodty, not the energy itself…

Azad Camyab

The most established market for demand-side flexibility today is balancing. The Capacity Market transitional arrangements have successfully started to attract new demand-side participation. Suppliers are also beginning to offer products to manage volatility and their imbalance position ahead of gate closure. Future opportunities are anticipated in the wholesale market, with DSM aggregators seeking to participate directly.

The market expectation is that change will occur. However, if change does not happen quickly enough, there is a risk of discouraging new non-traditional market participants. Likewise, as business customer interest grows, we need to ensure they are able to participate, and do not miss the opportunity. For example, some customers wanted to take part in the capacity auctions but couldn’t respond within the required timescales. Oversubscription for the new Enhanced Frequency Reserve (EFR) scheme in the UK also meant disappointed bidders.

Favourable regulatory regime and support, and, positive price signals will facilitate the uptake of demand-side management. As an example, only last week, most big UK firms and financial institutions will now be forced to show how they intend to hit climate change targets, under proposed Treasury rules in the UK.

By 2023, they will have to set out detailed public plans for how they will move to a low-carbon future – in line with the UK’s 2050 net-zero target. This clearly is a positive step for considering DSM initiatives in large industrial and commercial facilities – to promote and implement meaningful carbon reduction strategies at scale.

A shared vision of an end-point, or at least the principles for a future market is required, are the incremental steps to get there. This should be an evolutionary pathway – to ensure that we build on lessons learned and maintain investor confidence in the transition from existing to future arrangements.

About the author

For over 25 years Azad Camyab has held senior business development and project management roles in the energy, renewables and sustainability sectors. He started his career with CEGB and International Power in the UK where he was involved in the development, financing and construction of a number of power plants in the UK. He was previously the CEO of Marchwood CCGT Power Company and was also involved in developing, managing and financing a number of IPP energy projects globally; China, Mexico, Tunisia and Egypt.

Camyab is the Founder and CEO of Pearlstone Energy, an innovative Demand-Side Response Aggregator in the UK. His focus in the past 15 years has been in developing and financing renewable energy and other low carbon projects and initiatives. He is a Visiting Fellow on the Masters programmes in Sustainability Leadership, and Industrial Manufacturing at the University of Cambridge.

He is a Fellow at the Energy Institute and the Institute of Engineering and Technology (FIET), and, a member of the Enlit Impact Circle advisory Board (formerly European Utility Week and POWERGEN Europe).

He has a PhD in Materials Science and Engineering from Imperial College London and an Executive MBA from Bristol Business School.

The post The role of demand-side management in Europe’s energy transition appeared first on Power Engineering International.

In this exclusive interview, Enlit Europe editor-in-chief Kelvin Ross discusses Europe’s decarbonisation journey with Karim Amin of Siemens Energy and Holger Kreetz of Uniper. They highlight the landmarks of the past 10 years, what needs to happen this decade, and how the energy transition has affected their own companies. And they also reveal what decarbonisation means to them on a personal level.

Moderator: Kelvin Ross, Editor-In-Chief | Power Engineering International

Panellist:
Karim Amin, Executive Vice President, Generation | Siemens Energy
Holger Kreetz, COO, Asset Management | Uniper

The post Fireside Chat Recording: Siemens Energy & Uniper in conversation imagining Europe’s decarbonisation journey appeared first on Power Engineering International.