The mission of this group is to bring together utility professionals in the power industry who are in the thick of the digital utility transformation. 

Post

Renewable energy - Impact on energy value ecosystem

Uttam Kundu's picture
Digital Practitioner TCS

Digital Partitioner with 20+ years of experience having an impressive track record on architecting and executing large digital transformations. Led more than 10+ transformation programmes for...

  • Member since 2022
  • 3 items added with 508 views
  • Jan 25, 2022
  • 508 views

Impacts of renewable energy  

The Utility industry is undergoing massive reforms due to high-speed adoption of renewable energy. This lead to a disruption in the current electricity market operations to manage  

  1. Balance between supply and demand due to change from centralized generations to decentralized generations through distributed solar photovoltaic systems.  

  1. Uncertainty and variability due to change in source of generation dependent on weather condition 

  1. Frequency in the grid which is dependent on unpredictable weather like speed of wind, availability of sunlight etc to keep the equipment and devices safe. 

  1. Ability to maintain the System Strength and voltage level due to wind and solar penetration.  

To overcome these challenges and provide reliable, affordable, and secured energy to the consumers, market regulators need unprecedented changes in the operations, to mitigate this risk in the energy value ecosystem.  

Market Reform changes  

National Energy Market (NEM) in Australia, are planning to introduce the following market changes while promoting micro generation on clean energy: 

Resource Adequacy and Thermal Retirement 

Improving reliability on Essential System Services 

Demand side participation 

Constrained in Transmission Line 

  • Introduction of Jurisdictional Strategic Reserve (JSR) and Retailer Reliability Obligation (RRO) 

 

  • Introduction of a new capacity market to balance between the demand and supply 

  • Implementation of a new fast frequency response (FFR) mechanism 

 

  • Unbundling operating reserves related services from energy market (i.e., Frequency, Control, Inertia, System Strength) 

 

  • Introduction of Day ahead market 

  • Dynamically limit import and Export of energy 

 

  • Visibility on Distribution Network 

 

  • Standardization of Distributed Energy Resource (DER) registration 

 

  • Standardization of DER Devices (interoperability, cybersecurity, and integration) 

  • Congestion Management Mechanism (CMM) and renewable energy zones 

 

  • Introduction of Locational Marginal Price  

 

  • Financial Transmission Rights  

 

Alongside the Australian NEM market, the other global energy markets are also redefining their operations for example in the UK Electricity Market we see the reforms on 

  • Capacity Markets and Contract for Differences (CfD) to keep the generation available in the specific energy situation 

  • Introduction of new services like instructed energy, frequency activated energy, voltage, pay to increase capability to manage the imbalance in the grid. 

  • Transition from DNO to DSO, strengthening of the network congestion management 

  • Products like Demand Side Balancing Reserve (DSBR) to manage the imbalance between supply and demand 

The US market is diverse in nature and some of the operators are quite maturity and has already implemented few changes like LMP, Day Ahead Market, Capacity Market, Interconnection between transmission lines etc. However, significant reforms are also initiated (i.e. FERC Order No. 2222) to make the ‘electric grid of the future’ and remove the barriers preventing distributed energy resources (DERs) from competing in the organized capacity, energy, and ancillary services markets. 

The reforms aim to achieve : 

  • Allow consumers to benefit from rapidly changing technologies in our power system (Solar, Storage etc.) 

  • Unlock the value of flexible demand and distributed energy resources 

  • Work alongside government schemes which are delivering on their policy commitments towards carbon emissions reduction 

  • Provide clear signals for timely and efficient investment to deliver reliable, secure, and affordable electricity for consumers. 

Impacts of the proposed reforms  

The above proposed reforms will impact in the energy value ecosystems to mange  

  • the exponential surge of device data due to introduction of meters in low voltage network, smarter sensors, appliances etc.,  

  • fluctuating IT system load due to democratization of renewable generation and controls,  

  • faster decision making at the edge to ensure network reliability  

We envisage a very high impact for all the participants in various areas and systems as detailed below: 

Reform Area 

Impacted Parties 

Impacted functional areas 

Resource adequacy and thermal retirement 

Generators, Retailers, LNSP (Local Network Service Providers), DNSP (Distribution Network Service Providers), Market Operator 

  • Assessment and Projections of  resource adequacy 

  • Design, implement and operationalize new capacity market 

Improving reliability on Essential System Services 

Ancillary service provider, Generators, Retailer, LNSP & DNSP, MDP (Meter Data Providers), Market Operators 

  • Registrations 

  • Offers & Dispatch 

  • Settlement, Billing and Prudential systems 

  • System Operations 

  • Design, implement and operationalize new day ahead market  

Demand side participation 

New participants role will be introduced for example DSO (Distribution System Operators), TSO (Transmission System Operator), Aggregator, DRSP (Demand Response Service Provider) for Wholesale Demand Response, Retailer, Market Operator, DER Investor (Customer), DNSP 

  • Registration 

  • Offers & Dispatch 

  • Settlement, Billing and Prudential systems 

  • DER  

  • System Operations 

 

Constrained in Transmission Line 

DNSP, TNSP, Market Operators 

  • Registration 

  • Dispatch 

  • Settlement, Billing and Prudential systems 

  • System Operations 

 

 

To deliver the reforms, the impacted functional areas need to be recalibrated from current technology and traditional energy data flow systems to digitally enabled future proof energy ecosystem.  

How Digital Technology expedites the Market Reform  

Composition of the following digital technologies will pave the design of future energy systems for any of the participants going forward 

  1. Intelligent edge devices will be used to reduce built-up of large-scale compute, while processing much at the edge. This will help in faster and meaningful decision-making in Operations, Monitoring as well as forecasting and analytics. 

  1. 5G Network with low latency and high bandwidth will enable the real time data collections from various smart devices. This enables to undertake prompt decisions like dynamically enable import export limits, based on real time demand and supply.   

  1. Cloud enabled IOT platforms will provide the real time analytics of the data collected from the edge devices and provide dynamic decisions for the reliability of the energy ecosystems. 

  1. Store granular time series data in new cloud enabled Timeseries/Timescale database, which provides almost unlimited capacity at low cost 

  1. Store and archive logscale data in low-cost cloud-based storage services and use the power of spark-based Map-Reduce technology for Planning, Forecasting, Network Analysis etc. 

  1. Use purpose led microservices for EV charging, micro generations, DER registrations etc. using cloud native managed Kubernetes services 

  1. Create blockchain based trading and settlement platform for trustworthy market transactions like peer-to-peer trading and transactive energy 

  1. Use cloud-based AI/ML technologies to build robust and efficient forecasting and future prediction models   

  1. API based integration between different systems, devices, and external parties. Create API economy for flexible, standardize and secured interoperations. 

  1. Create a Data economy on top of scalable cloud-based technologies to generate new revenue stream and bring greater transparency in the energy ecosystems. 

 

Conclusion 

The introduction of renewable energy is disrupting the entire energy value eco system. New levels of complexity are being introduced for the energy market and associated participants. Challenges in creating long term value and avoid being outmanoeuvred by disbalance in demand and supply.  

Digital technologies will play the pivotal role of the future energy value ecosystem which will led towards sustainable path towards the committed Paris Agreement.  

 

 

References: 

https://esb-post2025-market-design.aemc.gov.au/32572/1629945809-post-2025-market-design-final-advice-to-energy-ministers-part-b.pdf 

https://www.ferc.gov/media/ferc-order-no-2222-fact-sheet 

 

Uttam Kundu's picture
Thank Uttam for the Post!
Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.
More posts from this member
Discussions
Spell checking: Press the CTRL or COMMAND key then click on the underlined misspelled word.
Matt Chester's picture
Matt Chester on Jan 25, 2022

To deliver the reforms, the impacted functional areas need to be recalibrated from current technology and traditional energy data flow systems to digitally enabled future proof energy ecosystem.  

What are some of the biggest negatives you've seen in practice when that future proofing fails to happen? 

Uttam Kundu's picture
Uttam Kundu on Jan 26, 2022

Thanks for the question. I have experienced both success and failure. However, the failures are not because of digital technology rather how it is planned to be implemented, how the organization change management is taken into considerations, how right skillset made available to deliver the transformation etc. 

I have realized that with proper strategy, planning and governance are the key to make the digital transformation success and future proof.

Jim Stack's picture
Jim Stack on Jan 26, 2022

Uttam, It seems to me that the four items on your list can be fixed by the addition of Battery Storage. Lucky for us it is getting lower in cost and better each day. Not to mention the new V2X Vehicle to X everything. So we are saved by the advances in Technology of the Battery Storage. 

  In FACT the GRID has needed Storage for 100 years. There have been some attempts with pumping hydro water Off Peak and releasing it On Peak but that was very little storage. Todays batteries are non toxic and can be connected to any amount of storage capacity that is needed. Almost every utilitity has added Mega Watts to their GRIDS.    

 

QUOTE=

  1. Balance between supply and demand due to change from centralized generations to decentralized generations through distributed solar photovoltaic systems.  

  1. Uncertainty and variability due to change in source of generation dependent on weather condition 

  1. Frequency in the grid which is dependent on unpredictable weather like speed of wind, availability of sunlight etc to keep the equipment and devices safe. 

  1. Ability to maintain the System Strength and voltage level due to wind and solar penetration. 

Uttam Kundu's picture
Uttam Kundu on Jan 28, 2022

Thanks Jim for your comment. I agree to your point that emerging Battery storage technology is one of the key innovation which is going to disrupt the the entire energy value ecosystems. 

Sandeep Choudhury's picture
Sandeep Choudhury on Feb 17, 2022

Gr8 Insights!

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »