The push for decarbonization has been an overarching theme in power markets across the world. The last few years have seen a steady and constant shift from conventional power sources to renewable or alternative sources such as solar, wind, hydro and bioenergy.
Regulation and business forces are also at play, with governments – national, provincial and municipal- setting up targets to limit CO2 emissions. Today, many jurisdictions have legal requirements in place designed to meet specific greenhouse gas (GHG) targets, and those that don’t comply will be penalized.
Reducing CO2 emissions drives increased renewable production and potentially, higher numbers of electric vehicles. But what will be the impact of injecting more and more renewable energy into the grid? What impact will electric vehicles (EV) -and the electrification of transport- have on the power grid?
And how does it translate for companies producing electricity? “From their perspective, it’s a stay-in-business issue. They have to change, they must invest in renewables,” says Frazer MacKay, director of power for WSP in the UK.
Brexit or not, the UK’s objective is clear: by 2030, 50 per cent of the UK’s electricity must come from renewable sources. In the US, national goals may be less ambitious. Despite the current presidential administration’s attempts to halt the decline in coal production, the push for renewables remains active.
“New build of thermal power generation is out, and all utilities are investing in renewables. At the end of the day, there is demand for renewable energy, and utilities and producers are investing to meet that demand,” explains Jesse Kropelnicki, director of power for WSP in the USA.
The greening of the power grid is a complex challenge, consideration of local market economics is crucial and the affordability of power must be taken into account in generation planning. In Asia, for example, around 70% of the grid is thermal with investment in new build thermal generation over the past decade or so almost exclusively being in coal fired plants, attractive because of the low cost of power these plants produce.
Significant investments are now being made in renewable production and also in important thermal projects, which in future will be far more dependent on imported LNG as Asia looks to dramatically decrease its dependence on coal to power new generating plants.
“The story is that of maintaining economic growth in Asia, renewables are a growing aspect of the new build environment, however, development of thermal capacity additions will continue to take the largest share of new build investment explains Stephen Green, director of power for WSP in Asia.
Nevertheless, growth in renewables is impressive, with numbers indicating that the cumulative installed capacity in renewables (wind, solar, geothermal, biopower and small hydro) will grow from 437 GW in 2010 to an estimated 1,734 GW in 2020.
Existing players, and new ones, are investing to meet what appears to be insatiable demand. It has touched all corners of the globe, but its effects have been felt most acutely in urban centres. Successfully implementing new strategies to satisfy growing energy demand, while meeting the challenges of resiliency, reliability and security, requires creativity and technical innovation. It also requires committed leadership and effective policy-making.