Renewable energy - Impact on energy value ecosystem

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.  

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

3. 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. 

4. 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: 

 

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: 

 

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. 

2. 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.   

3. 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. 

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

5. 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. 

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

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

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

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

10. 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