The gap between fossil fuel and renewable
has narrowed and renewable are now almost at par with fossil fuel based energy.
This gap is shrinking and in the near future renewable will deliver energy art
a lower cost than fossil fuels. In the near past the gap between renewable and
fossil fuel cost suggested that renewable will impose a cost upon society this
is no longer true .Energy security had promoted some societies to go for
nuclear energy this has also proven to be
a solution that does not form a part of the least cost solution . The
term energy security is loosely used and has therefore multiple meanings.
Energy Trilemma
Introduction
As
world population continues
exponentially growing and becomes more urbanized and more affluent, demand for power, heat and transport will grow with it. Global
energy demand is expected to increase just as fast and potentially double by 2050. To keep up with global energy demand, the investment requirements for
energy infrastructure are nearly US$50 trillion between now and 2050.With such a large portion of money being invested, and the need for energy becoming ever so critical, the method of resource allocation is
paramount.
There are three challenges that have to be addressed when facing investment in energy and demand, and these three challenges imply a trade-off when choosing one over the other. These three challenges constitute the Energy
Trilemma:
•
Energy Security
•
Energy Sustainability
•
Energy Affordability
It is most usually used
to describe a balance between energy security, social impact and environmental
sensitivity. These three things are presented as conflicting aspects of energy
production.
The trilemma
can be thought of as three independent axes, each with their own scoring or weighting. A good score will be on that is higher on a particular axis. No one axis is necessarily more important than the other two, so the optimum is to achieve high scores on all three. The challenge then becomes the achievability of this. The value of the Energy Trilemma as a tool is it powerfully communicates the relative positioning against all three.
Definition
In philosophy, a trilemma is a choice
between three unfavorable options. In economics it is also known as the
‘impossible trinity’: a trade-off between three goals, in which two are pursued
at the expense of the third. But the energy trilemma appears to be different:
meeting it requires achieving all three goals, although within the parameters
of the particular wishes or interests of the actor in question. The trilemma
paradigm to present a problem – or ‘challenge’ – that can be solved with
minimal trade-off between the elements
The Energy trilemma was first defined
as an urgent global problem by the World Energy Council in 2011, and they have
been helping different nations to work towards reconciling the three dimensions of the trilemma:
1. meeting the
ever-growing demand for energy,
2. ensuring there is
affordable, accessible energy for all, and at the same time
3. minimizing the effect
of energy use and production on climate change
The
World Energy Council (WEC), an UN-accredited global energy body, described an energy
trilemma comprising ‘energy security, social equity and environmental impact
mitigation’ in a recent report. WEC’s view of the trilemma is focused on
sustainable development and environmental impact.
Energy company E.ON describes the energy
trilemma as the interplay between carbon emissions, the security of energy
supply, and energy costs. Its website positions low-carbon technologies (a
combination of CCS, gas, renewables and nuclear) as the solution to reducing
emissions and costs while ensuring energy security.
E.ON’s and WEC’s
trilemmas contain the same elements as the others, they present a balanced
trade-off hinging on sustainable, low-carbon energy. Again, this is not a
trilemma in the traditional sense. The traditional concept of trilemma is used for
ranking of countries and businesses on common parameters. In reality the three
most crucial elements in energy planning will vary with time and with countries.
The overall objectives of each society or country will vary and it is from
these objectives that the energy sector parameters will be derived. The three
most crucial factors are not absolutely mutually exclusive these can be viewed
as three streams that are of importance , in the final analysis all three will
not be completely achieved and some combination of the three will constitute
the accepted plan.
The
lowering of CO2 emissions can be achieved but it requires long-term and
significant investment at a time when meeting the challenges of fuel poverty
and the provision of competitive energy costs is more important than ever. Combine
these two vital objectives with maintaining the security of energy supply - considered
central to national security - and we have what may look like an impossible
triangle.
Building
the low carbon economy we all need means reducing greenhouse gas emissions
across every aspect of our society. Improving the security of energy supplies
demands the better utilization of indigenous resources, the efficient use of
all resources and increasing the capacity of low carbon and renewable
resources.Our development of carbon capture and storage for coal and our
investment in efficient, gas-fired generation continues to lower the carbon
footprint of our own central generation.
This is
enhanced by our long-term commitment to modern nuclear power. Decentralised,
renewable energy brings low and even zero carbon heat, hot water and
electricity directly to local communities. It improves the security of energy
supplies nationally and reduces the distribution losses from central
generation.
From bio-fuelled combined heat and power (CHP) for low carbon villages, towns and cities through to micro generation for individual homes, we are working to keep the lights on, costs down and to protect us all from the impact of climate change. Our Sustainable Energy business has become a leader in low carbon, decentralized energy.
There is no silver bullet. Renewables may be low carbon but they rely on the wind, the sun or guaranteed supplies of bio-fuels and, while nuclear power can provide continuous low carbon energy, it requires high investment.
Gas has served many counties well for many years but, there are now gas shortages and it has to be imported as LNG at some cost Coal may be cheaper but produces more emissions than gas. Our ongoing development of carbon capture and storage could lower the emissions from coal. The truth is we need all these energy sources and technologies to balance the risk. We continue to invest in all of them as we meet the challenges posed by the Energy Trilemma. The single most important factor for change is behavior and lowering of carbon emissions.
From bio-fuelled combined heat and power (CHP) for low carbon villages, towns and cities through to micro generation for individual homes, we are working to keep the lights on, costs down and to protect us all from the impact of climate change. Our Sustainable Energy business has become a leader in low carbon, decentralized energy.
There is no silver bullet. Renewables may be low carbon but they rely on the wind, the sun or guaranteed supplies of bio-fuels and, while nuclear power can provide continuous low carbon energy, it requires high investment.
Gas has served many counties well for many years but, there are now gas shortages and it has to be imported as LNG at some cost Coal may be cheaper but produces more emissions than gas. Our ongoing development of carbon capture and storage could lower the emissions from coal. The truth is we need all these energy sources and technologies to balance the risk. We continue to invest in all of them as we meet the challenges posed by the Energy Trilemma. The single most important factor for change is behavior and lowering of carbon emissions.
The
World Energy Council states that its "definition of sustainability is
based on three core dimensions
-
Energy security, which encompasses things such as the reliability of
infrastructure.
-
Energy equity, relating to how accessible and affordable the energy supply is
across a population.
-
Environmental sustainability, which looks at, among other things, the
development of renewable and low carbon sources.
In
its most recent World Energy Trilemma Report, the WEC said that the energy
sector was "at a transition point" and faced a host of challenges. The
WEC says that its trilemma provides what it says is a "clear
framework" to deliver a transformation in energy and make
"sustainable energy systems a reality."
2015 COP21
agreement saw global leaders agree to ensure global warming stayed "well
below" 2 degrees Celsius and to "pursue efforts" to limit the
temperature rise to 1.5 degrees Celsius. It is within this context that energy
security, energy equity and sustainability – the trilemma – will become
increasingly important.
Some Solutions to
the Enigma
Global energy markets are
in a period of dramatic transition. The emergence of shale gas, mostly notably
in the US, has been disruptive to the industry, leading to falling oil prices.
This has challenged the long-time dominant position of international oil
companies (e.g. BP, Shell, Exxon Mobil) in the petroleum sector. Natural gas
has emerged as a potentially important ‘bridging fuel’ to a low carbon future,
with several leading national economies, including China, making the switch
from carbon-intensive oil and coal to this ‘lower-carbon’ alternative. Away
from oil and gas, renewable energy sources are becoming increasingly cost
competitive and are gaining societal and governmental support. The energy
transition alters the global dynamics of energy security, with some countries
finding their energy independence challenged, whilst others enjoy the economic
growth that is inherently linked to energy abundance. A similar distinction can
be made between populations with regards to energy equity: the accessibility
and affordability of energy, and as with energy security this too is in a state
of flux due to changing market conditions.
Policy advisers are
seeking high energy security, low carbon emissions and low prices for heating
and cooling. The fear of lights going out haunts the politicians. Everyone recognizes
the need to move to a low carbon economy. The Treasury does not want to meet
the costs in a time of austerity. These objectives are seen as irreconcilable –
symbolized by an image of an Escher triangle that would be impossible to
construct.
However, heating and
cooling can be provided by heat transfer – with no emissions of carbon on-site.
Heat transfer using heat pumps is cheaper than burning fossil fuels for
heating, or employing roof mounted chillers for cooling. And the energy
ultimately comes from the sun, not from imports.
Decarbonisation of the
grid requires reducing combustion of fuels.
Decarbonisation of the
grid means renewable electricity generation from wind and solar.
Decarbonisation of the
grid points to the electrification of heat.
Electrification of heat
implies the use of heat pumps to transfer heat from where it is available to
where it is needed.
Heat Energy storage
implies using ground source heat pumps to take advantage of the ground as a
natural store of heat energy between summer and winter.
The search for a
practical and affordable way to reduce carbon emissions continues. Governments
all recognize the need to control the emissions of carbon. It is easier to recognize
the problem of global warming than to know what to do about it Renewable Energy
can be divided into Renewable Electricity and Renewable Heat: these two
manifestations of energy need to be treated in different ways.
The most promising
approach to reducing carbon emissions from heat is to arrange for the transfer
of heat from the time of abundant supply (summer) to the time of need (winter).
It is cheaper and more efficient to transfer heat
when it is needed instead of paying to generate heat
each time heat is needed. Heat pumps can be used to transfer heat out of
buildings into thermal banks in summer. They can also be used to transfer heat
back from thermal banks into buildings in winter.
There can also be
opportunities to transfer heat from places of abundant supply (data centers or
supermarkets) to places of need (like schools or hospitals). This can be
achieved where the excess heat is reasonably close to the demand – and
information and a heat sharing infrastructure is accessible so that the
transfer can be organized and controlled.
There is a way of
resolving the energy trilemma: it can be achieved by the integration of:
§ heat
pumps
§ thermal
energy storage in the ground
§ heat
sharing networks
§ electrification
of heat
§ electric
load balancing
§ decarbonisation
of the grid
If society wants to
achieve a low carbon economy then governments must act to encourage companies
and citizens to reduce combustion. This can be achieved by:
§ .
increasing carbon taxes
§ requiring
the use of low carbon technologies via planning permission
Evolution in Energy Trilemma
definition
The power balance in the energy trilemma will change between
sustainability, security of supply and affordability. The importance of both security of supply and
sustainability will keep increasing and become more or less equal in 20 years.
As for affordability, its importance will increase but not substantially
compared to the other two : Security of supply-Despite the need to transition to
cleaner energy, people do not want to compromise the comfort the current energy
system have been giving them through the reliability of power. The supply of
energy to end users should not be disrupted. Since renewable energy sources (RES)
are variable, they cannot be relied upon them without a backup. Therefore, to
keep a secure and reliable energy supply, generation facilities running on
fossil fuels must be kept connected to the grid and available. This is mostly
done, thanks to capacity mechanism. However, as we make breakthrough in
storage technology and find ways to implement demand-response efficiently, RES
could be sufficient to ensure the reliability of power. Moreover, the
construction of a large interstate transmission grid and the coupling
of electricity markets mark the transition from
a national notion of security of supply, to a regional one. This encourages a
better collaboration between countries with different energy mix; Affordability-Affordability was a major issue in the
beginning of the 21st century, but in
the last decade, the cost of renewables and storage have decreased considerably. In the developed
world, Feed-in tariffs, as well as other support mechanisms have been introduced to decrease the risk associated with
investments in clean technology. However, as renewable technology matures and
as fossil fuel based generations age, requiring the construction of new power
plant, it becomes clear that investment in RES is profitable. Thus, countries
are leaving those mechanisms and let the market work. Moreover, a well-defined
carbon price should be able to steer the majority of investment in RES in the
future. In the developing world and for those who wants to go off-grid, the
availability of a cheap, clean energy source, which simple and rapid to install
has boosted energy access.
Utilization
Countries,
cities and large organizations can set policy or socio-corporate strategy by identifying where they want to be on each axis and what is the desirable resilient position. They can benchmark their current positioning. This enables a reality check and proper understanding of the existing influences
and
drivers to achieve an informed position and be able to compare performance relatively to the performance of other equivalent entities. A constructive dialogue is possible on a reasonably consistent basis, without getting lost in an impossible maze of data.
The power and value of the trilemma tool is then its ability to test whether new policies or projects are helping or hindering moving towards the desired position and what adjustments or change in emphasis of such new initiatives are needed
Energy
sustainability
Energy sustainability is the indication of its propensity to create damaging
pollution. There is considerable debate linking energy consumption to the creation
greenhouse gases to their influence on adverse climate conditions; whether long-term global warming through carbon dioxide, increased climate volatility causing extreme disruptive events, or increased pollutants. It is
generally considered that increasing the likelihood and prevalence of such
conditions is unsustainable and that measures to constrain or reduce them are highly desirable.
However, is it fair to impose very tough sustainability obligations uniformly or should there be some adjustment or compensation in the case of newer
less mature economies? Since the newer economies tend to have less mature industrial bases their starting point is that in global terms they are lower
contributors to climate pollution. It is only reasonable to provide some margin for them to catch up. New
technological developments have made some renewable technologies at par with
conventional energy sources and this distinction in now blurring between
renewable and fossil based energy resources. The technological development is
ongoing and in the near future renewable will be at par or even cheaper than
the fossil fuel based options.
Energy affordability
Energy affordability is the accessibility and affordability of energy supply
across the population. Energy can be considered a public good and it is the national government’s
responsibility to ensure that its entire population can access and afford energy.
Energy
is a good that can enable
growth;
without
it,
many
daily functions are not possible. Energy allows for industrial growth, entrepreneurial activity and other public goods to be offered such as health and education. Much of energy policy becomes centered on affordability due to political incentives, and is the reason why many energy markets and utilities are forced into
competition; to maintain fair prices for the public. However, this
position is complex because energy has traditionally been a major source
of
tax revenue to many national economies, helping to fund national socio- economic infrastructure.
Some
energy sources have a cost directly linked to rate of consumption. Others might have high initial capex costs but then their marginal cost of
energy produced might be low and almost at no added costs for extra energy created. Zero net energy schemes may be affordable on the grounds that overall they have no net energy demand external to their system.
All three variables, security, sustainability and affordability cannot be thought
of in isolation.
Low carbon and renewable energy requires significant capital expenditure and government support. So these more energy sustainable sources require a trade-off with affordability. Energy prices would rise to balance investment in renewables and the consequence would be more expensive energy.
This, however, is no longer absolutely valid. Renewable generally are capital
intensive but the delivered cost of supply is comparable to fossil fuel
alternatives.
Energy
security implies that there needs to be enough power capacity
to generate electricity to meet demands, both in terms of security of energy availability and in terms of network stability and frequency
control. However, to strengthen capacity and security, the choice has to be made between cheaper power sources to maintain affordability or
more expensive renewable energy which builds on sustainability.
Here the situation is mixed. Some renewable sources, wind and solar, do impose
a cost on the system this is related to availability of these sources and additional
transmission and control requirements needed to maintain system security and integrity,
the cost of these renewable is now at par with fossil fuel sources , this has
resulted in altered generating capacity
expansion planning regimes.
If a country has poor energy infrastructure and low natural resources, it is forced to import expensive sources of energy and compromise energy
affordability. Permitting it to import more affordable sources will compete with ambitions for more sustainable energy. When thinking of security, sustainability and affordability,
the other two must always be a considered for a holistic, integrated understanding of any energy problem
Underpinning the trilemma is the
concept of energy security, which is of significant rhetorical interest in
itself. It’s obvious that energy security means many things to many people. It
could mean being self-sufficient in renewables, having indigenous fossil fuel
reserves, or having enough money to pay the gas bill. The often broad and
unspecific use of the term creates a risk that it may become an empty
signifier: a term that is used in so many different ways that it is emptied of
all meaning, and so comes to mean nothing.
Some
manipulate this elastic term to promote renewable and low-carbon means of
production, and bolstered vision with terms indicating reliability like
“robust” and “comprehensive”. renewable technologies are deemed as the answer to the problem of energy
security as they will protect bill payers from the “increasing costs of
volatile fossil fuel imports from riskier parts of the world”.
One version implies that energy security is
achievable within the parameters of his reappropriated trilemma. Whilst another view appears to be saying that energy security and
environmental sensitivity are separate, independent issues. Both can be
delivered, but at considerable cost to the customer.
If we look at the global context, many
countries are expressing energy security as the reason for switching to
renewables and other low-carbon technologies. For example, China’s energy
security strategy involves energy efficiency, and increasing investment in renewable technologies– hydropower, wind,
biomass and solar – and electric cars. Energy security is aligned rhetorically
with national security in language like “volatile” and “riskier”, but also has a basis
in policy and research, especially in the USA.
Recent Trends in Energy markets
The
global electricity sector is being transformed by three reinforcing trends:
decarbonization; digitization; and decentralization. Meanwhile, empowered
energy consumers are emerging with new choices in how they consume and manage
their energy use.
Decentralization,
marked by the increased use of distributed generation, such as electricity
generated at a user’s site via solar panels, and distributed energy resources,
such as storage, is having a huge impact on demand and supply dynamics.
The
impact of distributed generation is examined in a new report, "World Energy Trilemma
2017 Changing Dynamics— Using Distributed Energy Resources to Meet the Trilemma
Challenge." The "Energy Trilemma" — the challenge of balancing
energy security, energy affordability and environmental sustainability —
provides a framework to understand the disruptions and opportunities of
increased decentralization in the energy system.
Consumer
and technological pressures for increasing distributed generation will require
fundamental changes to regulations and who can participate in the energy
market. Decentralization not only adds new resources to the system, but also
creates new actors in energy markets. Market entrants such as large industrial
energy "prosumers" that are using onsite renewables to meeting energy
demands, the growing number of distributed energy resources such as electric
vehicles, energy service aggregators and rural energy entrepreneurs —
particularly in countries with limited energy access — offer new sources of
generation, supply and demand management.
Energy
leaders worldwide surveyed and interviewed for the report are skeptical as to
whether current regulatory frameworks can accommodate the shifting energy
supply structure. However, regulators will need to adapt quickly. Countries
that do not take the necessary steps to integrate distributed energy resources
will face heightened energy security risks, potential infrastructure
redundancies and investment challenges that adversely will affect their Energy
Trilemma performance.
The
digital revolution is affecting the power industry. If the last decade was
about developing hardware capable of generating cheap, plentiful renewable
energy, the next one will be about making energy generation systems smarter.
Exponential growth in low-cost processing power advances in big data management
and growing cloud capabilities, coupled with the acceleration in analytics and
machine-learning, have the potential to transform the way we produce, buy and
sell electricity. The advent of distributed generation, solar and wind options,
roof tops and two way metering has made it mandatory to adopt digitization , in
order to control run and use the power system whist maintaining its integrity .
Smart metering and time of use meters plus consumer devices that can respond to
signals from the system all make digitization essential to achieve cost
reductions in supply and provision of energy.
The
World Economic Forum estimates that $1.3 trillion could be generated by
digitalizing electricity generation worldwide between 2016 and 2025. It lists
five initiatives in particular – better management of asset performance,
real-time platforms data, integration of energy storage and customer-centric
solutions – that it believes will individually unlock at least $100 billion of
value over the ten-year period.
Transformation
of the industry is already underway, it
is happening now, plant digitalization
is a rapidly growing focus across the industry with most organizations working
on their strategy and initiatives. An
overhaul of the power industry is long overdue. Power generation networks have
become much more complex in recent years, thanks mainly to the rise in
renewable energy power generation and the growing number of small, distributed
power producers. Demand for power is also increasing in many countries, yet
grid infrastructure is often old and creaking. Equipment is both difficult and
costly to maintain, but tighter regulations are driving the industry to be more
efficient and cleaner than ever.
Digitalisation comes with up-front costs, but
technology’s ability to improve productivity can pay dividends. Digital technology can help to solve
some of these challenges. For instance, intelligent data systems are enabling
network operators to handle large volumes of intermittent wind, solar and other
renewable power, and to accommodate more distributed power producers. For plant
operators, building a database that forms a digital twin version of the
physical plant can lead to the development of analytics that can trigger
service and maintenance actions, even before problems occur.
Power companies perceive that digital technology
will support the core fundamentals of their businesses with cost management as a major focus and also as a means of optimizing processes. Gains can also be made in operations and
maintenance, alongside improvements in production capacity, safety and
information management.
Digitalization has the potential to boost the
production capacity of their facility by at least 10 % although 40% savings are
also expected by some . . Companies
think digitalization will reduce operating costs by anywhere from 10 per cent
to 50 per cent, with an average of just over 27 per cent.
Economics
and technical advantages will drive digitalization in the energy system, but
major challenges remain. Power companies are awash with data – a modern
gas-fired power plant is equipped with more than 10,000 sensors – but most have
a long way to go before they can use this effectively to trim costs, increase
sales, and boost efficiency and reliability not one uses more than half the
data they collect. The average is 27 per cent. Establishing an intelligent engineering master
data management system can be key to helping organizations improve on these
numbers , data analysis would be easier with digital information management and
it would enable them to make more
informed decisions.
Digitalization
comes with up-front costs, but technology’s ability to improve productivity can
pay dividends it is because of the
enormous capital expenditures required by the industry that it becomes so
important to wring every last drop of productivity from power assets, and software
is indispensable in this effort. And digitalization will bring great rewards.
But it will also bring change and uncertainty to what is a relatively
conservative, risk-averse industry
More
than 50 percent of energy leaders said they expect a rapid increase in
distributed generation — to a share of 15 percent or higher — of the installed
generation capacity in their country by 2025. Indeed, Oliver Wyman estimates
that every two minutes a home or business in Europe and North America
goes solar. This pace of change is expected to accelerate with technological
developments in storage options that can support distributed generation. As one
energy leader we interviewed noted, "The pace of innovation on batteries
and re-charging has increased at a faster pace than expected."
Three
trends are impacting the global energy sector at an unprecedented pace: decarbonization,
digitization, and decentralization. Energy policy
and regulations have to adopt quickly to respond to these technology-driven
trends that are enabling empowered energy consumers and transforming demand and
supply.
Get the policy framework right and distributed
generation offers new opportunities for countries to provide secure,
affordable, and environmentally sustainable energy. Policy frameworks that do
not integrate distributed energy resources will face investment challenges and
may slip down the Energy Trilemma
Index.
The World Energy Trilemma 2017: Changing dynamics - Using distributed energy resources to meet the
Trilemma challenge’, tapped into the global insights of leaders across
the evolving energy sector. Through interviews and surveys with utilities,
transmission companies, energy entrepreneurs, storage providers, and e-vehicle
developers, we identified three key focus areas for policymakers and industry
leaders to balance the energy trilemma and meet evolving consumer demands.
Index
The annual Energy Trilemma Index
ranks country energy performance in providing secure, affordable, and
environmentally sustainable energy. The Index can be used to guide corporate strategy
both in terms of their branding / positioning and their investment choices – e.g. help identify
opportunities where projects
and program benefit the Energy Trilemma outcome,
the financial performance and socio-corporate objectives. It can help identify opportunities where projects and program benefit
the energy trilemma outcome, the company’s financial performance and its socio-corporate objectives.
The countries that tend to be the best
at balancing the resulting trade-offs between these interests [energy
resources, political stability, wealth, affordable and environmentally
sensitive energy] are those that have diversified their energy resources and
actively manage demand for energy through well-established energy-efficiency
programs. The Trilemma
Index is a rating based on market dynamics of what
a country or major organization should
do, by taking into account
constraints such as capital resources
and natural resources.
By
setting targets for countries, it gives a quantitative basis for policy makers, energy industry professionals and countries a whole to see not just the impact of future decisions on the country but internationally as well, comparing it to its relative position in the index. Multi-national organizations can use it to assess the relative impacts and benefits of investing into different geographies.
It can also be used to look at project impact on a regional level. For example,
when looking at the EU, countries must make security of supply decisions based on neighboring capabilities. As for sustainability, there are EU wide targets, so countries within the EU can see where other countries stand against these targets and devise national plans accordingly
The
trilemma introduces a framework in how to view these three energy challenges together.
Previously, security, affordability and sustainability have been discussed by policy makers and industry separately, but these three components have strong influence on each other. Each requires trade-offs to make the other
component better.
Rather
than having international and national policy focus on each component, policy and decision makers need to think within the trilemma framework.
The Energy Trilemma combines
three key aspects
of the energy markets
and brings about
a framework to discuss the issues holistically.
With demand for energy showing no signs of slowing down, and a pressing need for an international effort to combat climate change, the trilemma framework is more pertinent than ever. The Arup Trilemma Index can be used for countries to observe their performance in each energy variable and can similarly be applied to Cities and organizations. Arup’s index can be modified to incorporate large energy-related infrastructure projects, to see the impact these projects would have on a country’s ranking in affordability, security and sustainability. It can also be extended to compare utilities’ performances, such as water
companies, to advise corporate strategy.
The Trilemma Index is an important tool and framework that major consumers of energy and organisations in the energy sector can use for an integrated view and informed decision making. The trilemma framework can enable multi-dimensional thinking, allowing for policy to be tailored not just toward energy security for example, but also to see impacts on sustainability and affordability, and possibly improve decision making towards a more integrated
Evolution
from centralized model
Electricity systems are evolving from a centralized model
dominated by large utilities to a hybrid decentralized model with multiple
actors generating and supplying electricity. This represents a significant
shift in the generating mix, but large regional variations exist based on
countries’ current electricity grid structures and the extent to which
regulatory systems accommodate the changes in energy supply.
The drivers for decentralization vary, but currently, energy
leaders noted that increasing energy access is a key driver in many countries.
However, by 2025, distributed generation will be driven by environmental
sustainability targets and goals to increase energy security and resiliency.
In the near term, the shift to decentralization is raising
concerns that maintaining system reliability will become increasingly complex.
New approaches to system management, supported by enhanced information
technology systems, including smart grids, are required to manage energy
security challenges. It is envisaged
that increased decentralization and the increase in
penetration of distributed generation will challenge the reliability and
security of energy supply.
Expanding
opportunities
As countries evolve to a hybrid energy system, the role and
responsibility of energy incumbents is changing. This is raising concerns about
the flow of investments to maintain and expand new and existing infrastructure.
Incumbents such as utilities are facing declining market share and
uncertainties in tariff and pricing models to cover the cost of operating,
upgrading and maintaining the grid, as well as their uncertainties in the
ability to provide back-up capability. Energy policymakers and regulators are
presented with new questions about how to ensure the right level of investments
in necessary infrastructure.
However, the diversification and decentralization of energy
resources can make electrical systems more resilient. For example, based on
experiences during Superstorm Sandy, New York state has established a $40
million grant to create at least 10 microgrids as business model templates as
part of a focus on distributed generation in the future energy system as a
means to strengthen resilience.
Distributed generation presents an expanded opportunity to bring
electricity to the estimated 1.2 billion
people without access. In many developing economies, providing access to
electricity through a standalone off-grid system is often much cheaper and
faster than connecting households to the grid. As one energy leader noted,
"The central grid can be like shooting cannons at birds — bringing an
oversized solution to rural challenges."
Looking forward, policymakers must consider how off-grid
distribution generation will shape their energy system over the mid- and long
term. It is critical to set in place the right frameworks to stimulate the
growth of entrepreneurial companies providing off-grid distributed generation
solutions, mostly in the form of PV and solar, such as "backpacks" or
mini-grids and electricity services to low-income communities and households.
Distributed energy resources, especially renewables, support
progress on the environmental sustainability dimension of the Energy Trilemma.
Moreover, distributed generation provides the opportunity to reduce the
inefficiency of the existing large-scale electrical transmission and
distribution network (between 7-15 percent of energy can be lost in
transmission), increase energy efficiency of grid connected and support
enhanced demand management. Distributed generation also enables harnessing of
energy that otherwise might be wasted, for example, through a combined heat and
power system.
New
customers, new competitors, new partners
One implication of the growth in distributed generation is the
increasingly complex web of energy system actors. To succeed, all actors in the
energy sector must respond to new customers, new competitors and new
partnerships across the sector. In an increasingly crowded marketplace, the
providers most likely to capture a competitive position will be those that can
offer customers choice in accessing or using energy or offer ways to simplify
customers’ lives.
Responding to these challenges is complicated by the pace of
regulatory change that will affect who and how businesses can participate in
the energy market. Will regulatory policy move at a pace that allows the
private sector to capitalize on new opportunities and meet rising customer
demands?
In many countries, regulatory frameworks are trying to catch up
with technology options and shifting energy users’ demands. As the energy buyer
at one large manufacturing company noted, "Regulatory structure and
utilities are simply not evolving fast enough to meet the needs of the changing
power system."
Such fundamental change will not all be smooth and will call for
serious thought from governments. Distributed generation is presenting new and
fast-developing opportunities to balance the energy trilemma. Policymakers must
move quickly to seize new opportunities in meeting their countries’ energy
needs. Developing the right energy framework in the face of shifting technology
won’t be easy energy will remain a space where political and technological
disruptions meet.
UPDATE
UPDATE
Future Gas Series
EUA believes
that the only sensible, cost-effective and deliverable solution, for the vast
majority of homes, is to decarbonizes the hard-to-tackle heat sector by
“greening” our gas. The energy trilemma – a phrase that rightly describes the
difficulty in balancing the competing demands of affordability, reliability,
and sustainability – should be set against the UK’s particular needs.
There is no easy option for the UK. All means to decarbonize will cost consumers, but it is imperative to keep these costs to a minimum by utilizing existing assets wherever possible. As a result of natural gas abundance, the UK has the world’s leading gas grid infrastructure in place, directly supplying the energy to heat 85 per cent of UK homes. It would be a travesty not to use this existing infrastructure as part of the solution to the trilemma, and “green” gas, including biomethane, BioSNG and hydrogen, could be the key
Heat demand is,
not surprisingly, seasonal, but its peaks during the winter either need to be
met by supply, or people will go cold, and no politician I know wants that.
Switching away from gas heating will mean households face considerable up-front
costs, which are simply unaffordable. Not to mention the upheaval as heating
systems are ripped out.
http://www.brinknews.com/can-energy-be-secure-affordable-and-sustainable-as-the-sector-transforms/
ReplyDelete