Europe’s electricity industry looks to decentralize

Steve Hodgson

In a week in which the Intergovernmental Panel on Climate Change (IPCC) is calling for the near decarbonization of electricity generation, Europe’s electricity industry is already clear about its job.

‘Europe today is facing the fundamental challenge of shifting from a system of large-scale, centralized, predictable power generation to a system in which generation capacity is becoming more decentralized and intermittent.’ Not the words of a campaigner for small-scale renewables, but those of Hans ten Berge, Secretary General of Eurelectric, the European trade association for the electricity industry, mainly electric utilities and network operators, as quoted in Intelligent Utility.

Ten Berge is talking mainly about solar and wind power – the share of renewables in Europe’s power system is projected to rise to 35% percent by 2020, largely driven by the EU’s own ambitions to tackle climate change. But he goes on to describe the changes needed within Europe’s electricity industry to accommodate this without adding unacceptable costs to consumers, and avoiding major electricity system disruption.

Accommodating more decentralized generation will require: ‘a fundamental rethink of today’s system and market design,’ says ten Berge: principally completion of Europe’s integral energy market, including the building of new interconnections across national borders, so that new generation capacity is built and used where it makes sense. Solar in southern Europe, wind further north and offshore. Some of this looks like more centralized, though renewables-based, plant with additional transmission capacity. However, Eurelectric also calls for changes to the downstream side of the business – smarter grid infrastructure and management, which would allow network operators to integrate more small-scale and local generation into the system.

There’s nothing very new here – at the highest level, Europe’s electricity industry understands the need for decentralization, so that local energy projects contribute a significant proportion of local energy needs, and how it might get there. And of course utilities themselves will be major developers of decentralized capacity.

The US, however, may be slightly behind the curve. The US Electric Power Research Institute (EPRI) launched a study earlier this year on the transformation of electricity networks, noting that: ‘the rapid rise of distributed energy resources – such as rooftop solar panels and high tech microgrids – could change the structure of the electric grid.’ EPRI suggests that, even as these technologies rise rapidly, very few organizations have looked at how they could be integrated into power systems so that customers can enjoy the benefit of both the central power system and the distributed technologies in the most cost-effective way. Perhaps the Americans should look to Europe.

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