As electrification continues to rise and the integration of intermittent renewable energy sources grows, the challenge of ensuring adequate dispatchable capacity has become paramount for system operators across Europe. A recent discussion at the Enlit Europe conference brought together experts to explore practical strategies aimed at enhancing system flexibility and securing the necessary capacity to accommodate future demand.
The urgent need for a concerted approach was underscored by Tilman Bechthold, Vice President of Research and Development at RWE Power AG. He urged against prolonged theoretical deliberations regarding the amount of dispatchable power required, stating, “I think we need a pragmatic approach. It could take years to calculate how much dispatchable generation we need…it’s a moving target and a moving exercise. I wouldn’t put too much intellect into guessing how much we really need.” Bechthold projected that electricity demand in Europe could surge by 66 to 100% by 2050, necessitating a diverse portfolio of technologies including natural gas, nuclear, biomass, hydropower, hydrogen, and power-to-x solutions.
Louis Strydom, Director of Growth & Development for Europe and Africa at Wärtsilä, supported this sentiment by highlighting the importance of timely investment in technology rather than getting caught up in the specifics of individual solutions. He remarked, “The one challenge we see [is] it’s very convenient to compartmentalise solutions or technologies [but] it all forms part of an integrated grid.” According to Strydom, achieving a dispatchable system requires a careful selection of technologies that can fulfil multiple roles.
Charlotte Johnson, Director of Markets at Kraken, redirected the conversation towards the necessity of incorporating consumer flexibility into the energy transition. “The bit that no one wants to talk about is consumer flexibility…that’s really important when we think about the transition because to get to net zero…you really need dispatchable capacity that’s low carbon and that’s going to have to include the consumer,” she asserted. Johnson emphasised that customer engagement is vital, noting the disconnect many consumers have with their utilities, and called for a more transparent value proposition to foster trust and understanding.
The panel also examined the performance of existing capacity markets in guaranteeing power availability. Bechthold commented on the capacity market’s imperfections, saying, “The capacity market is not perfect but it’s the best solution I can see at the moment.” However, he and the other panellists acknowledged the need for adjustments to these markets, particularly the lack of incentives to encourage genuine flexibility.
Strydom indicated that market mechanisms should adapt to include shorter settlement intervals, explaining, “One of the most important things is…that our settlement windows need to get smaller…when those settlement windows become smaller you can actually see which technologies provide the best value.” Johnson reinforced the call for such reforms, pointing out that markets currently favour fossil fuel generators without providing clear signals to procure low carbon assets.
She also highlighted a significant issue associated with the UK’s national pricing system, which fails to account for the geographic disparities in energy generation and demand. “That means that 40% of wind generation comes from Scotland, 10% of the country’s demand comes from Scotland…there’s no incentive for people to generate at the right time or consume at the right time,” she explained, citing that over £1 billion was spent last year to rebalance energy flow between northern and southern regions.
In light of these discussions, Johnson proposed a model inspired by Italy’s Maxi scheme, which involves subsidies for battery storage tied to capacity in different areas, ensuring that assets are strategically located where demand is highest.
In terms of operational management, the panel members acknowledged that optimally handling consumer assets is essential for enhancing system flexibility. Johnson recounted an instance in early October when the UK faced its first capacity warning in two years, necessitating costly unwinding of interconnector trades to maintain system integrity. “I think there’s a real value for all forms of flexibility and as a system operator or grid operator or market, you should just be picking the cheapest,” advocated Paweł Wróbel, Director at the Polish Electricity Association PKEE, referencing the need to always pursue the most effective supply strategies.
Wróbel further emphasised the unpredictable nature of market evolution, which he considers critical for informing new investments aimed at decarbonising Poland's power system. “We need to…guarantee how to secure supplies in the most efficient way and at an affordable price for consumers,” he stated, encapsulating the shared goal of the panel to navigate the complexities of this dynamic energy landscape while preparing for future demands.
These discussions reflect a growing awareness among energy leaders regarding the need for an integrated approach to energy generation and consumption, emphasising collaboration across technologies, market structures, and consumer engagement.
Source: Noah Wire Services