Energy Transition Handbook 2021 - Flipbook - Page 6
Energy transition and power
Power markets are moving from power generation being based around large,
synchronous fossil fuel or nuclear, centralised, transmission connected, baseload
generation assets to a world with significantly larger numbers of smaller, more diverse,
decentralised, distribution connected or behind the meter, intermittent and baseload
generation assets contributing to energy security and the generation mix.
This is being driven by the increasingly widespread
deployment of distribution (and behind the meter)
connected renewables, in particular, solar, wind,
biomass and energy from waste assets and by
an increase in the deployment of distribution
connected flexible baseload peaking plants
(eg. diesel or gas reciprocating engines or open
cycle gas plants).
The pace of change shows no sign of abating.
We are entering a world of smart assets and
smart grids, with increasing digitalization,
through exponentially increasing connectivity,
data collection, aggregation and “big data”
analysis. This will enable the creation of new
solutions that automate active energy and asset
management, facilitate demand side response,
reduce friction in the markets, maximise efficient
use of energy network infrastructure and change
the role of system operators and utilities.
Aggregation is allowing smaller power assets to
be operated at larger scale to access a broader
range of revenue generation possibilities.
Battery and energy storage is allowing increased
opportunities for wholesale price arbitrage and
system cost avoidance through structures like
peak shaving. Blockchain offers great potential for
wide access to fundamental energy market data,
faster transaction processing and settlement and
disintermediation of the energy markets. Smart
meters and smart devices are increasing the role
of demand side response in balancing the system.
Active energy management and “energy as a
service” solutions are improving energy efficiency.
Distribution network operators are beginning
to think of themselves as distribution system
operators with a more active role in balancing
their networks. And the electrification of transport
and heat offers the potential for huge growth in
use of the electricity system.
“Hogan Lovells has an important
knowledge of all electricity
Projects & Energy, 2018