The energy transition started out as a struggle for commercialization between different technologies. Photovoltaic (PV), wind and concentrated solar power (CSP) all had their adherents, but they were clearly different industries, with little overlap.
This approach helped cleantech sectors such as PV and wind to achieve significant scale and high levels of efficiency, thanks to focused research and development and the evolution of highly integrated supply chains.
But now the idea of a more holistic approach is gaining traction. And this emerging all-round vision could be the key to ensuring that the renewable energy industry grows in a balanced, profitable and effective way.
The need to mix and match technologies is becoming clearer as renewable energy achieves scale on the grid. This is obvious from one technology, PV, which is expected to become a major contributor to grid power in the future.
PV is lightweight, easy to install and cheap: prices have fallen by 80% since 2008. It is also one of the easier technologies to scale and that makes it a great choice as an alternative energy source.
But it has a very clear downside: when the sun is not shining, the source of energy disappears. So, while solar power is economical, it is pretty much worthless if there is no sunlight. There are two ways to get around this limitation, and they both involve other clean technologies.
One is battery power. Lithium-ion batteries can store the electrons produced by solar panels, to be used when the daylight is not available. Another is CSP, which in high-irradiation areas can store massive amounts of energy as heat in molten salt tanks.
Wind power, the other technology that is set to do the heavy lifting in the decarbonized grids of tomorrow, faces a similar challenge. No wind equals no power. In a best-case scenario, wind power could run at around 50% of the time.
Here again, though, the limitations of the technology can be overcome by adding battery storage, so wind can serve demand consistently despite any changes in resource.
It is obvious how these technology combinations can benefit the energy system as wind and solar start to make up the bulk of generation on the grid.
But the value of taking a system-wide approach to clean energy portfolio planning kicks in even before then, because of what is called price cannibalization. When clean energy is in short supply, you can afford to produce as much of it as possible.
Once there is enough to cover demand, however, there is not much value in adding further generation capacity since it will just end up generating at the same time as all the existing assets. Each additional megawatt of power eats into the limited profits available to all.
This is a problem because the system may still need the extra capacity, albeit at a different time. Take a market such as California, which has lots of solar energy.
Californian PV panels reach their maximum level of production around midday, and output starts to drop drastically around the time people get home and switch on their air conditioning systems.
The result is that California’s gas-fired plants sit idle for most of the day but then have to ramp up sharply in the evening, creating a supply and demand pattern that is known as the duck curve.
It is important to note that solar power in California does an incredibly good job of reducing daytime emissions in the power sector. But it could do an even better job if some of the solar output was saved for the evening, and for that you need batteries as well as more PV.
Beyond this clear benefit of joined-up thinking, there is growing interest in what is referred to as ‘sector coupling’—the increased integration of energy end-use and supply sectors with one another.
One example of this is in vehicle electrification, which could ultimately become a major source of electricity demand on the grid as electric cars rise in popularity and their integration with power grids becomes a matter of priority.
Today, electric vehicles draw power from the grid whenever they are plugged in, but a smarter approach, given that most cars sit idle for around 95% of the time, is for them to charge up when energy is cheapest and most plentiful.
In a market such as California, that might be during the day, when PV output is highest. At Pacific Green, we believe all markets should push for daytime charging via PV, which is why we are keen to promote the use of solar canopies in car parks.
Another obvious sector coupling idea is to combine solar power with desalination. Water scarcity is often greatest in hot, sunny climates, which are ideal for solar power.
The relatively high value of desalinated water means it can justify investment in a CSP plant to power round-the-clock operation.
Alternatively, CSP can be hybridized with PV so the setup benefits from the lowest possible cost of electricity during the daytime but can still operate throughout the night. In future, the same concepts could be applied to the production of green hydrogen or low-carbon ammonia.
These are just some examples of how whole-system thinking can greatly improve the value and prospects of clean technologies. But there is one thing still missing from many cleantech developments, and that is the ability to apply a joined-up approach in the first place.
Renewable energy asset owners are only just beginning to talk about portfolio diversification and many developers remain wedded to the sectors that they grew up in.
There are few companies out there that can claim to have a track record not only in multiple sectors but also in bringing them together. That’s where Pacific Green can offer a real value add.
From electric vehicle charging and energy storage to PV and CSP, we have the experience in all areas of cleantech and a visionary approach to making them work together. For more information on our presence and capabilities, speak to us now.