The #REMforum 2018, the 9th St. Gallen Forum for Management of Renewable Energies, addressed the issue of decentralisation for the power system, mainly focusing on the role of electric mobility.
The #REMforum 2018, hosted by the Chair for Management of Renewable Energies at the University of St. Gallen, has been a fruitful and very engaging event for all the participants, which represented the visions and interests of different stakeholders of the energy sector, from energy utilities, to manufactures, from academia to NGOs, and from media to consultants. The fil rouge of the two-day conference has been decentralisation, with its potential disruptive role for energy systems and stakeholders, and constructive discussions about how market players see and are addressing its development. The Global Energy Facts team had the opportunity to attend for the second year this very forward looking event, gathering many interesting insights and valuable opinions about the expected development of the power system.
Decentralisation & distributed generation
The expected future role of distributed generation, mainly based on intermittent renewable energy sources (RES), and the issue of integration in the distribution grid, is giving raise to discussions both at policy and technical levels. In particular there is quite a lot of debate on its impacts on the existing grid operation, such as the possibility of reversing the power flow from distribution to transmission networks.
In the European Commission (EC) “2030 energy & climate framework” one of the “enabling conditions” for decarbonisation is creating the infrastructural and market/policy setting to be able to harvest distributed RES. Those conditions refer to issues like: permitting procedures and higher and timely grid investments (high and low voltage, but also smart grids, storage, electricity demand response systems).
In one of the panel discussions of #REMforum 2018 second day four different market actors, Blockstrom, ENGIE, Fortum and Ørsted (DONG Energy till November 2017), discussed how they are reacting to the increasing decentralisation and their views about the future role of decentralised systems. It resulted that there is a general agreement that traditional fossil fuelled (coal and natural gas) power plants have recently become or are becoming “uninvestable” in many areas of the world, notwithstanding they still are the backbone and main source of electricity generation of most countries.
The main and biggest incumbent sitting at the table, ENGIE, pointed out the recent divestment choices of the company, in particular in South America (Chile), and their “green” plans for the future, although we shouldn’t forget that more that 60% of the Group electricity generation capacity (103 GW in total) is still based on fossil fuels. Compared to ENGIE, the other panel operators already are in a much advanced stage of decarbonisation, and they are also smaller and more dynamic companies, in particular the start-up Blockstrom, which provides services to support and enable self-consumptions.
The panel discussants also stressed the fact that a poor economic performance, coupled with environmental concerns, which is sometimes associated to some electricity generation assets, should progressively lead the market operators to closures (final decommissioning) rather than to sales.
But if there is a consensus about where the power sector and the investments are going, it seems to be less clear, and less predictable, how fast and how much the decentralisation will happen. For the new entrant Blockstrom decentralisation and distributed generation are at the heart of its business, were they see a very high potential, while bigger companies and incumbents are looking at these new market opportunities without losing their focus on centralised solutions.
Electric mobility at the hearth of decentralisation
But the #REMforum 2018 also looked into decentralisation from a different perspective, made up of two elements that are going to enable and support the deployment of distributed energy systems: electric mobility and digital technology. The other panel discussions, presentations and workshops of #REMforum 2018 were indeed focused on these two aspects, although in general during the two-day conference more space was definitely given to electric mobility.
Electric mobility in Singapore, China and India: #REMforum 2018 first day workshop
Electric mobility was also the focus topic of the #REMforum 2018 first day workshop, where high representatives from the Singapore Economic Development Board, the Center for Asia Business and Panitek talked about recent developments and future perspectives on the electrification of transports in Singapore, China and India.
According to the presenters, and also considering the International Energy Agency 2018 Global EV Outlook projections, the two Asian giants are probably set to drive the future of electro mobility: China already has a dominant position for the electrification of transports at global level, thanks to the dimension of its market as well as to the Government policies and regulations; but also India, where the technological and market developments are usually more driven by the private sector initiatives, rather than from the central Government, seems to be well placed to become a very important focal market in the near future. Furthermore, in some Asian countries, such as in particular India, could also which is lagging behind China in terms of socio-techno-economic development, technology leapfrogging could happen, increasing the already existing risk for Europe to be the laggard in this rising market opportunity.
Singapore is working a lot to modernise and decarbonise the transport system of the island, starting from the public transport, where a mix of different transport modes is under study. The very small South-East Asian city-state country is indeed in a good geographical and also economic position to be able to rapidly change its system, and it can also represent a good case study and investment opportunity for other countries.
Electric Mobility in #REMforum 2018 second day
The electrification of transport systems is considered by many researches and stakeholders as the main ways to reduce the emissions of the sector, but its success will mainly depend on the battery technology and recharging infrastructure developments. A proper and intelligent integration of the electric vehicles (EVs) can provide important services to the grid: for instance, as the number of EVs increases, and with that also the number of dedicated parking lots, “EV aggregators”, new market entities activing as intermediators between the EVs and the grid operator, could deliver grid to the vehicle (G2V) and vehicle to grid (V2G) support and integration services.
The V2G business models were at the centre of one of the workshops held in the afternoon of the second day, where the possibility to bundle a bunch of EVs in parking slots and providing services to the grid as a sort of “local community virtual power plant” was explained and analysed by three experts from Alpiq, SAK and badenova.
In the #REMforum 2018 panel about electric mobility the discussion was mainly meant to address the pace of development, which is still probably the main question for most of the stakeholders. But if trying to answer questions and make projections about issues like when, how much and where remains pretty tricky, looking at recent trends and what some companies are doing brings the discussion to a much more tangible and reassuring ground. The platform ElectricFeel seems to be doing pretty well in managing electric mobility systems, and today they manage a few thousands EVs in Europe. The combined mobility solution SBB Green Class provided by the Swiss railways shows how also non-road transport operators are seeing an opportunity in the road e-mobility business, and how combining different modes of “green” transport could be the winning solution. Prof. Dr. Boulouchos, head of the SCCER mobility, strongly highlighted the need to decarbonise our energy system, and how electric mobility is expected to play a crucial role in this, probably together with alternative fuels, for the transport sector: if there is no doubt that we need to change our transport habits and energy consumptions, the only doubt is about the energy mix to come.
The main barriers for the EVs diffusion that were mentioned by all participants remain the usual suspects: the higher capital costs of EVs, compared to combustion engines vehicles, and consumers fear and skepticism about the recharging infrastructure and distance range. For the higher capital costs the debate was pretty interesting, since notwithstanding that it is still a rea issue, the participants were agreeing about the fact that a higher CAPEX is usually paid back in few years by lower OPEX (coupled with incentives or variuous kind of deductions), and also, most of the EVs models proposed so far on the market were at least medium if not high profile vehicles.
The Global Energy Facts team is looking forward to the 10th edition of the conference, #REMforum 2019, 23rd-24th May! Save the date!
 Part of the International Management Institute at the ZHAW School of Management and Law