Network February 2020

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NETWORK / 42 / FEBRUARY 2020 RENEWABLES Predictions for the year ahead Jan Andersson, senior analyst, market development at Wärtsilä, gives his predictions for the year ahead and discusses three key things he would like to see from the new UK government H ere at Wärtsilä we develop smart technologies and complete lifecy- cle solutions for the marine and energy markets, maximising the environmental and economic performance of the vessels and power plants of our custom - ers. With this background and specialist field of knowledge we have some recommendations in mind, when looking to the future, for the new Conservative UK government. Firstly, the UK should power on with energy storage by re - moving the 50MW threshold and allowing planning decisions to be determined by local authori- ties rather than seen as nation- ally significant infrastructure. Secondly, solar is a proven and effective technology but is being hampered by its exclusion from the Contracts for Difference (CfD) process. Changing that could be a step change for the industry and will remove some of the merchant risk that cur - rently exists. Thirdly, the latest cleared capacity payments have been extremely low and throw into question whether the Capacity Market mechanism is the right approach for the UK to take, at this time. As the number of re - newables on the grid increases, we must back them up with flex- ible forms of generation, so the market should reward flexibility and not capacity. If you have a functioning market, there should be no need for a capacity mechanism. Looking to the future We would expect the energy storage industry to continue to mature in 2020. The fast frequency response market has already become saturated with battery assets, so it's excellent news that the National Grid ESO is, next year, launching a new faster-acting frequency response mechanism to try and better meet evolving needs. The blackout back in August 2019 was Britain's biggest for a decade and has had wide- reaching implications for the energy sector. National Grid are accelerating plans for new safe - guards to avoid further black- outs and we feel that energy "We must thoroughly assess our power system and electricity generation so that investments and developments are made at the right time and in the right order" support from all major political parties in the technology as part of their manifestos. Post-elec- tion, those pledges need to now be turned into action, as the next parliamentary term could be crucial in determining the importance of hydrogen within the UK economy. Here are three key trends in the energy industry we can expect to see over the next decade: we are already seeing renewables starting to become the baseload in countries like the UK and this will only increase over the next ten years as we will see wind and solar become the dominant force in energy generation. They must be supported in the right way, using energy storage and flex - ible forms of generation As renewables become baseload, the role for thermal generation will change. The focus must shi™ to gas engines which can provide flexibility for the grid and ramp up and down quickly to respond to the changes in renewable genera - tion. This technology, combined with energy storage, will enable us to move towards a 100% renewable future Sector coupling will become increasingly essential as we look to decarbonise not just energy, but heating and transport too, with each of these sectors likely to become more electrified as we move towards net zero. We must thoroughly assess our power system and electricity generation so that investments and developments are made at the right time and in the right order, especially as we factor in the future potential of hydrogen- based fuels generated from renewables. storage could have a key role to play within that. There is a growing momen- tum for hydrogen-based fuels in the UK, demonstrated by the DECARBONISATION OF TRANSPORT DECARBONISATION OF HEAT FUTURE OF FLEXIBILITY

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