Energy industry transformation and challenges

trasformation of electricity generation

The energy industry is undergoing huge transformation and facing important challenges. Focussing on the electricity sector, it is not just distributed generation and non programmable renewable energy sources, nor the new opportunities linked to demand response. Over the last decades we passed from a model based on one or few large companies dealing with generation, distribution and supply to a liberalised market with a growing role played by small producers (prosumers). This is dramatically changing the electricity market and the way it works. I made some considerations at the AIEE symposium “Current and Future Challenges to Energy Security“.

My presentation opens by highlighting the path towards 2030 and the role of energy efficiency and renewable energy sources. I then show the steps of the transformation of the electricity sector from monopolies to distributed generation and the new demand response options made available by IoT and storage.

Prosumers will thus face many options to satisfy their electricity demand: traditional supply, power purchase agreements, self production (RES and cogeneration), usage of storage and of interruptible or manageable loads, production and usage of biofuels, and energy efficiency practices applied both at site and supply chain level.

This will require sophisticated management system, capable of selecting the most effective solution minute by minute, and the capability to develop strategies and action plans based on the energy efficiency first concept. One of the risk is indeed that managers will find easier to think about distributed generation than to consider energy efficiency (which is more complex and fore many reasons less desirable, even if more convenient and needed for the Paris agreement goal).

Another important point refers to the reliability of the power generated by small distributed plants. The analysis of the data of the photovoltaic production in the last years shows what can happen when a former industrial activity is managed by people and companies dealing with a different core business. The risk is that the plants will produce less than foreseen due to lack of O&M, without the owners even noticing it. With photovoltaics aiming at producing 50 GW in 2030 such issues will become significant.

Thus the supply of O&M services to distributed plants – better if integrated with the offer of energy efficiency and power generation system with guaranteed performances – can become one of the business of the future energy industry.

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