The Energy Paradox: Accessibility and Security of Energy Supply

With more energy sources available to organizations than ever before, how can accessibility and security still pose challenges?

It’s a topic that will be explored in detail at the upcoming ProcureCon Indirect Europe conference. And renewable energy will be a particular focus, not just because of its widely known environmental benefits, but also due to the growing awareness about supply security and the expanding availability of green energy.

Here’s a short preview, however, for those who won’t be in Amsterdam.

Most electricity systems today in Europe are centralized, all depending on conventional generation units. These electricity systems have been effective in serving demand, and providing predictable and stable energy supply. They have also been performing well in saving money and providing reliability at a low cost.

So for many commercial and industrial companies, security has not been a significant issue.

But the transition toward sustainable energy is changing the requirements of classic electricity systems. Governments and markets are actively seeking innovations to tackle the new challenges of climate change through clean technology deployment and a low-carbon agenda. 

To be able to integrate the increased volume of electricity from intermittent renewable sources like wind and solar, electricity systems need to become more flexible and dynamic. A conventional generator would be able to operate close to its maximum output for most of the time, allowing for unplanned outages. Depending upon technology and location, however, renewable output may or may not be available during peak demand periods. In many cases, the contribution to system reliability may be lower than for conventional stations.

Preparing and improving electricity systems to cope with the changing generation mix and growing renewable penetration will inevitably result in additional costs and impacts. That said, it also opens up new opportunities for consumers. Demand-side response, for example, can allow companies to participate in the electricity system while reducing the need for new energy infrastructure through better system management.

The current energy transition also drives focus towards a user-orientated approach to meeting energy requirements. Examining consumer needs and considering the user in their local context helps the design of a more local, efficient and less costly energy system, one where each technology and infrastructure option is considered on its merits.

In recent years, communities have decided to reduce the sole dependency of coal and gas by introducing ambitious, 100-percent-green targets; their motivation is generally driven by economic and regulatory factors as much as climate change.

The renewable energy cooperatives (REScoop) movement has targeted decentralized storage and demand response, along with microgrids. These activities play an important role in the transition to a decarbonized and decentralized energy system, and eventually, through new European Union legislation, REScoops could be recognized as a vital part of the energy production cycle.

The debut of REScoops and crowdfunding are also a big step toward making renewable energy accessible to everyone. Just like aggregated power purchase agreements (PPAs). Although energy suppliers and large consumers have historically used renewable PPAs, the desire for green energy has not been limited to particular types of enterprises or geographical areas. With an aggregated PPA, however, committed companies jointly increase their purchasing power and earn greater economies of scale.

These schemes are also suited to renewable energy projects, which can struggle to access financing from traditional sources — often because they require too much money to get a bank loan without having a track record, but too little money to be of interest to an investment fund that may not find it worth the time to perform the required due diligence.

With the expansion of sources in the generation mix, businesses have more and more options to switch to clean, green resources. Under voluntary carbon reporting, the difference between choices depends on their reliability, which is causing concerns in the absence of a clear guidance for renewable claims. As a result, many companies seek the support of experienced professionals to analyze the right fit and generation mix.

Download the 7 for 2017: Global Energy Market Trends whitepaper to read about other development affecting the energy market.