While 2020 has obviously been challenging on many fronts, one of the surprising upsides we have seen in the power industry is that the vision of a very high renewable energy penetration grid is not only technically feasible, but it might arrive faster than anyone anticipated. I wrote in Utility Dive this past August, detailing the experience of electricity markets in Europe during the pandemic, which was characterized by large shares of renewable energy on the grid and the shutdown of much of the continent’s baseload generation capacity.
A key component of this transition is the deployment of flexible generation – primarily grid-scale batteries – that allow for the optimization of these renewable resources. At Wärtsilä, our focus has been not only the deployment of these flexible storage assets but most importantly their optimization through asset-level and portfolio control.
This strategy has led to many interesting conversations with our customers, allowing us to collaboratively find new ways to increase the value of energy storage assets. One of the most exciting, and the key to the growth of energy storage as a market category, is the ability to leverage artificial intelligence for automated bidding of stored renewable power into competitive electricity markets.
This has the potential to be a game-changer for energy storage, mitigating the risk from merchant revenue streams atop the already clear benefits provided by grid-scale batteries.
The market is taking notice. In my conversations with IPPs, I am increasingly hearing that operators are rethinking their trading strategies to incorporate storage and take advantage of these potentially lucrative arbitrage opportunities. These customers typically fall into two categories.
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