Electricity networks will be transformed by variable renewable energy generation, which will increase price volatility. Companies must be more flexible in their electricity consumption to negotiate these developments.
Fremont, CA: It will be necessary to electrify energy consumption and deploy renewable energy generation at a rate substantially greater than what people are currently doing and far more significant than what governments are now aiming for, if they are to attain net-zero emissions by 2050. Nonetheless, the process will be fraught with difficulties: the widespread use of renewable energy sources, particularly solar and wind, will considerably impact both the physical and economic properties of electrical grids and markets.
The impact that a high percentage of variable renewables will have on energy-consuming companies and the ability of countries to recruit them has not yet been adequately realized. The fact of the matter is that more variable electricity costs will become increasingly prevalent.
The electrical networks and markets will undergo significant upheaval, providing a competitive advantage to businesses that can be more flexible in utilizing electricity. This goes above and beyond the conventional demand response. It will be possible for such organizations to benefit from the price volatility that comes with increased penetrations of variable renewable energy sources while also enhancing their resilience to shocks by managing their assets as electricity traders rather than electricity consumers. Companies that maintain a singular focus on full utilization will be required to pay a premium to guarantee against volatility or risk of being held slave to it in the future. The fact that they are doing so will allow them to boost the proportion of renewable electricity that they actually consume, as opposed to the proportion of renewable electricity that they acquire, in addition to the economic benefits.
When it comes to enabling the changes that are required in industrial energy consumption, both governments and electrical markets will need to do more to address the issues that they are facing. Governing bodies and electricity market designers in nations on the frontlines of the energy transition have already begun to shift their priorities in order to incorporate a greater proportion of renewable energy in their power grids. Both governments and electricity markets will need to do more to address the issues they face in order to facilitate the improvements that are required in industrial energy usage.
