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Symposium 2010

Proposal - Towards Efficient, Clean, and Innnovative Electricity Markets

The Challenge

In principle, solar and wind are more than enough to deliver any amount of energy that the world’s population might need. But these sources are usually best exploited in areas that are far from ce ...

In principle, solar and wind are more than enough to deliver any amount of energy that the world’s population might need. But these sources are usually best exploited in areas that are far from centers of demand. It is technologically challenging to transport electricity over large distances and even more to store it. As a consequence, electricity markets have tended to develop as regional markets.

1. By 2050, electricity should provide a much greater share of our energy needs and should be produced entirely by renewable energy sources.

Electricity is the most efficient energy carrier, and can be produced by renewable sources, so a sustainable energy future requires increased electrification – of car and train transportation, for example, and buildings. It requires sophisticated efforts to reduce and manage demand. It also requires a massive effort to drive renewable energy into the system, from large-scale solar, wind and geothermal projects and from decentralized production.

2. Success will require development of super-smart integrated grids in key regions.

There is no need for a fully integrated global electricity market, connecting Latin America to Europe, for example. But a shift to renewable energy sources will require fully integrated grids in key regions such as North America, Europe, and China. Those grids must be super-efficient, to connect markets to often distant large-scale renewable energy sources. Europe, for example, needs a grid that can connect its markets to solar concentrated power in North Africa and offshore wind in the North Sea. Southeast Asia needs a grid that can help it tap the geothermal resources of the “Ring of Fire.” The grids must also be “smart”, able to manage the variable production of renewable sources, to tap decentralized sources such as residential solar panels, and to manage loads.

3. A shift to renewable energy requires investment in research on storage.

The nature of wind and solar energy, in particular, is very different from other energy sources. They are variable. Although we know from research that wind power and solar are negatively correlated – if the wind stops blowing there is often sunshine and vice versa – substantial investments into energy storage and planning are necessary. Renewable sources such as biomass, geothermal, hydro pump storage and solar concentrated power (with molten salt storage technology) need to deliver back-up. In later years, hydrogen production from excess renewable electricity can certainly add to the storage potentials.

4. Regional grids are only possible if we can break through current political barriers.

Construction of super-smart regional grids will require policies and regulation that facilitate the needed planning and investments. So far, national electricity regulators and often even regional regulators determine the fate of these investments based on their narrow national or regional mandate. Grid companies are often hampered by utilities on one side seeking to defend their incumbent (often unsustainable) energy production and fearing stranded investments, and regulators on the other side whose interest is to “keep the lights on” but only in their specific areas. Effective management of cross-regional and even cross-border trade in particular of variable renewable power is falling through the grid – literally!

5. We also must meet the needs of 1.5 billion people who have little or no access to electricity.

There are perhaps 1.5 billion poor people, often in remote areas of developing countries, who have no or only erratic access to electricity. Providing them with basic reliable and affordable energy services is a moral obligation. This may often best be done through decentralized, off-grid solutions.

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