We are in the middle of a renewable energy revolution. Energy markets are constantly evolving and current trends demonstrate the world is moving towards high renewable energy systems; the share of affordable renewables and energy storage is rapidly increasing, while inflexible power generation (such as coal and nuclear) is leaving the market. All the tools, technologies and capabilities to build 100% renewable energy systems already exist.
As renewable energy prices keep dropping and energy storage is developing tremendously, it makes sense to strive for high renewable power systems.
A 100% renewable energy future is Wärtsilä’s vision and nothing prevents us from starting the journey towards an affordable, sustainable, and reliable world with 100% renewable energy already today. It is all about the path we choose to take.
Renewables are eroding the existing utility business model where large centralized power stations were the money makers and it was all about economies of scale. Now the utility businesses face challenging decisions, as the affordable renewable energy is disrupting the existing business model, and utilities must make investments in generation that will guide their strategy for years or decades forward.
Why is this happening? Renewables have been dropping in price and today they are at a tipping point where renewables have reached a grid parity with traditional inflexible power generation. Subsidies are not needed anymore. Solar prices alone have dropped 73% in the past 8 years due to advancing technology – and will continue to drop. According to Bloomberg New Energy Finance (2017), wind and solar cumulative installed capacity will increase from 14% in 2017 to 48% in 2040.
With renewable energy sources increasingly entering the power system, renewables are pushing inflexible power generation out of the market.
Traditional baseload generation is not flexible enough to handle the variations renewables bring – one minute the sun can be shining, while it is raining the next. It does not make economic sense to run traditional baseload generation with renewables, therefore the investments in inflexible coal or nuclear have decreased. This transition is seen globally, where investments are rather made in flexible power generation that will have a role to play in future power systems.
Although prices of renewables are declining and make economic sense for power producers, they bring challenges to the power systems as they have daily, weekly, and seasonal variations. Flexibility is the key to ensuring reliability in high renewable power systems. Flexible engine power plants together with energy storage enable the integration of renewables. Integrating various assets in an optimal way will be essential, meaning energy system integration becomes a crucial part of future power system.
Transitioning to a 100% renewable energy system will not happen overnight.
Each continent, country and city has their own optimal path towards that future. Wärtsilä can create optimal paths with their customers towards a 100% renewable energy future. As the leading global energy system integrator Wärtsilä understands the role of different technologies as part of their customer’s power systems, and puts the assets of the customer together through software, full EPC offerings and global services capabilities. The technology needed for a 100% renewable energy future are available already today.
Transitioning towards a 100% renewable energy future
The energy landscape is in transition towards more flexible energy systems. Renewables are dropping in price, pushing inflexible power generation, like coal and nuclear, out of the market. Renewables are eroding the existing business model where centralized large units made the money and it was all about economics of scale. Now businesses face challenging decisions, as investments define and lock in the company strategy for many years. Wärtsilä is leading the transition as the Energy System Integrator – they understand, design, build and serve optimal power systems for future generations.