DNV GL survey: 82 percent of global industry respondents say electricity system can be 70 percent renewable by 2050

New economic metrics for renewables required to converge the demands made by policymakers and system operators

• Rebalanced rules needed to address the challenges and opportunities of developers and system operators in the move towards a high renewables system
• As current industry thinking still can be too siloed, new entrepreneurial models will expand the electricity business into the ‘internet of energy’

In ‘Beyond Integration: Three dynamics reshaping renewables and the grid,’ a recent global industry research initiative, DNV GL, the world’s largest resource of independent energy experts, gathered views from over 1,600 energy sector participants across more than 70 countries. The study addressed key questions on how to best move forward the integration of renewables into the global electricity grids to ensure the future of electricity. The survey points to broad global consensus that a renewables based electricity system can be achieved. Eight out of 10 respondents believe that the electricity system can be 70 percent renewable by 2050. Almost half of them believe this can be achieved in the next 15 years.

Questions included asking respondents to consider a scenario in which renewables account for 70 percent of power sector generation. How likely did they feel this was to come about? What timeframe might they assign to such a scenario? To whom would the scenario pose challenges? To whom might it offer opportunities? The report includes analysis from chief author Fliss Jones and insights from DNV GL’s energy storage expert Dr. Ali Nourai and future grid expert Peter Vaessen. The analysis sheds light on three dynamics reshaping renewables and the grid for the energy transition: convergence of metrics, rebalancing of rules and expansion of horizons.

David Walker, CEO DNV GL-Energy: “DNV GL’s analysis of these findings concludes that the solution for a high renewables future demands a dramatic change in the industry’s approach to the integration of new technology. We need to adopt more collaborative approaches and go beyond old metrics, beyond old rules and beyond old silos. A shift away from a paradigm in which renewables are considered a nuisance to be accommodated to one in which the true potential of renewables in balancing and securing grids is unlocked. The debate needs to move ‘beyond integration’. DNV GL is taking the broader view and opening that discussion.”

Report findings are organised around three dynamics, which DNV GL sees reshaping not just electricity, but the entire energy sector:

1. Convergence - New economic metrics must converge the needs of policymakers and system operators
   Findings: The survey indicates that policymakers and system operators place diverging demands on renewable developers. Qualitative data stress that securing political will depends on affordability, while in a high renewables future developers must also engage with the increasing system operation challenges.
   Analysis: Greater reliance on whole-system assessments of power system costs will allow a more representative picture of the affordability of decisions to be taken. The metric of market value, which encompasses revenue and cost at a system level, will better converge developer incentives with the needs of system operators.
2. Rebalancing – New rules are needed to rebalance the opportunities and challenges for developers and system operators
   Findings: Developers, independent power producers and original equipment manufacturers are relishing the opportunities brought about by the shift to a high renewables system, while system operators and utilities identify themselves as being challenged by the transition.
   Analysis: New rules will rebalance the opportunities and challenges for developers and system operators. Grid code refinement to maximize the capabilities of renewables can often deliver substantial system benefit at minimal cost. However, this should be handled carefully in which a heavy-handed regulatory approach should be avoided and market-based solutions are important as well.
3. Expansion – New entrepreneurial solutions will expand the electricity business into a true ‘internet of energy’ Findings: Current high interest in energy storage, which 66 percent of respondents select as a top 3 lever for a high renewables future, is an example of the increasingly blurry lines between power, transport and heat. Meanwhile, respondents’ emphasis on smart grids underscores the role for IT in helping to manage the variability of renewables. The electricity sector is becoming more interconnected with the wider energy system, and also with newer sectors such as IT. Analysis: Where policymakers often see energy in a holistic sense, industry thinking still can be too much focused on the electricity sector alone. Here an expansion of horizons is needed, to go beyond old silos and into the ‘internet of energy’, where smarter real-time operational controls are used to coordinate input from distributed sources of supply and demand, which span power, transport and heat.

Join our webinar
Join DNV GL's Fliss Jones, principal author of our new Beyond Integration report, on March 24, for an exclusive webinar to explore the findings of the research and their startling implications for electricity market participants across the world. Fliss Jones will be joined by leading Energy Storage expert Dr. Ali Nourai and Future Grid expert Peter Vaessen, who will explore what the survey findings mean for the future of electricity.