In this, our annual look back review and look forward preview of the major events and trends in the energy sector, we note the extremely unusual year that 2020 has been.Of course, Covid-19 has dominated the year and caused much pain and anxiety for many – our thoughts are with those have suffered and our hopes are also for all of us as we head into 2021.
The impacts of Covid-19 shone a spotlight on key issues in our societies, economies, work and so much more. In the energy sector we saw many things change or even slow but also many aspects of the clean energy transition that robustly continued at pace.
At this time last year we highlighted (as many others did also) 2020 as a year of transition into a new decade with a variety of hopes and expectations for the energy system. We were looking at the prospects of building on a past decade of supportive policy, regulation, investment and innovation in the clean energy transition. This year, there is still that same hope but a dawning reality of both the seriousness of the developing climate effects and the scale of the challenge to transform energy and other climate impacting sectors.The focus needs to be sharpened further on turning words into action, investment and implementation in this climate decade.
Below, we provide some views on what we are seeing in key parts of the energy transition generally but also where the clean, decentralised, customer-flexible energy market is heading. Nothing that we have seen suggests any lessening of the 3D trends (decarbonisation, decentralisation, digitalisation), and in fact there is much that suggests that the 3D trends are still accelerating.
Policy & Regulation
We expect regulators to speed up the process of implementing investment, incentive, stimulus, market and system change orders that reflect the growing climate change urgency. In the world of distributed energy, we expect that to take the form of market opening to much more customer and Distributed Energy Resources (DER) flexibility, recognising the need for cost effective DER integration solutions that properly value and harness DER contribution to an efficient, clean, reliable energy system.
We expect attention to turn to the speed and quality of clean and smart energy execution as the evidence base grows for the best ways to deliver renewable energy into an optimal ‘whole system’.
Technologies & Solutions
Some of the expected innovative deployments of technology and new solutions in smart energy were delayed by Covid-19 but we do not think this has materially changed the overall trends in new low carbon technologies and the systems that integrate and manage them. Analyst reporting throughout the year showed continued strong progress with clean energy capacity additions but with some headwinds on installation access and funding at the smaller scale.
There were plenty of firsts in this last year in EV grid integration with new charge infrastructure build-out and new business models.The more clearly looming Internal Combustion Engine (ICE) bans and accompanying infrastructure investment and stimulus packages will push charge infrastructure deployment forward in 2021 and beyond, with much of this heading towards smart, controllable and flexible capabilities for charge equipment.
We did not see as much progress in electric heating (and cooling) in 2020 but this is, arguably, the biggest and most challenging area of energy decarbonisation and is likely to take time to really get scale deployment underway. We expect steady progress in the coming year and with increased attention on the enormous opportunity for smart, flexible grid integration of heating.
We expected 2020 to deliver a step-up in investment in clean tech and clean energy assets and even with the constraining effects of Covid, this was the case. Most areas of the clean energy sector continued to drive investment closure and deployment forward.
Smarter Grid Solutions in 2021
At Smarter Grid Solutions we enjoyed a good year of delivering DER Management Systems (DERMS) to our customers in North-America and Europe and won our first system delivery in India.
Our customer base expanded further and now spans distribution utilities, microgrid operators, battery fleet operators, aggregators, energy service companies, local authorities, community energy groups and renewable generation developers. Our customers are implementing highly innovative business models spanning battery value stacking, DER flexibility services, off-supply resiliency and black start, flexible interconnections and multiple energy vector net zero carbon roadmap deployments. We expect the diversity of DER technologies and business models to grow in 2021 and our aim is to continue to develop our products to serve these increasingly diverse customers, with equally diverse energy assets and objectives, to help them meet their goals.
Is all of the above enough to give a greater sense of optimism in 2021? Many aspects of the coming year remain clouded in various ways but what we can say is that the goal of a clean energy system that works for all customers (and in our case, especially those that develop and manage DER) is a worthy mission. We will be entering 2021 with the same energy, enthusiasm and commitment to provide our customers with the tools they need to fulfill their ambitions.
The Smarter Grid Solutions Executive Team