What do today’s energy decisions mean for long-term trends?

11.09.2017 | Blog | Laura Cozzi, International Energy Agency

Decarbonising energy systems while at the same time ensuring growth and energy security is a major challenge globally. How will this extensive challenge be met in the future? Awareness and engagement are prerequisites for progress. Change is possible only by working actively to find and implement solutions globally.

The World Energy Outlook provides strategic insight on what today’s policy and investment decisions mean for long-term trends. The 2017 edition of the WEO, which will be released on 14 November, will contain a full update of energy demand and supply projections through 2040 under different scenarios, and their consequences for energy security, investment, energy industries and the environment.

The WEO will examine China’s economic and energy transitions in detail, and consider how the country’s policy choices can shape not just national prospects, but also global outcomes. China is now firmly established as a global leader in renewable energy, efficiency and innovation.

The WEO will also include in-depth analysis of the gas markets, investigating the wider opportunities and uncertainties for gas in the transition to a cleaner energy system, including its role in tackling local pollution and the risk of methane emissions.

The WEO 2017 series will also feature two special analyses to be released in October. The first describes the close links between energy and development, assessing today’s global picture for access to modern energy, the strategies and technologies that can enable countries to achieve energy for all by 2030, and the ways in which reliable energy can move communities from poverty towards prosperity.

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Joint international efforts are the key to a more sustainable future

The solutions to the challenges in the global energy field and national energy systems should be discussed and organised through international co-operation as much as possible. Joint international efforts within a wide range of technologies, such as CCUS, the electrification of transport and digital technologies, will be key to achieving a more sustainable future.

The 2017 IEA Ministerial Meeting on 7–8 November in Paris will focus on global energy challenges and how they can be overcome. The International Energy Agency continues to provide a forum where also the Nordic countries can exchange ideas and best practices with many international partners, including not only the IEA member countries but also its associate members China, India, Indonesia, Thailand, Morocco and Singapore, as well as other partners around the world.

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Discover the solutions of the Nordic countries

A new regional summit, the Nordic Energy Forum organised by World Energy Council Finland, will take place on 14–15 November in Helsinki, Finland. The Nordic Energy Forum is an opportunity to converse on the current issues and policies concerning especially the Northern European countries. At the moment the Nordic countries are in a leadership position in terms of decarbonisation of electricity generation that is already 90% carbon-free due to high levels of hydro in Norway and Sweden, nuclear power in Sweden and Finland, and wind power in Denmark. The Nordic countries are also leading the way in the decarbonisation of transport.

In the Nordic countries the next steps would be to incentivise and plan for a significantly more distributed, flexible and interconnected Nordic electricity system. Future challenges include better exploiting the possible opportunities created by electrification and digitalisation and tackling the decarbonisation of heating in buildings and industry.

The solutions and experiences of the energy sector of the Nordic countries, as well as today’s challenges in Europe, will be widely discussed during the Nordic Energy Forum.

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Laura CozziLaura Cozzi
World Energy Outlook co-lead
Head of Demand Division

Laura Cozzi will be one of the speakers at the Nordic Energy Forum on 14–15 November in Helsinki, Finland. The programme includes top keynote speakers, as well as a panel of international CEOs and a panel of top officials from European energy departments and ministries.

Check program >>
Further information about the Nordic Energy Forum: nordicenergyforum.fi

The energy system is undergoing an upheaval. What will change?

15.09.2017 | Blog | Matti Vaattovaara, ABB

Installations of renewable energy are breaking records. The growth of electric car use is accelerating. New technologies and digitalization are revolutionizing the entire energy system.

Installations of renewable energy are breaking records all over the world.  Investments in wind and solar power are twice those of fossil energy.  The development appears to be accelerating as environmental pressures grow and technology develops further.

Electric cars still make up a very small fraction of traffic, but the change will be rapid there as well.  The largest numbers of electric cars can be found in China, the United States and Norway.  The accelerating growth in China is especially noteworthy: the country has already surpassed the United States in electric cars and makes up approximately 40 percent of the world’s electric car market. Chinese car manufacturers predict that in 2020, they will sell 4.5 million electric cars.  European car manufacturers are also strongly involved in the development. Renault-Nissan believes it will sell 2.5 million electric cars by 2020.  Volkswagen estimates that it will sell 2–3 million electric cars annually by 2025.

The energy storage market is also growing strongly. Renewable energy needs to be complemented with suitable storage methods. On the other hand, the development of electric cars will drive large investments in battery technology. Global forecasts predict annual growth of more than 50 percent for battery-based energy storage solutions.

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Why will these changes revolutionize energy systems?

1. The commercial energy market is changing

Significant subsidies for renewable forms of energy have also shaped the commercial energy market.  Wind and solar power plants that have already been constructed have low production costs and are displacing traditional production in the open energy market.  The price of electricity is low, the revenue streams to energy companies are decreasing, and consequently, the possibilities for new investments are diminishing.

On the other hand, renewable energy is variable and intermittent. When the weather is calm and cloudy, energy is not produced.  Renewable energy requires dispatchable production to support it.  At the same time, the combination of low electricity prices and base load production that is only started occasionally is not attractive to investors.  This is challenging for both compensating for drops in the production of renewable energy and the reliability of the whole system.

2. As the amount of renewable energy increases, quick dispatchable power and reserves for interruptions become increasingly important

Electricity production is a huge and complex system, the stability of which has been based on a large rotating mass of synchronously running generators and turbines at large production units.  With solar power, this element does not exist at all, and with wind power, only nominally.  In addition to energy balance, the stability of the system is at risk. As intermittent renewable energy production replaces traditional base load power, the significance and commercial value of quick dispatchable power and flexible consumption increase.

3. Production and loads are becoming distributed

When further noting one particular (and excellent) characteristic of the new technology – scalability – the complexity of the challenge becomes apparent.  Previously, the energy system consisted of a predictable load and large, relatively easily adjustable production plants.  Now, inflexible and irregular production is distributed; scattered across thousands of small units as solar power units on rooftops or wind farms along the coasts.  Demand must be flexible as production alone cannot be. Electric cars and energy storage systems will bring their share of flexibility to the consumption, in units that are small, yet significant when combined.

So, the traditional idea of the operation and control of the power system and the energy market behind it is undergoing an upheaval. Systems need to be created that can ensure the availability and stability of electricity in an increasingly challenging environment.  Quick, real-time adjustment with small units is required.  Alongside traditional power companies, new players are emerging in the energy market. Households and new, agile energy operators will combine small energy flows and dispatchability into larger streams.  Blockchains are expected to extend to the energy business and challenge the traditional marketplaces. Instead of a centralized exchange, producers and consumers will trade in electricity with each other.

All this will create and demand new technology.  Information technology and digitalization will extend to all devices in both production and consumption.  Dispatchability, reliability, affordable technology and information security – all essential for a critical energy system – will be combined with common standards, ecosystems, open data and cloud services.

The energy system is facing many new developments.

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vaattovaara mattiMatti Vaattovaara
Vice President, ABB

Matti Vaattovaara is the head of local sales and marketing for the Power Grids division of ABB Finland and also heads sales for the energy and transportation sectors. He has been working for ABB since 2005 in various leadership positions in the sales and service. Vaattovaara has a Ph.D. in Industrial Management, an M.Sc. in Nuclear Engineering and an M.Sc. in Electrical Engineering.

ABB is a pioneering technology leader in electrification products, robotics and motion, industrial automation and power grids, serving customers in utilities, industry and transport & infrastructure globally. Continuing more than a 125-year history of innovation, ABB today is writing the future of industrial digitalization and driving the Energy and Fourth Industrial Revolutions. ABB is involved in promoting the transformation of the energy system throughout the entire energy chain from energy production to transmission, distribution and energy use with leading digital, automation and control solutions. As a technology leader and global pioneer in digital competence, ABB responds to customers’ needs in the energy revolution on the move towards a smarter, stronger and greener grid of the future.

More information about ABB: http://new.abb.com/

ABB is one of the Gold Partners at the Nordic Energy Forum on 14–15 November in Helsinki, Finland. The programme includes top keynote speakers, as well as a panel of international CEOs and a panel of top officials from European energy departments and ministries.

 Further information about the Nordic Energy Forum: nordicenergyforum.fi
Check program »