WEMO24-Compiled Report-Interactive compressed (002) 4154-7882-8116 v.1 - Flipbook - Page 132
Geopolitical impacts will maintain
uncertainty in energy markets
Expanding large assets to ensure sovereignty is only one
side of the coin. Building new assets comes with costs, which
ultimately affect the customer’s bill. Reducing energy
consumption through extensive conservation programs and
efficiency measures is a clear strategy to limit demand and the
need for capital expenditures. Recent experiences, particularly
with price increases due to the Russia-Ukraine conflict, have
demonstrated conservation results ranging from 10% up to
30% in optimal conditions.
Flexibility is another issue that can limit assets development.
Flexibility varies from one location to another, depending on
the demand (on public grids), the generation potential
reserves (gas plants, hydro dams, etc.), the processes
interruption or shifting reserves, as well as the storage
capacities. Here also, a peak shaving potential can go up to
15%, combining the three major levers of customer
participation, tariff signals and automation, in an aggregated
perspective. This enables use of distributed and small
resources.
Enough compensated capacity markets are to be organized.
Flexibility means new services enabled by system operators
and regulation rules and tools, such as capacity markets.
These services must be integrated for capacity reserve
mechanisms, procurement, use and remuneration of capacity.
There are no silver bullets here—only the willingness of
authorities to get and set appropriate remuneration. Each
market will have its own customized solutions.
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Our Convictions
•
Geopolitical tensions will continue, resulting
in uncertainty remaining in energy systems and
markets.
•
A tough balance needs to be found between energy
sovereignty (independence) and a昀昀ordable energy
for customers in an accelerated net zero pathway.
•
All levers are necessary to 昀椀ght against climate
change:
•
Clear and stable policies are critical for new
energy asset development, at least at the
regional level, and must be rock solid;
•
Energy system long-term planning is highly
recommended, with government support;
•
Energy conservation and 昀氀exibility are becoming
crucial.
•
•
It’s important to put in place mechanisms and tools
to:
•
Stimulate investments in the chosen dimensions
(long-term contracting mechanisms, CfD for
instance, public support);
•
Enable energy conservation and 昀氀exibility;
•
Support market relevant principles (wholesale,
昀氀exibility, carbon markets) preventing price
volatility and a signi昀椀cant shift from local reality
to prices formation
Acceleration innovation in energy technologies is
essential – wind, solar, smart grids, and batteries.
WEMO 2024
Energy conservation and flexibility
have been forgotten
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