Software based electricity grid stability
The software based solutions that will make our electricity grids fit for purpose for the coming decades are a massive investment opportunity, that will also enable countries to have a realistic chance of hitting their decarbonisation and net zero targets.
Summary: As we build more variable renewable electricity generation the way our electricity grid works will need to change and change dramatically. This will be a massive disruption to the existing system. While some of it will involve building new hardware, there is a major role for smart software solutions. It's not a change that we can let happen in the background, both investment and sustainability professionals need to be actively involved.
Why this is important: Just building a lot more wind & solar generation is only part of the electricity decarbonisation solution. Yes, it helps but it will also make it harder to keep the grid stable - making sure that we all have the electricity we need, when we need it. With (almost) no blackouts. If the grid gets less stable, then we will struggle to connect up new renewable electricity. Its a vicious downward spiral.
The big theme: From a financial perspective, we need to think about what supporting investments we will need to make to allow the electricity grid to run with a higher percentage of renewables. This is going to be a massive investment theme. There are solutions, but we need to start working on them, and building them now. Without these absolutely critical investments, we will never achieve our renewable electricity targets. It's that simple.
The Detail
Why use software based solutions?
That's easy - they are frequently the lowest cost ways of enhancing grid stability. And they can often be implemented fairly quickly, at least when compared with the challenges of building say new interconnectors. And as a result, they can have a rapid financial payback. But, its important to be clear, they are part of the solution, not all of it. For this blog we set the scene, why we need software based solutions and what they do. We will start introducing some of the (investible) solution technologies in upcoming blogs.
The software based solutions that will make our electricity grids fit for purpose for the coming decades are a massive investment opportunity, that will also enable countries to have a realistic chance of hitting their decarbonisation and net zero targets. So a double win for sustainable investors.
This is Blog No 2. on this topic. Back in December 2022 we wrote (Blog 1) on hardware solutions (so interconnectors and battery storage). We recently republished Blog No 1 (so maybe Blog 1a?) - with an update to reflect recent news flow.
