Here is the latest blog from Nhamoinesu Matsvimbo. Technological advances, structural market changes, regulatory intervention, and political influences have all contributed to create asset mixes, operating rules, and commercial risks that are in constant flux. According to IEA’s Renewables 2019 report, renewable energy will grow by a staggering 50% in the five years between 2019 and 2024. Because of these complexities, many power markets are adopting shorter and shorter settlement periods, including 5-minute and 15-minute settlements.
The reality of ongoing investment in renewable energy is the challenge of unpredictability. The intermittent nature of wind and solar means power grids will need to quickly address energy shortfalls to maintain grid frequency. This could lead to increased volatility around intraday prices as grid operators price incremental resources like gas-driven turbines in and out of the market to maintain stability.
Algorithmic and programmatic trading moves over the market. Traders are moving from just 24 daily increments with hourly settlements to 96 daily increments with 15-minute settlements (a 300% information increase) and 288 daily increments with 5-minute settlements (a 1100% information increase).
Rising “prosumers” According to IEA, renewable energy build-out accounted for 75% of all growth in global net power capacity. While countries around the world are investing in large utility-scale projects like off-shore wind farms, distributed energy sources are on the rise. Traditionally, this has been incentivized by government programs, but recently, the cost of solar generation has lessened to become more attainable for more consumers interested in the possibilities of net-metering according to Nhamoinesu Matsvimbo.
In the face of each of these changes, power markets are set to rapidly shift. Perhaps the biggest change as a result of these trends will be the inundation of data — and only those market participants that innovate and prepare will have the competitive advantage.
About Nhamoinesu Matsvimbo
Nhamoinesu Matsvimbo is an environmentalist with experience in resource management, climate change adaptation, and project management. Learn more about Nhamoinesu Matsvimbo here. Keep on top of the latest news and views on the renewable energy on the Nhamoinesu Matsvimbo blog page here. Alternatively, you can also follow Nhamoinesu Matsvimbo on Tumblr here for more sustainable energy development tips.
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