There will be substantial opportunities for those parties involved in solar PV and wind generation. Renewables manufacturers will continue to invest in manufacturing facilities, and in research and development, as well as giving greater consideration to longer-life assets and products, and recycling. As renewables transitions to a subsidy-free phase, developers will need greater understanding of electricity market opportunities and risks. They will also need to assess alternative approaches to maximize the value of their developments – such as incorporating storage into projects – and, to have greater awareness of potential ‘price cannibalization’ and mitigating actions.
The investment community must capitalize on significant opportunities to continue supporting the growth of renewables. The number of projects that will be installed, and their diverse locations, will require ever-more efficient transaction processes. Power producers will have growing and changing portfolios of assets that will need to operate with increasing volumes of variable generation. This will raise the risk of coal assets potentially being stranded, and will result in increasing use of innovative and smart operations such as virtual power plants.1 Nevertheless, sufficient frequency containment reserves, frequency restoration and replacement reserves, currently provided by conventional generation, are important for a successful transition.
1A virtual power plant (VPP) is a network of decentralized, often medium-scale power generating units such as wind farms, solar parks, and combined heat and power (CHP) units, as well as flexible power consumers and storage systems. The interconnected units are dispatched through the central control room of the VPP but nonetheless remain independent in their operation and ownership.