Moving to most margin per megawatt-hour
Variable renewables such as wind and solar continue to have a growing share traded in electricity markets but are becoming more exposed to price variability. Increasing shares of variable generation in the system can result in greater curtailment and congestion costs. However, renewables are now competitive to natural gas and coal generation. There is also the opportunity of the growing volume of balancing and ancillary service markets required by systems with a larger share of variable generation.
Renewable generators are shifting from a focus on production capacity to concentrating on getting the most margin per MWh. To achieve this, additional capabilities in commercial optimization are required.
Applying digital to commercial optimization
For many renewable power generators, digital transformation is playing an increasingly important role in helping to manage generation assets in new ways to improve flexibility and performance. Digitalization is already transforming core power generation processes such as asset management and workforce management.
In the future, the ability for digital to move the integration of commercial optimization processes to the next level is a key factor that will distinguish success for industry players. The extension and re-design of the digital experience can also enable businesses to tap into the scale of currently available technology and create close collaboration between people and technology, empowering operations with technology-enabled, high-impact capabilities.
Five digital themes of commercial optimization
Our study identifies five themes as the most relevant capabilities for commercial optimization processes. The report highlights how these capabilities can help overcome the challenges renewable energy companies face in improving margin per MWh.
Three actions for renewable generators
Based on our study results, we have identified three main actions for renewables generators to consider on their path forward:
1. Implement data capabilities to become a fully data-driven organization
Renewables companies are moving toward becoming data-driven organizations by developing capabilities to aggregate data from multiple sources and making high-quality data available for advanced visualization tools for better decision making. Adopting a scalable, flexible infrastructure to boost computational capacity is important, making data accessible in a timely manner, especially in the context of growing volume, sources and complexity of data.
2. Develop forecasting and simulation capabilities based on multiple dimensions
Combining weather, production and market forecasting capabilities can allow utilities to improve weather forecasting of multiple areas, run multi-horizon production calculations and forecast market prices. Machine learning can help interpret relationships between forecasting data, making simulations and suggesting prompt insights to take smarter bidding decisions.” per megawatt-hour.
3. Automate business processes leveraging AI potential
Robotic automation allows tasks to be executed quicker, at any time and without error. The combination with AI expands the range of automation to more complex activities based on data interpretation and predictive analytics. Tapping into these technologies can help improve process effectiveness and efficiencies and reinforce margin increase.