Energy leaders talk about the challenges of – and opportunities for – connecting centralized and decentralized energy systems.
Distributed energy is thriving under the objectives of diversifying the energy mix and strengthening grids. For many countries, the objective is also to reduce import dependence and mitigate the risks of volatile energy markets. Governments are increasingly turning to innovations in renewable decentralized energy technology to meet power needs in remote areas. These efforts have had mixed levels of success, due to the high upfront cost associated with renewable energy systems, affordability of the service, as well as difficulties in the operation and maintenance of decentralized energy equipment. However, new technologies and business models are emerging, including ownership and operations based on public private partnerships.
As highlighted in the recent Regulatory Indicators for Sustainable Energy report, integrated approaches that embrace both centralized and decentralized solutions are important not only for scaling renewables but also for meeting universal access objectives by 2030, with integrated planning and coordination required. RISE finds that in terms of regulations, planning shows the most room for improvements, with multiple countries lacking variable renewable energy integration studies and comprehensive resource atlases for renewable resources. Regulations that clarify the entry and exit of the market, the definition of minimum quality standards, and the design of targeted subsidies and duty exemptions could, for instance, support the development of integrated grid and off-grid solutions.