The clock is ticking. To keep our planet habitable, we must peak global carbon emissions by 2025 and cut them in half by 2030. The task is daunting, but the solution is clear: we need to triple renewable energy and massively scale up investmentโup to $5.7 trillion per year by the end of the decadeโto stay on track with the 1.5ยฐC Paris Agreement goal.
As we approach COP28, the UN Climate Change Conference, the time for talk is over. We must shift from setting targets to taking bold, immediate action. The good news? Renewable energy is becoming the cheapest form of new electricity generation worldwide. The challenge? Wind and solar alone wonโt get us to the finish line unless we build flexible energy systems to support them.
The Challenge of Inflexible Energy Systems
For generations, our energy grids have relied on traditional power plantsโcoal and combined-cycle gas turbines (CCGT)โto provide baseload power. These systems were designed for a different era, one in which fossil fuels dominated the landscape. But today, as renewables surge ahead and are expected to generate 35% of the worldโs electricity by 2025, our outdated infrastructure is holding us back.
Take the Philippines, for example. The countryโs National Renewable Energy Program (NREP) 2020โ2040 lays the foundation for decarbonizing its electricity sector, setting targets of 35% renewable energy by 2030 and 50% by 2040. While this is a step in the right direction, the lack of a clear net-zero commitment poses a significant challenge in aligning with global climate goals.
Why Flexibility is Essential
Wind and solar power are intermittent by natureโthey rely on the sun shining and the wind blowing. Pairing these sources are paired with inflexible baseload power plants that cannot quickly ramp up or down, we could run into major problems: power grid instability, energy inefficiencies, and economic waste. If we donโt adapt, many of these old power plants will become stranded assetsโexpensive and obsolete.
The solution is clear: we must build flexible energy systems that integrate grid balancing engines and energy storage. These systems can rapidly respond to changes in supply and demand, providing critical services such as frequency control and grid stabilization. Without them, we risk blackouts, power disruptions, and wasted renewable energy potential.
The Cost-Effective Path to Net Zero
Wรคrtsilรค has studied over 190 energy systems globally, using cutting-edge market simulation software. The findings are consistent: the most cost-effective way to achieve 100% renewable energy is by pairing wind and solar with flexible power solutions.
For the Philippines, this approach could be a game-changer. According to Wรคrtsilรคโs latest modeling, investing in renewable-based power systems, backed by grid balancing engines and energy storage, could help the country reach net zero by 2050, lower electricity costs by 23%, and avoid nearly $7 billion per year in projected carbon taxes. Thatโs a win for both the environment and the economy.
Future-Proofing Our Power Systems
The journey to net zero is unpredictable, and we canโt afford to be caught off guard. Policymakers must establish the right conditions to make flexible energy solutions a reality todayโensuring our grids remain resilient in the face of future challenges.
To successfully balance renewables, we need both energy storage and grid balancing power plants. These systems complement each other by covering sub-second, minute-by-minute, and seasonal variations in energy demand. Additionally, grid balancing engines can be retrofitted to run on hydrogen and other sustainable fuels, enabling a fully renewable power loop and avoiding stranded assets.
Unlike traditional gas turbines, modern flexible engine technology offers superior efficiency and rapid response times. These engines can start and stop as many times as needed per day, operate efficiently under varying loads, and function optimally even in extreme conditionsโmaking them the ideal choice for integrating with renewable power systems.
Three Key Principles for a Flexible Future
To build a truly sustainable and affordable energy future, Wรคrtsilรค outlines three core principles policymakers and industry leaders must follow, namely:
- Invest in the Right Technologies: The rapid expansion of wind and solar must pair with flexible grid balancing solutions, ensuring a cost-effective and reliable energy mix.
- Create Market Incentives for Flexibility: The design of energy markets must reward flexibility. This includes capacity markets that ensure fair returns for developers who invest in flexible power plants, even if they run only intermittently.
- Establish Competitive Ancillary Service Markets: Assigning real value to grid stabilization services and implementing competitive bidding mechanisms will drive investments in flexible technologies and improve overall energy security.
The Window of Action is Closing
Over a century ago, Swedish scientist Svante Arrhenius warned that rising carbon dioxide levels could heat the planet. More than 120 years later, we are still struggling to curb emissions. The science is clear, the solutions exist, and the time to act is now.
The transition to renewable energy is not just about cutting emissionsโitโs about ensuring a livable future for generations to come. By building flexible energy systems, we can create a world where clean, reliable, and affordable power is accessible to all.
The window for action is closing. Every second counts.
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