The rapid transition toward renewable energy caught many power sector players flat-footed, and General Electric was no exception. The developer cost investors almost $193 billion by betting big on natural gas's rise, and underestimating how quickly renewables would become competitive in the evolving market, according to the Institute for Energy Economics and Financial Analysis.
But the company is now doubling down on its renewables and grid modernization approach, placing part of its Grid Solutions branch under GE Renewables in 2019, and locking down key wind turbine deals for offshore wind. Utility Dive caught up with GE Grid Solutions' Chief Technology Officer Vera Silva at this year's Distributech Conference in San Antonio to discuss the shifting technology space, as well as short and long-term solutions for decarbonizing the power grid.
The following interview has been edited for brevity and clarity.
UTILITY DIVE: Has the energy transformation happened faster than you all anticipated? How have you had to adjust your strategies in recent years to accommodate that rapid transition?
VERA SILVA: Every forecast on how much renewables would be connecting to the system has underestimated those connections. In many different areas we're exceeding the forecasts in terms of how much onshore wind has come onboard and, more importantly, on solar photovoltaics. So the uptake has been faster than predicted.
The second thing is the levelized cost of energy of renewable technologies, as well as of batteries, have been dropping faster than the predictions we have. So these trends have shown that even as subsidies drop, we continue having new projects coming and development happening.
UTILITY DIVE: How has that impacted your long-term strategy? How did you have to adjust for this unexpected change?
VERA SILVA: The speed at which we need to develop new technologies has to increase to complement this space of transformation. One of the things I often tell the teams is that we are working on the right technologies. Technology will not be a show stopper. However, we sometimes feel we're not going fast enough. So I wouldn't say that's a fundamental change in strategy, but there's an acceleration of bringing the technology into the market.
Second thing is how we work with customers. Especially with a lot of digital solutions coming online, they need basically to work with us quite early from a technology perspective to make sure that they know what their options are, and then they can make choices on technology deployment to keep up with the pace of the change on generation or distributed energy resources.
UTILITY DIVE: What do you see as the key technology drivers that you really need to accelerate on?
VERA SILVA: First, just to put it into scope, this change means you have more decentralized resources connected to the distribution grid. That grid was not designed upfront to be operating as a hub that connects both generation and demand with directional flows. So there's quite a need for transformation in generation.
You also have the need for transformation with the transmission grid because it's difficult to build new lines and invest, and there's also a public acceptance issue. So we basically need to find ways of better using the transmission so it doesn't become a bottleneck that limits the ability of renewables we can integrate into the system.
And last but not least is that we have an uptake in offshore wind. We need to be able to connect those wind farms, through namely high-voltage direct current links.
So the first domain is about getting the software tools, the digital part, which is one of the enablers for our customers to be able to operate the system with more renewables intermittency with new vulnerabilities. The second one is about how much you can take decisions faster and closer to the users of the electricity or closer to these distributed resources.
UTILITY DIVE: Looking ahead to a carbon-free grid, it seems like the number one thing utilities are concerned about is the need for a dispatchable, carbon-free resource. Some people say storage could be a solution. Some people say maybe hydrogen, some people say advanced nuclear, where do you see that last notch coming from?
VERA SILVA: A lot of our focus is in helping our customers to take it step by step. So one of the first things was about how to get renewables more dispatchable by being able to curtail them when there's excess power being injected into the grid.
The second step is to bring in storage to create what we call hybrid plants, where we're combining different types of renewables with storage and creating what I would call a virtual plant that enables different dispatchability. And hydro plays a very important role because it's large-scale renewable generation that is dispatchable.
So we're working quite a lot on technologies like variable speed hydro generation that can enable more flexibility into the grid as well as supporting the stability of the grid.
UTILITY DIVE: Within storage specifically, there are lots of emerging technologies. Where do you see the storage market headed?
VERA SILVA: Obviously lithium-ion has a very important role in the speed it can react for charging, and the power it can inject. But I see different technologies going to meet different needs. We have on supercapacitors or flywheels that can support the system almost instantaneously and compensate for the fact that you have less inertia in the system when you have renewables.
Lithium-ion plays a very important role on balancing hour to hour. But when you get to this interseasonal storage, which is what you have to look at when you look at scenarios with close to 100% renewables, then there are several options open. You can go toward hydrogen, creating green gas that would then help you to supply gas plants with CO2-free gas. So this is where the need will come toward 2050, the emphasis of different technologies on the table.
UTILITY DIVE: Any last points?
VERA SILVA: I think there are two points which are critical. The first one is that as we look to this deep decarbonization scenarios, we think a lot about bringing renewables, starting to bring storage, connecting those. But you cannot forget that you are connecting it into a backbone, an enabler that is the grid. The grid is going to be in charge of orchestration and helping to bring these renewables, this low-carbon generation to the end users.
On the other hand, the grid is also enabling you to decarbonize other uses, like transport or heat because today, electricity only represents a part of the energy contribution to CO2. So the grid plays quite a critical role that cannot be ignored.
As we look at our technology roadmap from the research and development side, I can see that there isn't really a technology show stopper. It's more that we need to continue investing in technology development, working closely with our customers so that solutions can be deployed, industrialized, interoperable and easy to use.
As you bring new ideas and new technology in, we need to make sure that can be deployed and used by the customer in the same way as the technology they have today. So I think that's quite an important point to maintain the role of grid technology development.