Que: How does Wärtsilä leverage innovative technologies to accelerate renewable energy integration?

Ans: Wärtsilä is a global leader in innovative technologies and lifecycle solutions for the marine and energy markets. We emphasise innovation in sustainable technology and services to help our customers continuously improve their environmental and economic performance.

In energy sector, Wärtsilä plays a crucial role in advancing the global energy transition and decarbonisation through providing solutions for balancing, which is critical for integrating renewables, the stability of the grid, and an optimised overall power system. Our focus is on enhancing power system flexibility, which is key to ensuring reliable integration of renewable energy.

Along with energy storage and pumped hydro, grid balancing engines provide the needed flexibility to the grid. Grid balancing engines can be quickly ramped up to support intermittent wind and solar and provided the needed balancing power on a minute, daily, weekly, and season level. They can also be shut down instantaneously when not needed. Wärtsilä has modelled almost 200 power systems globally and consistently found that flexible technologies such as grid balancing engines can provide the needed balancing not only today but also in a 100 percent renewable power system. Today the engines can run on natural gas and be switched to run on sustainable fuels when commercially available. With our modelling capabilities, we are able to design optimal power systems that not only minimise emissions but also optimise the operational costs. This ensures that renewable energy systems can be scaled effectively, while maintaining reliability and cost efficiency.

Que: What is Wärtsilä’s approach to balancing intermittent renewable energy sources with existing baseload plants?

Ans: When it comes to integrating and balancing renewables, flexibility is key. Many of the traditional inflexible power plants such as coal and CCGT are not suited to be integrated with renewable energy as they struggle to adapt to the variability of renewables. This can lead to not only grid instability and blackouts, but also renewable curtailment and higher system costs. However, engine power plants currently running in baseload mode can be used for balancing purposes as well - they have the needed flexibility to be quickly ramped up to support intermittent renewables and then shut down when renewables are back online.

The importance of flexible balancing power generation technologies was highlighted also in Wärtsilä’s recently-released global power system modelling, published in the Crossroads to net zero report. The report builds on real world data and future estimates to examine the transformation of power systems up to 2050, driven by annual CO2 limits and cost optimisation. Two Paris Agreement aligned scenarios have been compared:
•Pathway 1: Renewables and storage-only – a future powered only by wind, solar and energy storage.
•Pathway 2: Balanced, renewables supported by balancing power – an energy mix powered mainly by wind and solar, with the needed balancing provided by energy storage and balancing power plants, which run on gas today and sustainable fuels in the future.

The key findings from this modelling on a global level are that:
•Adding balancing power plants to the energy mix reduces the cost of our future power systems by 42 percent – saving 65 trillion EUR by 2050, compared to a renewables-only path. This is equivalent to more than half of the world’s annual GDP in 2024.
•Using balancing power plants to replace coal generation and support variable renewables will accelerate the pace of the energy transition and reduce the total accumulated CO2 emissions by 21 percent between 2025 and 2050 compared to a renewables and storage path.
•By deploying balancing power plants to support renewables, we can halve the amount of renewable capacity and land needed to meet our decarbonisation targets.
•By 2050 we could waste 88 percent less energy through renewable curtailment by deploying balancing power plants.
•Without balancing power plants, 54 percent of wind and solar would need to be curtailed in 2050, and curtailment will increase year on year from 2040 to 2050 as electricity demand increases and more renewables need to be built to meet the demand.

At Wärtsilä, we recognise that a reliable energy transition requires not only increasing renewable energy capacity but also ensuring that the power grid remains stable even when renewable generation fluctuates. Our approach focuses on integrating balancing power plants alongside renewable energy and storage systems. These plants offer rapid-start capabilities, providing both short- and long-term flexibility, which is critical during periods of low renewable energy generation. By complementing intermittent renewables with balancing power, we reduce the reliance on inflexible baseload plants like coal, accelerating emissions reductions.

Que: Could you share insights into recent advancements in the energy storage solutions globally?

Ans: The growth of energy storage will continue alongside the drive for renewable energy expansion. The size of energy storage projects has been steadily increasing to the multi-gigawatt-hour scale and will continue to do over the next year. Energy storage systems will continue to be increasingly geared towards energy shifting, driven by the ever-growing penetration of intermittent renewable energy generation and the consequent need to store energy for dispatch in times when supply and demand are mismatched. As these projects move closer to population centers, addressing challenges like noise mitigation and fire safety will become even more critical.

In 2024, Wärtsilä launched their next-generation Quantum2 and Quantum3 energy storage systems. Wärtsilä’s Quantum2 DC block and Quantum3 AC block systems offer high energy density, sustainable design, a 20' containerised footprint, and advanced safety features. Wärtsilä's GEMS Digital Energy Platform works in tandem to provide sophisticated controls and monitoring capabilities—ensuring high performance with any Quantum solution. GEMS is a mature software platform that monitors, controls, and optimises energy assets at both site and portfolio levels. GEMS 7, the latest generation of the software, operates autonomously to support multi-gigawatt-hour-scale energy storage projects, a key advancement for operators as sites of this size become more widespread.

Que: What policy and regulatory changes are important to ensuring a smooth transition to a renewable-heavy energy grid in India?

Ans: India is on a transformative journey to integrate 500 GW of non-fossil fuel energy capacity by 2030. As India’s power system becomes more complex with an increasing share of weather-dependent renewable energy sources, enhancing power system flexibility is crucial. A Wärtsilä-KPMG ancillary services market study underscored the need for greater operational flexibility, particularly in renewable-rich states like Gujarat, Tamil Nadu, Maharashtra and Rajasthan.

Strategic planning for future power systems and capacity additions should be guided by data to achieve a rapid transition and a cost-optimal technology mix for affordable electricity.

Wärtsilä is advocating for the following policy principles:
1.Enable an accelerated expansion of renewables and balancing technologies
oEnable the rapid expansion of renewables by upgrading transmission systems, streamlining permitting processes, and investing in regional interconnectors.
oRapidly expand short and long duration balancing technologies to ensure grid reliability and resilience. Together, these technologies support the rapid growth of renewable energy, gradually reduce reliance on inflexible assets, such as coal plants, and accelerate emission reductions.
oMobilise financing to secure the development of renewable and balancing power projects at the necessary scale and speed.

2.Redesign electricity markets to incentivise flexibility
oReform electricity market structures to support the greater integration of variable renewable energy. Balancing should be incentivised to provide essential flexibility to optimise renewable energy systems.
oIncrease dispatch granularity to 5-minute resolution in energy wholesale markets. Shorter and more precise timeframes for pricing and supply adjustments will support variable renewable energy integration and incentivise flexible balancing power plants that can respond quickly to changes in electricity demand.
oIntroduce new ancillary services, such as reserve, ramping, voltage, and inertia products, to guarantee grid stability as the level of renewable penetration increases.
oEstablish bankable revenue models for low-running-hour balancing power plants, including mechanisms like flexibility-linked capacity payments and scarcity pricing.

3. Choose the right future-proof technologies and prepare for sustainable fuels
oEnable the deployment of balancing technologies that are future proof and ready for the introduction of sustainable fuels, to fully decarbonise the power sector from the mid-2030s onwards.
oSupport the rapid ramp-up of renewables and enable the phase out of legacy technologies, by using natural gas as a transition fuel for flexible balancing power plants.
oPrepare for the introduction of sustainable fuels by building the needed expertise and infrastructure to ensure a seamless transition to a fully decarbonised power sector in the future.

Decisive actions from the entire power sector are now crucial to achieve a low-cost and low-emission energy transition in line with the 2050 Paris Agreement. Instead of prioritising only the accelerated deployment of renewables, a holistic system-level approach is required.

Que: What financing models do you believe are most effective in supporting independent power plants and green energy projects in India?

Ans: To attract investments in flexible technologies and low-running-hour balancing power plants, it is crucial to implement a bankable revenue model. India’s renewable energy sector is growing rapidly, but significant capital investment is needed to meet the country’s ambitious goals of integrating 500 GW of non-fossil fuel energy by 2030. Effective financing models are crucial to support independent power plants (IPPs) and green energy projects, ensuring long-term sustainability and profitability.

Options like flexibility-linked capacity payments or providing sufficient revenue incentives to these balancing power plants can drive this strategic shift. This strategic shift will ensure a stable and sustainable energy future for India.

The Indian government’s focus on creating a bankable revenue model for flexible balancing power plants, alongside other innovative financing mechanisms, will be critical in accelerating green energy investments while ensuring long-term financial sustainability.

Que: What are your predictions for the renewable energy landscape in India and South Asia over the next decade?

Ans: India and South Asia are set to undergo a significant transformation in the renewable energy sector over the next decade, driven by ambitious government policies, technological advancements, and growing investment in clean energy. India, in particular, aims to achieve 500 GW of non-fossil fuel energy capacity by 2030, a goal that will reshape the country's energy landscape. This will be achieved through the rapid expansion of solar, wind, and other renewable energy sources.

However, to integrate such a large amount of intermittent renewable energy into the grid, balancing power technologies, such as flexible gas-based engines and energy storage systems, will play an important role. Wärtsilä’s modelling shows that by 2030, India will need around 9 GW of flexible balancing power to support the grid. This integration will not only reduce carbon emissions but also ensure a stable and resilient energy system capable of handling fluctuations in renewable generation.

Additionally, the renewable energy landscape in South Asia will be marked by increased collaboration between governments and private players to overcome challenges such as transmission infrastructure, grid reliability, and financing. Moreover, as India continues to lead the way in renewable energy, we expect the region to benefit from knowledge sharing, innovation, and cross-border energy trade, which will further accelerate the transition to a sustainable energy future.