Navigating the Energy Transition: A Look Back at 2023

Enel X has achieved a record high of 9.4GW in Demand Response capacity supplied to the global electricity market

In the year 2023, Artificial Intelligence (AI) continued to advance, with generative AI experiencing significant growth. This, alongside the development of other technologies, had a profound impact on our lives and businesses, opening up new possibilities.

As technology continues to evolve, it is predicted that electricity demand will increase significantly, particularly with the rise of digitization. According to the Ministry of Internal Affairs and Communications in Japan, "ICT-related equipment alone will consume almost double the current annual power consumption, assuming power consumption increases proportionally to the growth of IP traffic." ¹ Therefore, it will be necessary to take measures to meet the demand.

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What is VPP?

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At COP28 (28th Conference of the Parties to the United Nations Framework Convention on Climate Change) in Dubai, which concluded on December 13, 123 countries including Japan (EU counted as one country) committed "to work together to triple the world’s installed renewable energy generation capacity to at least 11,000 GW by 2030, taking into consideration different starting points and national circumstances." Those countries also committed "to work together in order to collectively double the global average annual rate of energy efficiency improvements from around 2% to over 4% every year until 2030." ² With these agreements, renewable energy is expected to increase more than ever in Japan.

With more renewables come more intermittent resources, which creates flexibility challenges and requires sufficient capacity to bridge high and low intermittent generation times. This is where distributed energy resources (DER), such as demand-side flexibility and storage batteries, come into play, as explained on the " What is VPP?" page.

Flexibility in the power industry refers to the ability to adjust and adapt generation, consumption, and grid operations in response to changing supply and demand conditions. This includes managing fluctuations in electricity demand and dealing with the variability and uncertainty associated with renewable energy integration.

Our goal is to support everyone in the world in their transition to net-zero energy and electrification. At COP28, our CEO, Francesca Gostinelli, participated in a panel discussion organized by Accenture to emphasize the importance of customers as "key actors" in the energy transition. We believe that providing green energy, promoting electric vehicles, increasing energy efficiency, providing demand-side flexibility services, and building energy communities are all key factors in facilitating the transition to clean energy and creating a sustainable future.

Demand Response is a revolutionary program that enables customers to earn revenue by helping to reduce electricity demand during peak periods. Businesses offer their capacity to support the electricity grid, receiving regular payments in return.

We would like to thank all of our customers, including those in Japan, who responded when Demand Response was dispatched, resulting in the largest-ever 9.4 GW of Demand Response capacity that Enel X has provided to the market globally.

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In 2024, a Capacity Market will start. We are committed to working closely with our customers to create a sustainable, decarbonized society.

Hiromitsu Miyamoto

Country Manager, Enel X Japan

In April 2023, the "Act on Rationalizing Energy Use" was implemented, and by participating in Demand Response, companies can contribute to the improvement of the non-fossil energy ratio that is required.

The average temperature for the summer of 2023 was "the hottest summer in northern and eastern Japan and tied for the hottest in western Japan since statistics began in 1946." ³ It is easy to predict that electricity will be in short supply in 2024, as NASA scientists predict that the continuation of El Niño will cause sea surface temperatures in parts of the Pacific Ocean to rise, making the Earth's weather "swelteringly hot" compared to 2023. ⁴

We encourage to participate in Demand Response with Enel X Japan to help tackle the impending energy shortage before the "sweltering hot" summer of 2024 arrives.