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Renewables: a study by CESI and WEC

Renewables: a study by CESI and WEC
21 . Sep . 2016
​Renewables, including hydro, now account for over 30% of the total global installed power generation capacity and 23% of total global electricity production. In the past 10 years, wind and solar PV have witnessed an explosive average annual growth of 23% and 50% respectively, although their combined contribution to the global electricity supply is currently only 4%, according to a new report by the World Energy Council launched on 20 September. The Report entitled ‘Variable Renewables Integration in Electricity Systems 2016 - How to get it right’ is published by the World Energy Council in partnership with CESI S.p.A. and draws upon 32 country case studies, representing about 90% of installed wind and solar capacity worldwide. Renewables have become big business: in 2015 a record US$286 billion was invested in 154GW of new renewables capacity (76% in wind and PV), by far overtaking the investment in conventional generation to which 97GW were added. The report is launched as part of the build up to the 23rd World Energy Congress which will be held between 10 - 13 October in Istanbul. The topic of renewables in the global energy mix and how they will help accelerate the transition to a low carbon economy is one of the key issues on the first day of the Congress. Christoph Frei, Secretary General, World Energy Council, said:“The success of both the development of intermittent renewables and their efficient integration in electricity systems fundamentally depends on the right market design and regulatory framework and solid regional planning to avoid bottlenecks.” “We are beyond the tipping point of grand energy transition. Implementing technically and economically sound, stable policies supported by clear carbon price signals will enable this transition and take us a step closer to meeting the climate aspirations agreed at COP21.” Improving technologies and cost reductions are driving down capital expenditure (CAPEX) and operation and maintenance (O&M) costs of variable renewables. Recent data available suggests the lowest auction value for wind is a tariff of US$28/MWh in Morocco and US$30/MWh for a solar PV 800 MW plant in Dubai. These exceptionally low values cannot generally be projected to other countries with completely different wind and sun load factors and local costs but show a downward trend. In continental Europe wind and solar load factors are up to 50% lower and local costs considerably higher. With regard  to the most effective measures to cope with the challenges brought by the integration of intermittent renewable sources, Matteo Codazzi, CEO of CESI SpA, suggests: “In order to fully exploit the opportunities created by variable renewables, it is necessary to work along two main and complementary streams: policies and technologies. About policies, when planning variable renewables integration it is important to take into account  to system design both a holistic and long-term approach and the local dimensions of each market. In fact, each country’s power system is unique depending on its primary energy sources, location and size of power plants, transmission and distribution (T&D) systems, financial conditions, costs and consumer behavior. Moreover, policymakers should design market rules to ensure a more sustainable energy system, including clearly defined CO2 emissions regulations. In addition, introduction of capacity markets is central to ensure security of supply, as energy-only based markets are often insufficient to guarantee supply in systems with a large share of variable renewables. With regard to technologies, to manage intermittency and variability, it is  indispensable to introduce advanced operating procedures to optimize reserve capacity and flexibility of conventional generation. Also demand response must be developed further. Another crucial factors to addressing the intermittency challenge are the energy storage technologies. Finally, an expansion of the transmission and distribution grids, including cross border interconnections, may be necessary together with an effective cooperation between TSO’s and DSO’s.” The report highlights lessons learnt, identifies critical success factors and extracts concrete measures for successful variable renewable energy sources integration in electricity systems. The publication is available to download using the following link:

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