Integration of variable renewables: achievements, challenges and solutions.
A report by CESI and WEC
The Report ‘Variable Renewables Integration in Electricity Systems 2016 – How to get it right’ is published by the World Energy Council in partnership with Project Supporter and the Council’s Global Partner, CESI S.p.A.
The report draws upon 32 country case studies, representing about 90% of installed wind and solar capacity worldwide, highlights the issues associated with the increasing share of variable renewable energy sources for electric power systems’ operation. It examines integration of wind and solar PV in electricity systems and formulates recommendations for policymakers and the industry. The 32 country case studies, one of the largest panel ever analysed, provide a snapshot of the experiences and the different approaches that were implemented in different countries.
This comprehensive study provides a reality check and will help facilitate the development of technically and economically sound policies and regulations.
The main findings of the Report are the following:Renewables, including hydropower, now account for about 30% of the total global installed power generating capacity and 23% of total global electricity production. In the last 10 years, wind and solar PV have witnessed an explosive average annual growth in installed capacity of 23% and 51% respectively, although their combined contribution to the global electricity production is around 4%.Renewables have become big business: in 2015 a record USD286 billion was invested in 154GW of new renewables capacity (76% in wind and pv), by far overtaking the investment in conventional generation to which 97 GW were added. There was a general market shift from developed countries to emerging economies. China alone accounted for 36% of global RES investments.The combination of improving technologies and cost reductions is driving down capital expenditure (capex) and operational and maintenance (O&M) costs of variable renewables, solar PV in particular. The most recent data available suggests the lowest auction value for wind is a tariff of USD28/MWh in Morocco and USD30/MWh for a 800 MW solar PV plant in Dubai. These exceptionally low values cannot generally be projected to other countries with different wind and sun load factors (in continental Europe, for example, they are up to 50% lower) and high local costs.By 2015, 164 countries around the world had renewable energy support policies in place; 95 of them were developing countries, compared with 15 in 2005.The example of the European Union (EU) highlights the consequences of reductions in subsidies and other support schemes for investment in renewables: as subsidies decreased, the EU’s share of global solar PV installed capacity dropped over the past four years from 75% to 41%, the share of wind from 41% to 33%.A right location with high wind or solar load factors and low grid connection costs is the key to success for new, large variable renewables projects.
A real challenge for variable renewables integration into existing grids is to rapidly manage the implications of variable nature of wind and sun.
In light of the above findings, the WEC report concludes that, 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.
Policies and Market DesignA holistic and long-term approach to system design is key when planning variable renewables integration. 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.Market redesign: Policymakers must design market rules to ensure a more sustainable energy system in line with the objectives of the Trilemma, including clearly defined CO2 emissions regulations.Introduction of capacity markets can help ensure security of supply, as energy-only based markets are often insufficient to guarantee supply in systems with a large share of variable renewables.Adjustments to existing market design can be efficient, for example: – Larger balancing areas: Sharing the implications of variability and load forecast errors across a broader region provides a natural reduction in the system balancing costs.
– Aggregating the bids of different plants in the market can facilitate a reduction in the overall variability of electricity supply and thus reduce the forecast errors and system balancing needs.
– Ancillary services can be provided by variable renewables, even in the absence of sun and wind, with help of new inverter technologies. Responsibilities for system balancing have to be shared fairly among market participants, including variable renewables generators.
– Hourly and sub-hourly scheduling: Taking into account the technical limitations of conventional plants for more efficient use of available transmission and generation capacity.
TechnologiesImproving weather forecasts: Weather forecasting methodologies need further development to achieve better accuracy.Advanced operating procedures to optimize reserve capacity and flexibility of conventional generation should be introduced to manage intermittency and variability.Demand response, i.e. the short-term adjustment of demand to address temporary shortage or excess power from variable renewables, must be developed further.Energy storage technologies can be a game-changer and contribute to addressing the intermittency challenge.An expansion of the transmission and distribution grids, including cross border interconnections, may be necessary together with an optimum operational cooperation between TSO’s and DSO’s.
In conclusion, the success of both the development of intermittent renewables and their efficient integration in electricity systems necessarily depends on an effective market design and regulatory framework and concrete regional planning to avoid bottlenecks. In this respect, in order to really address the goals set out in the COP21 it is fundamental to promote a greater international cooperation between policy-makers, regulators and operators.