Any country can integrate high shares – i.e., 30% of annual electricity production or more – of wind energy and solar photovoltaics (PV) in its power systems at little additional cost in the long term, according to a recent study from the International Energy Agency (IEA).
However, the report notes, costs depend on how flexible the system currently is and what strategy is adopted to develop system flexibility. Managing this transition will be more difficult for some countries or power systems than others, the study adds.
"Integrating high shares of variable renewables is really about transforming our power systems," comments IEA Executive Director Maria van der Hoeven. "This new IEA analysis calls for a change of perspective.
"In the classical approach, variable renewables are added to an existing system without considering all available options for adapting it as a whole. This approach misses the point. Integration is not simply about adding wind and solar on top of "business as usual'. We need to transform the system as a whole to do this cost-effectively."
Currently, the IEA says wind and solar PV account for just about 3% of world electricity generation, but a few countries already feature very high shares: In Italy, Germany, Ireland, Spain, Portugal and Denmark, wind and solar accounted for about 10% to more than 30% of electricity generation in 2012 on an annual basis.
The report says that for any country, integrating the first 5-10% of variable renewable energy (VRE) generation poses no technical or economic challenges at all, provided that three conditions are met: uncontrolled local "hot spots" of VRE deployment must be avoided, VRE must contribute to stabilizing the grid when needed, and VRE forecasts must be used effectively.
IEA adds that these lower levels of integration are possible within existing systems because the same flexible resources that power systems already use to cope with variability of demand can be put to work to help integrate variability from wind and solar. Such resources can be found in the form of flexible power plants, grid infrastructure, storage and demand-side response.
Going beyond, the first few percent to reach shares of more than 30% will require a transformation of the system, however. The IEA says this transformation has three main requirements: deploying variable renewables in a system-friendly way using state-of-the art technology, improving the day-to-day operation of power systems and markets, and investing in additional flexible resources.
The agency explains that the challenges of such a transformation depend on whether a power system is "stable," meaning no significant investments are needed to meet demand in the short term, or "dynamic," which requires significant investments in the short term, to meet growing power demand or replace old assets.
The IEA says governments with stable systems face tough policy questions about how to handle the distributional effects, particularly if other power plants need to be retired before the end of their lifetimes. Meeting these challenges will only be possible through a collaborative effort by policymakers and the industry, the report adds.
In any case, Van der Hoeven says, "These surmountable challenges should not let us lose sight of the benefits renewables can bring for energy security and fighting dangerous climate change. If OECD countries want to maintain their position as front runners in this industry, they will need to tackle these questions head-on."