The International Energy Agency has today published a report which it claims proves that “any country can reach high shares of wind and solar power cost effectively”.
The study states that integrating 30 per cent of annual electricity production or more from wind and solar PV in power systems “can come at little additional cost in the long term”.
However, the IEA does add the caveat that “costs depend on how flexible the system currently is and what strategy is adopted to develop flexibility over the long term”.
With this in mind it concedes that “managing this transition will be more difficult for some countries or power systems than others”.
Launching the report, called ‘The Power of Transformation: Wind, Sun and the Economics of Flexible Power Systems’, IEA executive director Maria van der Hoeven said: “Integrating high shares of variable renewables is really about transforming our power systems.”
She said the report was calling 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.”
The report claims that for any country, integrating the first 5-10 per cent 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 stabilising the grid when needed; and VRE forecasts must be used effectively”.
The IEA states 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.
But to reach shares of more than 30 per cent “will require a transformation of the system” says the report.
“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 finally investing in additional flexible resources.
“The challenges of such 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 short-term, to meet growing power demand or replace old assets.”
The IEA says that governments with stable systems – such as those in Europe – face “tough policy questions about how to handle the distributional effects, in particular if other power plants need to be retired before the end of their lifetimes and, if so, who will pay for stranded assets”.
However Van der Hoeven added that “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.”
In contrast, the IEA states that in ‘dynamic’ power systems such as those of India, China, Brazil and other emerging economies, wind power and solar PV can be cost-effective solutions to meet incremental demand.
“VRE grid integration can and must be a priority from the onset. With proper investments, a flexible system can be built from the very start, in parallel with the deployment of variable renewables.”
Van der Hoeven said: “Emerging economies really have an opportunity here. They can leap-frog to a 21st-century power system and they should reap the benefits.”