The International Energy Agency said in a
significant study published on Wednesday that wind power and solar photovoltaics
(PV) have been rare bright spots in an otherwise-bleak picture of clean energy
progress in recent years. The agency says the inherent variability of wind power
and solar PV is raising concerns on reliability and cost-effectiveness while
supporting high shares of variable renewable energy (VRE). It concludes
that any country can reach high shares of wind, solar power cost-effectively.
The International Energy Agency is based in Paris
and has a membership of 28 industrialised countries including Ireland and its
study says that it’s possible for power systems to manage as much as 45% of
annual power from solar and wind, while maintaining power reliability at “little
additional long term cost over a system with no variable renewables at all.”
“Integrating high shares of variable renewables is really about transforming our
power systems,” Maria van der Hoeven, IEA executive director, said at the launch
Power of Transformation - Wind, Sun and the Economics of Flexible Power Systems,
the latest in a series of IEA reports shedding light on the challenges and
opportunities of integrating VRE into power systems globally.
“This new IEA analysis calls for a change of perspective,” she explained. “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
Currently, 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 PV
accounted respectively from around 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 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. 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
Going beyond the first few percent to reach shares of more than 30% will
require a transformation of the system, however. 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 publication helps to clarify the very different perception of wind and solar
around the globe. In stable systems, such as those in Europe, the existing asset
base will help to provide sufficient flexibility to increase VRE generation
further. However, in the absence of demand growth, increasing VRE generation in
stable systems inevitably comes at the detriment of incumbent generators and
puts the system as a whole under economic stress. This outcome is based on
fundamental economics; market effects are thus not only a consequence of
variability. The transformation challenge in stable systems is twofold: scaling
up the new, flexible system while scaling down the inflexible part of the old.
Governments with stable systems 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. Meeting these challenges will only be possible through a collaborative
effort by policy makers and the industry. In any case, “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,” Van der Hoeven said.
By contrast, in “dynamic” power systems such as in 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.
“Emerging economies really have an opportunity here. They can leap-frog to a 21st
power system -- and they should reap the benefits,” the IEA executive director
To read the remarks of Maria van der Hoeven,
executive director, at the launch,
To see the presentation that accompanied the report's launch, click here.
To read the executive summary, click here.
To see a fact sheet for The
Power of Transformation, click here.