Leading global countries and regions are blowing past record levels of wind and solar power, using various actions to boost grid flexibility, and beat concerns over impacts on security of supply.
These leading countries are turning to a menu of tools and measures that grid experts and academics have long argued are needed to achieve higher levels of variable renewables.
The Institute for Energy Economics and Financial Analysis (IEEFA) this week published an analysis of nine of the world’s leading power markets, by their share of wind and solar power in electricity generation.
The case studies achieved a market share for wind and / or solar of 14% to 53% of generation, in 2017, up to 10 times the global average of 5%, as estimated by the International Energy Agency.
The case studies show that integrating renewables safely into the grid, assuring continuing security of supply, is foremost about prioritising system flexibility, something that they achieve in different ways, according to national circumstances.
For example, Uruguay has become the world’s fastest growing wind market by using its strong domestic hydropower resources, a highly flexible power source that the country can tune up and down according to the availability of wind power. Uruguay last year achieved 33% wind power, as a share of total generation, up from 1% in 2013.
Other countries have tapped similar flexibility among their neighbours, where Denmark stands out. Denmark is the world number 1 by market share of wind and solar power, at 53% of net generation last year. It has successfully balanced the variability of this wind with cross-border, sub-sea cables whose capacity is equivalent to more than half its domestic generation.
In this way, Denmark exploits the diversity of generation of its bigger neighbours, especially hydropower in Scandinavia and renewables and thermal generation in Germany. Such interconnection helps because Denmark can import or export power, according to the status of its domestic wind generation, and so balance the grid.
Meanwhile, South Australia (world number 2, with 48% wind and solar power) is ramping up two of the world’s biggest potential growth markets in flexible power technologies: demand-response and battery storage.
South Australia has five completed or announced plans in battery storage. Tesla’s 100 MW lithium-ion battery is the world’s most recent, and biggest, completed in late 2017 alongside a 315 MW wind farm to help balance the grid. Another 30 MW battery is being built on the Yorke Peninsula of South Australia, next to the Wattle Point wind farm, while there are plans for two other grid-scale and one major residential project.
Meanwhile, South Australia has contracted nearly 1 gigawatt of demand-response this year, where users are paid to be available to reduce consumption in case of demand surges.
Other ways of boosting electricity system flexibility include new grid controls forcing renewables themselves to respond to changes in electricity supply and demand (which our report shows is used in many leading countries, including in Germany), and market reforms (for example in Texas) to reward generators that can respond quickly to near-term peaks and troughs in demand and supply.
Only one of the nine case studies has a capacity market, where power plants (often conventional coal, gas, nuclear and hydropower) are paid to be available as back-up. That market was Spain, a country apparently with no need for such subsidies, as an electricity system with huge over-capacity.
We conclude that there is no convincing evidence yet that capacity markets are needed to adapt to high levels of renewables, notwithstanding the keen lobbying efforts of fossil fuel utilities such as Germany’s RWE. Instead, we point to these other solutions and actions used by world leading markets, and specifically grid investment and power market reform, as more cost-effective solutions.