The next challenge in the energy transition

Over the last years the cost of renewable energy has come down significantly, in particular solar photovoltaics and wind energy – onshore and offshore. We have seen renewable becoming competitive with fossil fuels and nuclear energy in an increasing number of places around the world. The expectation is that this trend will continue in the coming years and that renewable energy will take an ever increasing share of the energy mix. This is of course also necessary in order to meet national, European and global climate-related objectives, including those agreed in Paris in December 2005.

This does introduce a new challenge: the two most important renewable energy sources, solar photovoltaics and wind energy, are weather dependent. You cannot switch them on when the energy demand is there. With an increasing share of variable renewable energy “VRE”, the energy system will have to adapt itself to accommodate this variability.

The electricity-system already encounters this phenomena, see the chart below. In Germany last year (2016), the share of renewable electricity in the power mix varied from 11% to 86%, on average 32%. Solar PV  (in yellow) and wind energy (the 2 darker shades of blue) are particularly variable; biomass (green) and hydro (light blue) are much more constant in their production profile.

This variable feed-in pattern was achieved with a relatively small share of solar PV and wind in the German energy system of only 3,3% and an average share of 18% in the power mix. Last year this has led to over 100 hours with negative electricity prices: consumers received payment because they were so kind to use electricity!

When the share of solar PV and wind doubles from 3,3% to 6,6% of the energy system, there will be many hours during the year whereby the entire German power mix is supplied by solar PV and wind – 2 times 86% is well above 100%! If the share of VRE triples to 10% or increases to 20% of the energy system, this means nothing less that a fundamental redesign of the energy system.

Society has a number of means on how to deal with this. These are the tools in the toolkit:

  • Switching on and off the fossil-fired generation, in particular gas-fired and coal-fired generation, although with increased decarbonisation this is no longer an option unless large scale Carbon Capture and Storage (CCS) becomes available as a technology option.
  • Switching off solar PV and wind turbines (“curtailment”), although this is not what we want as they produce energy at low marginal cost and we want to use this energy to develop a more sustainable energy system.
  • Laying more interconnectors between countries so that surpluses and shortages can be transported between these countries, although this can only be part if the solution because there is a strong correlation between neighbouring countries in the supply of renewable energy. This is certainly the case for solar PV but also in wind energy, as high-pressure whether systems resulting in low wind speed can cover the whole of North Western Europe.
  • Making energy consumption more flexibele (“demand response”), so that energy is consumed to the maximum extent in periods where there is a lot of renewable energy available and minimum consumption at night when the wind does not blow.
  • Energy storage, e.g. flywheels, batteries, compresses air energy storage (CAES), heat storage, power trains and the conversion of electricity into other products such as power-to-gas or power-to-products.

New solutions are needed to match supply and demand, with new forms of energy storage and new solutions to enable demand response. These solutions will be made economically attractive by increased volatility of the energy prices, which offers opportunities for consumers who are prepared, and risks to those who are not. Recoy helps end consumers to prepare for this future by reducing risks and maximising opportunities!

 

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