A new paper published by the International Energy Agency argues that we are approaching a new generation of wind and solar PV deployment.
The International Energy Agency published a new paper this week, entitled Next Generation Wind and Solar Power: From cost to value, which argues that we are approaching a new phase of deployment of wind and solar PV in which the two technologies are technologically mature and economically affordable. Already the two fastest-growing sources of electricity globally, until the two technologies represent a significant portion of the global share of electricity generation there will be no real issue with integrating these technologies into the existing grids. Currently, the total share of renewable energy in the global energy mix is 23.7%, which is dominated by hydropower. Of the global share, wind only adds 3.7% (433 GW), and solar PV only 1.2% (227 GW).
However, if, as the IEA believes, wind and solar are to enter a new phase of deployment — which is increasingly likely, as we see the technology mature and costs continue to drop — these shares of the global energy pie are only going to increase, which will in turn increase the challenges inherent in variable renewable energy technologies — summed up with the simple mantra, ‘the wind don’t always blow, and the sun don’t always shine.’
Subsequently, the issue of integrating these technologies into existing electricity grids is going to become a critical priority for renewables policy and feature more broadly in energy policy. The authors of the report therefore believe that a “comprehensive and systematic approach is the appropriate answer to system integration,” and are looking for a “transformation of the overall power system.” Strategic action is thus required across three areas:
- System-friendly deployment, aiming to maximize the net benefit of wind and solar power for the entire system
- Improved operating strategies, such as advanced renewable energy forecasting and enhanced scheduling of power plants
- Investment in additional flexible resources, comprising demand-side resources, electricity storage, grid infrastructure and flexible generation
The difficulty or ease of increasing the share of variable generation technologies such as wind and solar depends on the interaction of two main factors:
“The interaction between the two factors differs from system to system as a result of technical variation as well as the influence of policy and market frameworks,” the authors of the paper noted. “However, a growing body of experience across a diverse range of power systems shows a common pattern of challenges. This allows for the development of best practice principles for policy and market frameworks – principles that can be applied in a wide range of circumstances.”
The paper also argues for a paradigm shift in the economic assessment of wind and solar paper. According to the authors, the current and traditional focus on the levelized cost of electricity, or LCOE, is no longer sufficient, and next generation approaches need to take into account the system value of electricity from wind and solar, determined by the interplay of positives and negatives such as reduced fuel costs, reduced carbon dioxide emissions, etc.
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