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Integrating Variable Renewable Energy Will Require New Policies & Infrastructure, Finds IEA

A new report from the International Energy Agency has highlighted the need for new policies, infrastructure, and markets to accommodate the increasing level of variable renewable energies like wind and solar feeding electricity into national grids.

A new report from the International Energy Agency has highlighted the need for new policies, infrastructure, and markets to accommodate the increasing level of variable renewable energies like wind and solar feeding electricity into national grids.

iea-8The International Energy Agency (IEA), touching on a topic that is not necessarily ‘new’ but is nevertheless vital, has released a new report entitled Next Generation Wind and Solar: From Cost to Valuewhich tackles the root issues at play and offers possible solutions for countries wanting to move forward. The so-called ‘root issue’ is the fact that renewable energy technologies like wind and solar are inherently variable in nature — i.e., they do not generate at a constant rate, but rather in line with whether the wind is blowing or the sun is shining. According to the IEA, “Integrating the first few percentage points of variable renewables into generation poses few problems for most power systems. Beyond these levels however, power systems must be adapted and upgraded to take variable renewables into account.”

Given the fact that wind and solar are the two fastest growing sources of electricity worldwide, thanks in part to massive decreases in cost (between 2008 and 2015 land-based wind costs dropped 35%, while solar PV dropped almost 80%) and heightened awareness of the need to transition to zero-carbon energy technology, means that there is going to be a lot more than a “few percentage points of variable renewables” being fed into electricity grids around the world.

The report provides detailed case studies for Brazil, China, Denmark, Indonesia, Mexico, and South Africa — six countries with growing or existing (and growing) levels of renewable energy.

Current and forecasted share of Variable Renewable Energy generation for case study countries.


Specifically, Mexico, China, and Brazil are all expected to double their share of variable renewable energy (VRE) to reach about 10% of annual generation by 2021, while South Africa is expected to triple its share and reach 6%, while Denmark grows to 60% as Indonesia barely taps its VRE potential.

“Integrating variable renewables will be a priority for countries such as Brazil, China, Mexico and South Africa, where the share of renewable power is growing,” says the IEA. “In countries such as Denmark, where variable renewables have become the main source of power, a full transformation of the power system is necessary, including infrastructure, policies and markets.”

The IEA specifically points to the need to take a first step and factor in the system value of electricity from wind and solar — “the overall benefit arising from the addition of a wind or solar power generation source to the power system.” According to the IEA, “System value is determined by a variety of factors, including reduced fuel costs, reduced carbon dioxide and other pollutant emissions costs, or higher costs of additional grid infrastructure.” Only when real system value is measured and policies are put in place to maximize the benefit of a system value will “the next generation of wind and solar … truly live up to its potential.”

In a case like Denmark, where renewable energy is already at such a high level, the IEA explains that “a comprehensive and systematic approach is the appropriate answer to system integration, best captured by the notion of transformation of the overall power system.” As such, the IEA highlights the need for action in three strategic areas:

  • System-friendly deployment to maximize the net benefit of wind and solar power for the entire power system. Such an approach leads to different deployment priorities as compared to a focus on generation costs alone. This area is the main focus of the report.
  • Improved operating strategies are a powerful tool to maximize the contribution of existing assets and ensure security of supply. These include advanced renewable energy forecasting and enhanced scheduling of power plants.
  • Investment in additional flexible resources. Even in concert, improved operations and system-friendly VRE deployment practices might be insufficient to manage high shares of VRE in the long term. The point at which investment in additional flexible resources becomes necessary depends on the system context. In systems with dynamically growing demand, this will be a priority earlier on.

Three pillars of system transformation


Further information and explanation of the specifics at play in the IEA’s analysis and its policy suggestions can be viewed in the report, which is available free here.

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