According to the International Energy Agency (IEA), the global average wind and solar penetration today is 5%, and will rise to 13-34% by 2040, depending on the ambition of energy policies adopted.
All nine of the countries/markets described in this report already achieve far higher levels of solar and wind than the global average today, with two near or above 50%.
Both wind and solar power have near-zero operating costs. As a result, they are delivered first, pushing other forms of generation further down the merit order, meaning they operate less often and make less money.
In this study, we show how nine leading countries and regions have adapted to high market shares of wind and solar power using existing integration technologies and policy measures to improve their diversity of domestic generation without compromising reliability or undercutting supply.
This research is timely, given rapidly growing levels of renewables globally, concerns about climate change and air pollution, and the renewable energy sector’s growing competitiveness with fossil fuels.
Renewable sources of electricity can be divided between variable sources, notably wind and solar power, and firm sources available on demand, such as biomass, geothermal, concentrated solar power (CSP) and hydropower. The focus of this study is grid stability and the challenges for grid operators posed by variable wind and solar power.
Our nine case studies are among the top 15 countries/markets worldwide by wind and solar market share, ranging from 14% to 53% of total electricity generation, compared with a global average of 5%. The case studies span the globe: four are from Europe, two from the U.S., one from South America, one from Asia, and one from Australia. They are, in descending order of wind and solar market share of total net generation in 2017: Denmark (52.8%); South Australia (48.4%); Uruguay (32.2%); Germany (26%); Ireland (24.6%); Spain (23.2%); Texas (18%); California (15%); and the state of Tamil Nadu, India (14.3%).
Data for major cities in the national case studies indicate that none have suffered major grid problems. If anything, power outage data suggest that these are among the world’s most robust electric grids and are performing better than their peers by national income.
This report focuses on the practical changes in market rules and resources required to manage the shift to higher levels of wind and solar power. All of the grid integration solutions discussed below are available and proven today. The broad use of emerging technologies, particularly battery storage, that could enable even higher levels of variable renewables is not considered. But we note that battery storage is an emerging solution among the leaders, notably in South Australia.
We draw attention to nine options for system operators to consider, all of which can help ease the integration process and assure supply security and grid reliability. Countries can select from these, according to their circumstances, and so avoid radical redesigns of their power markets. Our view is that solutions are tied to specific conditions and that a broad sharing of state-of-the-art solutions is the best way to encourage market growth. The nine options are listed below, with examples drawn from our case studies.
Our findings are particularly relevant against the backdrop of the rapidly rising global market share for wind and solar generation. As the market share of variable renewables grows, system integration issues will become even more important. Our case studies provide valuable lessons, documenting how national or regional market share of wind and solar power is up to 10 times the world average. Significant market share has been achieved in a handful of years, defying decades-long transitions projected by some analysts. For example, Uruguay’s wind and solar share of generation rose to 32% in 2017, from 1% in 2013.
This report is timely also in the context of political and industry pushback against renewables. Political resistance has been particularly pronounced in the U.S., with the Trump administration looking for ways to bolster coal and nuclear power. But resistance has been raised elsewhere as well. We note that Germany in 2018, for instance, gave in to the coal lobby and abandoned its 2020 carbon emissions goals. Fossil fuel firms have spun a false narrative around the supposedly negative impacts of renewables growth on electric reliability and affordability.
Regions trends have outpaced national trends in three of our case studies: South Australia, California and Texas. These examples show how regional markets can play leadership roles as early adopters of wind and solar power. When national governments are on board, as in India, regional growth can be even faster, as in the state of Tamil Nadu.
Finally, our report finds that concerns about the impact of wind and solar power on grid reliability are over-stated. We show that grid operators can assure security of supply at levels of wind and solar power of at least 50% of total generation by boosting system flexibility and grid interconnection and by ensuring strong price signals. Operators can achieve this through a series of technical engineering adjustments, investments and reforms to power market design and without resorting to new out-of-energy market subsidies for conventional generation.
Please view full report PDF for references and sources.