Wind and solar entering ‘next generation’ of deployment, says IEA

Wind and solar power are entering the “next generation” of deployment as they become “technologically mature and economically affordable”, a report by the International Energy Agency (IEA) has argued.

The IEA said the rapid growth of wind and solar power in some countries is bringing “new challenges to the fore”, with the issue of system and market integration becoming “a critical priority for renewables policy and energy policy more broadly”.

Successfully integrating wind and solar into the broader energy system requires action in three main areas, the report argued: system friendly deployment, so that the net benefits of wind and solar power are maximised for the whole system; improved operating strategies, such as “advanced renewable energy forecasting and enhanced scheduling of power plants”; and investment in flexible resources including demand-side response, storage and grid infrastructure.

In order to encourage system friendly deployment it said there needed to be a “paradigm shift” in the way wind and solar is assessed economically. It said the “traditional focus” on the levelised cost of energy “is no longer sufficient”, as the measure is “blind to the when, where and how of power generation”.

Instead, it argued, they should be judged by their system value – “the overall benefit arising from the addition of a wind or solar power generation source to the power system.”

Among the items in the plus column are lower fuel and emissions costs; reduced requirements for other generation capacity and sometimes lower transmission losses. Items in the minus column include increased wear and tear on conventional plants having to vary their output; reduced utilisation of non-wind and solar assets and the need to curtail wind and solar when their output is too high. Changes to grid infrastructure requirements can fall into either column, depending on the particular case.

Accordingly it said existing policy and market frameworks should be upgraded to encourage the building of projects that bring the highest system value compared with their levelised cost of energy.

Share of wind and solar generation in selected countries for 2014 and 2020

Source: IEA

The report also said modern wind and solar plants can “actively support their own integration by providing valuable system services”. It recommended that “forward-looking technical standards” are established to ensure that new power plants are capable of providing “state-of-the-art support for a stable and secure operation of the power system” and that electricity markets and operating protocols are reformed to allow for the provision of system services by wind and solar assets.

Additionally it said the institutional and regulatory structures of low- and medium-voltage grids should be reviewed and revised to reflect their new role in a smarter, more decentralised electricity system, and said electricity tariffs should be reformed to accurately reflect the cost of power depending on time and location. 

Earlier this week a study by REN21 found that 2015 had been a record breaking year for the deployment of renewables, with 147GW of new capacity being installed across the world, accounting for 60 per cent of all new generation.