Integrating renewables in power systems is essential for decarbonizing the power sector, but the inherent variability of wind and solar raises new challenges for grid costs and system security, the International Energy Agency said Oct. 1.
"Power systems need to become more flexible and market designs must be adapted in order to avoid unintended impacts on electricity security," IEA Executive Director Fatih Birol said at a global ministerial conference in Berlin.
The 10 countries with the highest share of variable renewables in their power mix are currently all in Europe, IEA data shows.
"As the use of renewable energy is growing everywhere around the world, it will become ever more important to engage in cross-border cooperation and share and discuss best practices with other countries," Germany's economy and energy minister, Peter Altmaier, said.
Germany targets a 65% share of renewables in its annual power mix by 2030, up from 35% in 2018, while at the same time phasing out nuclear and coal.
Grid expansion, which is lagging behind the growth of renewables, has become the key focus for Germany's government, with annual grid costs set to overtake renewable support payments of around €20 billion per year.
Germany is not alone in facing network connection and balancing challenges. Renewables auctions in Portugal have been specifically linked to grid connection rights in order to control development, while in neighboring Spain, system operator Red Electrica de Espana S.A.U. is turning connection requests away.
In the Netherlands, regulator ACM is to designate congestion zones, within which distribution system operators will be able to refuse connection requests from projects seeking subsidies, and in the U.K., north-south bottlenecks continue to expose customers to sub-optimal balancing costs as Scottish wind is curtailed.
Grid capex up
Berlin-based grid operator 50Hertz Transmission GmbH said Oct. 1 that grid fees in its control area covering eastern Germany will rise 7% on the year in 2020, adding €36 to the average annual household bill.
A midsized industrial consumer connected to the high-voltage grid — 100 MW for 4,000 hours per year — could see its bill rise by €600,000 per year, it said. The increase was mainly due to capacity reserve mechanisms.
Meanwhile, costs for renewable energy energy curtailment and conventional redispatch were estimated to fall by €100 million in 2020.
Germany's four transmission system operators spent €1.5 billion on such measures in 2018. German TSOs estimate costs of up to €70 billion to upgrade high-voltage networks over the next 10 years to integrate wind power.
Andreas Franke is a reporter with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.
