As wind and solar power rise, EU seeks more grid ‘flexibility’

According to industry association Eurelectric, the EU power sector needs to invest at least €100 billion per year in order to reach an 80% share of renewables by 2045. [Don Harder / Flickr]

An integrated electricity market, with more grid interconnections and storage solutions “of all types” are at the centre of EU plans to build a more resilient electricity system able to deal with growing shares of variable wind and solar power.

The European Union won plaudits last year when it updated its renewable energy objectives, aiming for 32% renewables in total energy consumption by 2030 – nearly double today’s share.

The updated 2030 targets mean renewable electricity from solar and wind power will need to grow steeply, said Hans van Steen, a senior official at the European Commission’s energy department.

From around 30% currently, renewables will have to reach “53-54%” of the EU’s electricity mix in order to meet the new 2030 objective, he told a EURACTIV event earlier this month.

The EU’s updated renewable energy directive entered into force only a year ago. However, those targets already appear largely outdated now.

Meanwhile, climate strikes have swept through Europe, and a “green wave” hit the European Parliament following the May elections. A new EU executive was sworn in a few months later, pledging to turn Europe into the first “climate neutral” continent in the world by 2050.

And that will require revisiting the renewable energy directive once again in order to ramp up wind and solar even further.

“We will need a lot more renewable electricity,” van Steen said, citing EU projections showing that electricity will have to be “around 80%” based on renewables in order to reach the 2050 goal.

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The European Green Deal to be unveiled in early 2020 will pursue a strategy of increasing the share of electricity in the EU’s energy mix, the new head of the European Commission’s energy department told a conference in Brussels Wednesday (6 November).

That will also bring challenges, van Steen pointed out, saying a big increase in variable energy sources like wind and solar can destabilise the electricity grid if not managed properly.

This is where “flexibility solutions,” come into play, van Steen explained, saying those “will be key to making a success story out of this”. Flexibility can come in different ways, he said, citing the following five:

  • Improving interconnections: Countries with high shares of renewables are also those that are well connected with neighbouring countries, enabling them to “evacuate surplus electricity production on very windy or very sunny days,” van Steen said.
  • Storage: All types of storage will be needed, the official insisted, citing pumped hydro, and grid-connected batteries as examples. “We need a market for storage” in order to achieve that, “with incentives for people to invest” in new storage capacity, van Steen said.
  • Sector integration: This involves the “indirect electrification” of industries such as cement or steelmaking. For those, production of synthetic fuels like Green Hydrogen and eFuels “will have to increase,” he pointed out.
  • Demand-side response: Enabled by smart meters and digital control tools, this allows consumers, for example, to charge their electric car automatically at night when power is cheap and abundant, thereby shaving-off peak demand during the day, van Steen said.
  • Grid management: Also known as “smart grids”, these allow managing electricity coming from a multitude of small-scale renewable energy generators instead of big centralised power plants. “In our view, it’s a question about market organisation,” van Steen said, adding digitalisation, as well as data exchanges and cooperation between grid operators will also play a key part.

€100 billion per year

Meeting those challenges will require massive investments, however. According to industry association Eurelectric, the EU power sector needs to invest at least €100 billion per year in order to reach an 80% share of renewables by 2045, the main objective of the industry’s decarbonisation roadmap.

The problem is prices on the electricity market are currently too low to trigger investments in new “flexibility” services.

“All new flexibility today is non-profitable,” said Uroš Salobir, a senior executive at Eles, the Slovenian electric power system operator. “It’s very hard to invest into storage or demand-response that pay back” – whether, at household or industry level, he told participants at the EURACTIV event.

Across the world, nearly all flexibility providers are unprofitable, said Salobir who is also vice-chair for research and development at the European Network of Transmission System Operators for Electricity (ENTSO-E).

And the rise of cheap wind and solar power – although desirable from an environmental viewpoint – is only making things worse.

“Transitioning to a power system with high shares of wind and solar power, which have no fuel costs associated to them, results in decreasing energy market prices,” said John Lowry from EirGrid, the Irish Transmission System Operator (TSO).

While the rise of wind and solar is “undoubtedly very positive, it does present challenges for incentivising the right type of investment, to ensure the system develops, provides the necessary flexibility, and system services required in 2030 and beyond,” Lowry said at the EURACTIV event.

In other words, “falling prices mean reduced revenues, and in some cases, financial gaps,” he warned.

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Demand-response services are still fairly new in the electricity market, but their importance is only expected to grow as power grids come under increasing strain from intermittent renewable energy sources. Andreas Flamm and Frauke Thies explain the “fundamental shift” that needs to happen in the policy landscape.

Lowry is director of an EU-funded project called EU-SysFlex, which sought to identify issues and solutions associated with integrating large-scale renewable energy. One of them is illustrated by the infamous “duck curve” showing the mismatch between solar power production and peak electricity demand, which usually happens after sunset.

Until new flexibility services can be deployed at scale, Europe’s electricity grids will come under increased pressure from solar and wind power production, forcing grid operators to curtail excess wind and solar power.

The costs of curtailment are particularly high in Germany, which grapples with a chronic incapacity to build new power lines. In that country alone, the cost of stabilising the grid reached €1.4 billion in 2017 as wind supplied record levels of power, according to the country’s energy regulator, the Bundesnetzagentur (BNA). About 10,200GWh was curtailed and approximately 10,238GWh of reserve power was ordered to stabilise the grid that year, BNA said in June last year.

Flexibility solutions already exist and they can help address the issue, Lowry said. But the necessary investments won’t take place unless electricity markets provide the “correct price signals” to investors, he warned.

“We’re behind the curve in many respects,” Lowry told participants at the EURACTIV event. “This isn’t just about adding more renewables to the system. It’s about being able to effectively utilise those resources,” he said.

Ireland, for instance, is currently capable of handling up to 65% of renewables on its electricity grid, a record in Europe. But that required adaptations to electricity systems and operations, Lowry pointed out. “If on a broader scale, Europe wants to meet those renewable targets, there is a lot of work that needs to be done now,” he said.

‘Yes, we can’: Franco-Irish research aims to boost green electricity intake

Power grid interconnections and system flexibility are key to integrate bigger shares of renewables. A Franco-Irish research project aims to produce a roadmap to deploy EU power grids that can handle more than 50% of electricity from intermittent renewable sources.

In Brussels, the European Commission is highly aware of the issue. Hans van Steen, the EU energy official, drew attention to a 2023 review clause in the renewable energy directive, saying that date “may need to be brought forward” in view of the EU’s increased climate ambition for both 2030 and 2050.

But in the European Parliament, some lawmakers are starting to get nervous about the upcoming revision of the EU’s 2030 targets for renewables.

“It’s easy to be simplistic and say we’ll increase our targets,” said Sean Kelly, an Irish MEP who led negotiations on the renewable energy directive on behalf of the centre-right European People’s Party (EPP). But delivering on those will be more challenging, he cautioned, saying investments in new flexibility services will need to be “future-proofed” if Europe wants to move forward.

“The real challenge is getting TSOs and DSOs to work together,” Kelly said, referring to local and national grid operators. Lowry agreed, saying TSO-DSO coordination “is absolutely critical” to maximise the use of renewables.

So what are DSOs doing? “We are discussing precisely this,” said Kirsten Glennung, policy advisor at the European Distribution System Operators (E.DSO), an industry association.

One avenue currently being explored by DSOs is to cooperate more closely with local authorities in order to develop local decarbonisation plans and become more visible to consumers.

“We as DSOs need to re-invent ourselves a little bit in our relationship with consumers,” she admitted. “That is something that wasn’t needed before and we are increasingly becoming aware of it,” she said.

Grid operators boss: ‘Time for energy utilities to re-invent their model’

Digital technologies like blockchain and artificial intelligence bring “total revolution” in the electricity industry, allowing energy communities to proliferate, says Laurent Schmitt. Utilities should not resist the change but embrace it to become “community enablers”, he told EURACTIV in an interview.

Edited by Samuel Stolton

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