Government must act urgently on power system flexibility to avoid costs escalating

The researchers will today publish an update of a 2006 systematic review of the costs and impacts of adding ‘intermittent’ electricity, such as wind and solar, into the electricity system, which finds very strong evidence that, without flexibility, costs will be much higher than they need to be.

When the report was originally published, a decade ago, the main finding was that the cost of integrating renewables into the power grid is modest. However at that time the authors did not consider variable renewable penetration levels above 20%. Since then, targets for renewable energy have increased significantly in many countries, and a substantial proportion of these targets will now be met through the large scale deployment of renewables.

The authors explain: Ten years ago, penetration levels for renewables were small, and the costs of managing the grid to incorporate wind and solar was pretty trivial compared to the costs of building wind farms and solar panels themselves. Now, however, costs have fallen and renewables are close to being cost-competitive with fossil fuels. With higher penetration levels come higher system costs, and building flexibility into the system becomes much more important’.

Dr. Phil Heptonstall, lead author of the report, comments: ‘The findings reveal that the costs of intermittency lie within a wide potential range, and that it is no longer possible to estimate system costs simplistically, for example by adding up the cost estimates for individual categories of impact together.’

Co-author of the report, Dr. Rob Gross adds: ‘The conversation we have every winter, which is only about whether we have enough spare capacity to keep the lights from going out, is the wrong question. What we should be asking instead is not just how many power stations we need, but whether they’re the right kind of power stations to keep the system flexible enough’.

The authors found that the additional costs intermittent renewables impose on the electricity system are relatively modest; those studies which did find significantly higher costs usually related to particularly inflexible systems, or where very little system re-optimisation was assumed.

The authors conclude: ‘One of the key messages of the 2006 report was that integration costs depend on the technical and economic characteristics of the system to which the renewable generation is being added. This study reinforces that, and finds that costs are very sensitive to the flexibility of the system, with cost estimates being dramatically lower for flexible systems’.

Read the full report

• The Costs and Impacts of Intermittency