The International Energy Agency has blown away some of the key myths surrounding renewable energy, and which seem to be affecting policy development in Australia.
In a report released last week, the IEA said that variable renewable energy sources such as solar and wind could carry the bulk of the transition needed to a decarbonised energy system.
Not only did it point out that solar and wind are now competing with fossil fuel on price (solar with gas, and wind with coal), but it notes that the cost of integration is also very small.
For a start, it notes, wind and solar do not need new back-up generation. “No additional dispatchable capacity ever needs to be built because VRE (variable renewable energy like solar and wind) is in the system,” it notes. “On the contrary, to the extent of the capacity credit of VRE, its addition to the system reduces the need for other capacity.”
The IEA says that ever since electrification began in the late 19th century, variability and uncertainty have been features of the grid – mostly through demand but also in supply. Indeed, the largest source of uncertainty comes from the failure of large coal or gas plants or other system components, and these can cause abrupt and unexpected variations in supply.
The IEA also notes are very few grid-related costs to absorb even high shares of wind and solar.
The PV Parity Project recently assessed grid costs associated with integrating 480 gigawatts (yes, gigawatts, or 480,000MW) of solar PV by 2030 into the European grid, found modest transmission grid costs of up to $4.00/MWh by 2030. Reinforcing distribution networks to accommodate solar PV would cost about $13/MWh by 2030.
The additional costs for accommodating small‐scale solar photovoltaic (PV) generation on the distribution level are as low as $1/MWh for a PV system size featuring 2.5 kilowatt per household – if the grid is planned properly from the onset.
More importantly, there are system benefits that might outweight the cost of generation of wind and solar and so lower the overall cost of the grid. This is borne out in reduced need for peak generation – as Australia found out in its recent heatwaves – and by lowering the overall wholesale electricity cost – as all Australian generators have found out in recent years.
The IEA study also noted that in Europe, wind penetration levels of 10 per cent would add less than $1/MWh to grid costs, and penetration levels of 13 per cent would require around $5.40/MWh.
A separate study in Ireland suggested that the grid costs of wind power penetrations ranging from 16 per cent to 59 per cent ranged from just $2.20/MWh to $9.70/MWh.
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