Thu / 16.06. @ 11:30
In recent years increasing shares of variable renewable energy sources (RES) have changed the structure of electricity markets especially in Western Europe remarkably. Due to this development, currently, the whole electricity system is at a crucial crossing. On the one hand, the way to a sustainable electricity system based mainly on RES could be paved in the next years. In this context we emphasize especially the considerable price decreases of PV which has brought this technology close to cost-effectiveness on household level. On the other hand, there are forces which try to retain the old centralized fossil and nuclear-based generation planned economies, e.g. France and England.
The core objective of this work is to provide insights how to integrate even larger quantities of variable RES-E into the electricity system by using market-based principles and how, straightforward, a sustainable electricity system could work. This market-based approach should ensure that competitive forces rather governmental interferences shape the future of the energy system and that in principle no comprehensive capacity mechanisms are necessary.
Our major finding is that we suggest a market-based approach to ensure that competitive forces rather than governmental interferences as capacity mechanisms shape the future of the energy system. Most important is to include a broad portfolio of flexibility options to balance variations in residual load. The most important options are:
- short-term and long-term storages – batteries, hydro storages, or chemical storages like hydrogen or methane;
- technical demand-side management measures conducted by utilities like cycling, Load Management, e.g. of cooling systems)
- Demand response due to price signals mainly from large customers to price changes, time-of-use pricing time-of-use pricing
- Transmission grid extention leadsin principle to flatter load and flatter generation profiles;
- Smart grids: They allow variations in frequency (upwards and downwards regulation) and switch of voltage levels and contribute in this context to a load balancing
- More flexibility in the organization of the market is required;
In addition, to harvest the full potential of flexibilityoptions the links have to be extended to transport and heat Yet, currently the market does not yet provide the proper price signals to trigger these options because today we have actually a very flat and low price curve over a year.
The major conclusions of this analysis are: The transition towards a competitive and sustainable future electricity system will be based on an approach of “new thinking” which is to accept a paradigm shift in the whole electricity system. This includes switching to a more flexible and smarter system allowing a greater scope for demand participation, storage options and other flexibility measures. Developing such a system implies also that no politically motivated capacity mechanisms are needed.
The evolution of such a creative system of integration of RES in Western Europe may also serve as a role model for electricity supply systems largely based on RES in other countries world-wide.