Cost-efficient integration of variable renewable electricity - Variation management and strategic localisation of new demand

Abstract: The aim of this work was to improve our understanding of how wind power and solar photovoltaics (PV) can be integrated into the European electricity system in a cost-efficient manner. For this, a techno-economic, cost-minimising model of the electricity system is refined for a number of case studies. The case studies cover different geographical scopes, ranging from isolated regions that have different conditions for wind and solar power to larger areas of Europe, and employ various strategies for variation management. Variation management can be provided by strategies that are internal to the electricity system, such as flexible bio-based generation, battery storage, and trade, as well as measures that become available from the electrification of the industry, transportation, and heating sectors. The results show that there is a need for different variation management strategies (VMS) in different system contexts. In regions with exceptionally good conditions for variable renewable electricity (VRE), wind and solar power integration benefits from absorbing strategies, which create value for electricity at low-net-load and negative-net-load events. In regions where the conditions for VRE are not adequate to out-compete baseload generation, complementing technologies that reduce the net-load during high-net-load events are needed to enable cost-efficient wind and solar power integration. Shifting strategies, which manage variations of short duration and high frequency, are primarily suited to the diurnal variations of solar PV. Solar PV can also be efficient at supplying electricity for hydrogen production for steel or other industries, especially if the demand is flexible over the year, such that the seasonality of solar power does not result in a demand for costly complementing technologies during wintertime. Variation management can increase the cost-efficient share of VRE that can be integrated into the system, while reducing the total cost of meeting the demand for electricity. One of the strongest VMS covered in this work involves optimising the charging of electric vehicles together with vehicle-to-grid exchange (discharging from electric cars to the grid), which can reduce the cost of electricity generation by up to 33% in a solar-dominated system. The same strategy reduces the cost by only 8% in a wind power- and hydropower-rich region with inherent flexibility, which highlights the importance of context when addressing the future electricity system. Trading electricity through transmission can be useful for integrating wind and solar power, in that transmission can smoothen wind variations between regions and it can transfer electricity from electricity systems with superior wind or solar power resources. A scarcity of bioenergy would entail a high value being placed on available biomass that is to be used for the purpose of complementing wind and solar power. To maximise the provision of flexibility through biomass, it could be utilised with negative-emissions technologies to enable the usage of fossil-derived natural gas. Bio-based generation that is deployed to meet net-negative emissions targets would, however, not provide flexibility. Nonetheless, biomass gasification with carbon capture and storage and utilisation could deliver both a flexible fuel and negative emissions. This could also provide absorbing VMS, if the utilisation part is designed to run flexibly by enabling enhanced biogas production during low-net-load periods. The combination of transformation and expansion of the electricity system may result in large regional differences in available VRE resources. In addition to transmission, strategic localisation of new electricity demands to regions with good resources becomes beneficial from the perspectives of economics and VRE integration. The results of this work underline the importance of combining different technologies and strategies and demonstrates the value of using them where they are best suited rather than deploying one strategy to tackle every situation.