Executive summary
Renewables are rapidly transforming power systems worldwide An additional 2400 GW of renewables power capacity is forecast to be installed by 2027, equal to renewables growth over the last 20 years or to the total current installed capacity of China, as countries seek to improve their energy security, meet emission reduction targets and take advantage of cheaper electricity sources. Renewables are set to account for over 90% of global power capacity expansion between now and 2027. Renewables become the largest source of global electricity generation by 2025, surpassing coal. Their share of annual electricity generation is forecast to increase by 10 percentage points worldwide, reaching 38% in 2027. Over the period to 2030, renewables outpace overall electricity demand growth, and in the longer term are set to become the dominant source of electricity worldwide. Electricity from wind and solar PV more than doubles in the next five years, together providing almost 20% of global power generation in 2027. These variable renewables (VRE) will account for 80% of the increase in global renewable generation over the next five years, changing how power systems operate.

The factors behind rising energy demand Two major factors drive the increase in electricity demand in these scenarios. First, emerging market and developing economies (EMDE) increase their consumption in line with strong economic growth. Electricity demand in EMDEs grows by 60% from 2021 to 2030 in the APS, versus roughly 20% growth in advanced economies.

Drivers of electricity demand growth in the Announced Policies Scenario, 2021-2050

This leads to renewables becoming the dominant source of electricity worldwide in the long term. In 2021, renewables – including wind, solar PV, hydro, bioenergy, concentrated solar power, geothermal and marine – accounted for around 28% of global electricity generation. Under the APS, this share rises to around 49% by 2030 before reaching 80% in 2050.

Global electricity generation by source and scenario, 2010-2050

Flexibility needs will change as a result of higher shares of renewables The rapid growth in the penetration of wind and solar PV in electricity systems requires careful consideration of the effects of the variability and uncertainty of their output to ensure cost-effective and secure integration. No two systems are the same in terms of size, legacy infrastructure, solar and wind potential, or flexibility resources, and there are no simple rules that link a certain annual share of variable renewables (VRE) with specific integration actions or costs. However, the potential impacts of variable renewables on system operation can be categorised according to the characteristics just described, as well as operational practices and standards, demand patterns and market and regulatory design.

Seasonal variability Climate is defined as the average weather over a long period of time, typically 30 years or more. Different climates can be grouped into zones based on threshold values and the seasonality of monthly air temperatures and precipitation. Such regimes are largely governed by latitude and therefore occur mainly along the east-west direction around the Earth. However, local conditions can be significantly altered by variables like terrain, altitude, land use and proximity to water bodies and ocean currents.

World climate classification map

Modelling approach Simplified “example energy systems” have been created to study seasonal variability in different climatic conditions and under a large range of technological parameters. The objective is to understand which flexibility sources are relevant in the different climatic zones when dealing with long-duration variability. The following climate zones are simulated: Temperate (sub-type: hot summer), Tropical, Arid (sub-type: cold), and Continental (sub-type: warm summer), and the main seasonal characteristics of these systems are summarised.

Key seasonal attributes of examined example systems

Results Under the main assumptions, the share of variable renewables ranges from 70% to 90% of annual generation across all systems. The remaining electricity demand is supplied from hydropower and legacy thermal power plants, while various resources are used to provide flexibility services, depending on the system. At longer timescales, the role of thermal and hydro power plants in flexibility supply increases. The main results are discussed in detail in the following subsections.

Impact of industrial use of electrolytic hydrogen on co-firing with hydrogen in thermal power plants

Electrolytic hydrogen is not used for co-firing in the absence of industrial demand. However, even at low levels of industrial demand, low-emission hydrogen starts to provide services for the power sector – mostly through demand-side management via flexible operation of electrolysers, but also through co-firing in thermal power plants at a level of 5 to 15 GWhe/mp. At high levels of industrial demand, co-firing increases up to 20 GWhe/mp in the Tropical and Temperate example systems. Eventually, the amount of co-firing begins to saturate as demand increases.

Interannual variability In the studied systems, the variability extends also beyond seasonal timescales. The impact of such interannual variability (IAV) cannot be captured with singleyear time series or average meteorological conditions, since these do not capture years with smaller or higher than average annual renewables generation. To analyse IAV in the example systems, multi-year datasets were compiled using time series for hydro, wind and solar, as well as demand. The data used were from the same years to maintain temporal correlations. The objective is to understand which flexibility sources are most relevant in the different climatic zones, when dealing with multi-year variability. The datasets used range from seven consecutive years for the Tropical system to 17 years for the Temperate (hot summers) system. The length of the datasets was limited by data availability. Analysing multi-year time series makes it possible to track storage levels and changes to storage states over time, as well as how such variations affect a system’s flexibility requirements. That said, these multi-year datasets can be considered relatively short compared to standard hydropower analysis, which typically draws on at least 30 years of hydrological records (though sometimes, only modelled time series are available). Given this limitation, the analysis here cannot be considered definititive. However, it is still useful for illustrating the role of interannual variability in a high-VRE energy system.

Interannual variability in renewables generation by example system

Monthly generation by technology across a 12-year simulation of the Continental (warm summer) example system

The Arid (cold) system has the lowest interannual variability of both wind and solar PV. The monthly average wind generation varies by only 3% across the years, while the IAV of solar is 6%. There is a consistent slump in wind generation during the winter when the system must dispatch thermal plants to meet the residual load. Hydro has a relatively high IAV of 40% across the years. The flat seasonal availability of solar improves the feasibility of batteries as a short-term flexibility resource with 271 annual cycles on average. Monthly curtailments are spread across the year fairly evenly around the winter slump in VRE generation.

Comparing the additional cost of CCUS retrofitting and modification for low-emission fuel use of an existing thermal power plant

Another option for further reducing emissions from unabated fossil fuel plants is to increase the capacity of variable renewables. Oversizing will increase the level of generation from renewables, thereby reducing the residual load and the need for unabated fossil fuels. However, this will lead to increased curtailments during peak VRE generation. Over time, demand patterns can adjust to better absorb periods of oversupply, although to what extent depends on local system conditions. Energy efficiency policies should also consider this question and help accommodate renewables supply over the long term. Emissions from the use of unabated fossil fuels in thermal plants can also be offset by application of bioenergy with carbon capture and storage (BECCS) and direct air capture with storage (DACS). Biomass-based CO2 can be captured from power plants, but also from other bioenergy conversion processes such as biofuel plants, biomass heat boilers, as well as industrial kilns and furnaces delivering high temperature heat.

Conclusions
A mix of flexibility resources is needed to manage variability across all timescales This study explores the integration of variable renewables (VRE) beyond 70% share of annual generation. Four different climatic regions – Temperate (hot summer), Tropical, Arid (cold) and Continental (warm summer) – were studied using a model that in addition to legacy infrastructure optimises investments in wind, solar PV and flexibility resources to minimise overall system costs under given cost and performance assumptions. The results show that different mixes of flexibility resources – including grids, interconnections, demand response, energy storage, and dispatchable power plants – are required to manage variability across timescales and climatic regions. Short-duration flexibility services play a critical role in balancing the hourly and daily variation of renewables. Battery storage pairs well with systems that have high levels of solar radiation throughout the year that enables large amount of storage cycles in balancing the daily variation in solar PV supply. For example, in the Tropical and Arid systems, batteries provide around 40% of the short-duration flexibility requirements. In the Temperate and Continental systems, demand response provides 30%-35% of these requirements.

Source:http://IEA