Economic Grid Support from Variable Renewables

REserviceS has developed policy recommendations for future network codes and market design in the area of grid support services from variable renewables. The project has received funding from the Intelligent Energy Europe programme of the European Union and EWEA is the coordinator.

Running time: April 2012 – September 2014

High shares of variable renewables providing energy and supporting the grid can save up to 6% on total electricity system costs, according to the findings of the REserviceS project.

The REserviceS project also found that creating markets to trade grid support services (GSS) can provide revenue streams for generators, in addition to energy-only markets.

Wind and solar photovoltaic (PV) energy is capable of providing GSS such as frequency and voltage control, although these services are not yet remunerated.

GSS - also known as ancillary services - will be an essential part of a truly integrated Internal Energy Market (IEM) and, consequently, should be treated as a commodity much the same as electricity.

Ivan Pineda, head of policy analysis at EWEA, commenting on the results, said: "This project confirms that not only can variable renewables contribute to system reliability, but under market-based approaches, wind and solar PV can also reduce system operation costs".

In a speech last week, Germany's Economic Affairs and Energy Minister Sigmar Gabriel warned that lowering system costs is the next big challenge facing the wind industry. He claimed that although technology outlays had come down, the resources required to integrate wind power into the grid continue to increase.

But Pineda said: "The mainstream tends to think that wind integration is too expensive. The turbine and project costs have been reduced and now people are looking at integration costs as the showstopper for wind. If we integrate wind into the current system, without any changes, it is expensive but the beauty of the recommendations in REserviceS is that elements of the power system must change if we want to lower such costs."

The project, which spanned over two years, investigated the adjustments required to allow wind and solar PV energy to fully participate in providing GSS, also addressing the question of remuneration.

One of the recommendations is that GSS, where a market is feasible, should be considered an alternative to compulsory (non-remunerated) requirements, as it is not always necessary or cost-efficient to impose such requirements across the board from all generators.

Market-based remuneration, however, can incentivise cost-reduction and innovation. Moreover, it spurs electricity generators to provide the services at the lowest costs, irrespective of their technology.

Sharon Wokke, project manager at EWEA, highlighted the benefits of projects like REserviceS. She said: "EU-funded projects are a beneficial way of driving your R&D activities, cooperating with a full range of stakeholders relevant to the project’s topic, and gaining visibility within the European Commission".

Other partners in the project consortium were EPIA, 3E, VTT, Fraunhofer IWES, Acciona, NUID UCD, DTU Wind, EDSO for Smart Grids, Mainstream, SMA, GE.

All recommendations and the full publication can be downloaded at www.reservices-project.eu.

Project website: www.reservices-project.eu