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 an EU-funded project.
The REserviceS project – led by the European Wind Energy Association (EWEA) and involving other stakeholders from across the electricity system and academia – also found that creating markets to trade grid support services (GSS) can provide revenue streams for generators, in addition to energy-only markets.
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”.
“Grid support services are the neglected commodity from the liberalisation of energy markets. For the first time we know the potential market value of such services when provided by renewables”.
The project, which spanned 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.
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 on the Reservices Project website.