UK & Germany on course for 50% renewables by mid 2020s, finds BNEF report

Tumbling solar and wind costs will drive renewables penetration to 50% on the energy networks of Germany and the U.K. by the mid 2020s – although the volatile and variable nature of such energy sources means both power grids will still require the same back-up capacity of inflexible baseload power in 2040 as they need today.

This was the headline finding from a new report released by Bloomberg New Energy Finance (BNEF) and commissioned by the Renewable Energy Association (REA) of the U.K., in partnership with Eaton.

Titled Beyond the tipping point: flexibility gaps in future high-renewable energy systems in the U.K., Germany and the Nordics, the report states that ‘economic tipping points’ will drive renewables to more than 50% of electricity generation within a decade. Some days – even particularly windy and/or sunny weeks – grids in these nations will run entirely on renewable energy. However, there will be occasions where low winds and cloudy skies necessitate the use of inflexible baseload generators to plug the gaps left by variable power generation sources.

Complementing the growth of solar and wind penetration will be energy storage, which will help to ease the transition between flexible and inflexible sources of power, the report found. The danger of renewables curtailment is minimal, said BNEF, with less than 1% of UK and 3% of German solar and wind power wasted by 2030. This figure does rise to 3% and 16% respectively by 2040, however.

“This study highlights a seismic shift in how power systems will operate in future. As wind and solar become the cheapest options for power generation, the race is on to develop and deploy the flexible resources that will complement them,” said Albert Cheung, head of global analysis at BNEF.

Eaton’s distributed energy segment manager for EMEA, Louis Shaffer, said that the study was commissioned to better understand the size of the challenge facing national grids, and how to better invest and implement the correct methods and technologies to respond to such variability.

“These solutions could include continued promotion of smart metering, reforms to increase market openness and transparency for all grid ancillary services and long-term grid service contracts and pricing schemes. We will also analyse the benefits of various policy options for the future of the energy market that include battery storage,” Shaffer added.

The REA’s chief executive Nina Skorupska remarked that the study showed how wind and solar are now the cheapest form of new build generation capacity, and will continue to see dramatic cost reductions over the next decade or so. “Massive increases in future renewable power generation mean that industry and government must start planning now to ensure low-carbon, cost-effective ways of balancing demand and supply,” she said. “We believe that there is a role for fuelled renewable technologies such as bioenergy and energy from waste to provide the complementary baseload generation that will be required, to avoid the need for carbon intensive generation at all. This study shows that battery storage is well placed to serve short term supply and demand issues and highlights the dramatic cost reductions in renewable power over the past few years.”