A growing number of countries are announcing increasingly ambitious renewable energy targets. But how do you deliver the results? IRENA’s Elena Ocenic explains that they have developed a toolset for countries to plot their unique pathway to success. Those tools range widely across technology, market design and regulation, system operation practices, and business models. The article lists the tools, and runs through some notable successes. Ocenic emphasises that, today, there is enough evidence to show that 80-100% renewables within decades is a realistic goal for many countries. She looks at the tailored solution they have created for Sweden, in collaboration with the Swedish Energy Agency, to achieve 100% renewable power by 2040. An important observation is that technology alone is never enough: the right policy frameworks must be put in place too. And one of the biggest challenges is how to maximise renewables beyond the power sector and in to the industrial, transport and buildings sectors while making use of all the new innovations now coming to the fore.
IRENA recently published a detailed case study “Innovative solutions for 100% renewable power in Sweden” which provides 4 tailor-made solutions to help integrate high shares of wind into Sweden’s power system by 2040. Recommendations build on experience from pilot projects and best practice from around the world documented in IRENA’s “Innovation landscape for a renewable-powered future” report and call for a revamp of technology, market design and regulation, system operation practices, as well as business models.
This article explains why pursuing highly ambitious policy targets for renewable power (as opposed to energy) are timely, which innovations are ready to be scaled up, and which countries have already experience operating a renewable-based power system. The Swedish case can inspire other countries to raise renewable power targets.
Pursuing 100% renewable power policies
The world needs an energy transition and leading countries are raising ambitions. As of 2019, over 40 IRENA members had some form of 100% renewable energy target, while 12 have specific targets of 80-100% renewable power by 2020-2050. Germany for example is targeting “at least 80%” renewable power by 2050, while Sweden and Spain are aiming for 100% renewable power by 2040 and 2050, respectively.
Whereas hydro- (Brazil, Norway, Paraguay) and geothermal-based cases (Iceland) are well-known, the challenge is to develop power systems dominated by variable solar photovoltaic (PV) and wind.
Such strategies have global relevance. Power system transformation is at the forefront of this effort: according to IRENA’s latest scenarios, renewable power combined with deep electrification of transport and heating can contribute to 60% of the energy-related CO₂ emissions reductions needed by 2050.
With hydropower as a backbone, 100% renewable power is possible today
In 2019, renewables accounted for 99% and 98% of the power generated in the hydro-rich Costa Rica and Uruguay, with variable renewable energy (VRE) generation accounting for 17% (17% wind, 0.1% solar) and 36% (33% wind, 3% solar), respectively.
In Europe, in 2019, VRE generation represented over 62% in Denmark (58% wind, 4% solar PV) and over 33% in Germany (24% wind, 9% solar PV). Some sub-regions have gone further, like the German grid area operated by 50Hertz which recorded 60% of the power consumed in 2019 from renewables.
Many technology-driven innovations can be scaled up now
Innovation is driving the global energy transformation and has enabled dramatic cost reductions for solar PV and wind. But as we accelerate this transformation, unlocking flexibility across the entire value chain of power systems is crucial for the cost-efficient integration of VRE.
Based on over 200 real-world pioneering projects, IRENA mapped 30 key innovations across 4 dimensions that have the potential to transform power systems either incrementally or radically:
- Enabling technologies: battery storage, renewable power-to-heat, renewable power-to-hydrogen, digital technologies (Internet-of-Things, Artificial Intelligence and Big Data, Blockchain), smart grids and refurbishment of existing assets;
- Business models: new mechanisms for prosumers and schemes for on- and off-grid renewable power supply (e.g. aggregators, peer-to-peer electricity trading);
- Market design and regulations: wholesale market changes encouraging flexibility, providing better price signals and introducing remuneration schemes for grid services (e.g. refined time and space granularity), retail market changes stimulating consumer flexibility (e.g. time-of-use tariffs);
- System operation: new ways of operating distribution grids, market integration of distributed energy resources (e.g. EVs), new operational procedures enhancing flexibility (e.g. advanced weather forecasting for refined generation forecasts), virtual power lines and dynamic line rating.
Pioneering the energy transition: a wide range of projects
Sweden is already showcasing many disruptive solutions. Demand-side flexibility is expected to play an important role in Sweden by 2040, with tomorrow’s ‘smart homes’ and digital technologies managing the assets, which would otherwise become a burden to the distribution system. Smart charging EVs, time-of-use tariffs and the planned data hub in Sweden, are all part of the solution. Another Swedish project entitled ‘Hydrogen Breakthrough Ironmaking Technology’ (HYBRIT) aims to decarbonise the iron and steel industry.
Solutions from elsewhere can be considered in a Swedish context. In attempt to decarbonise the transport sector, smart charging EVs coupled with renewables offer an obvious solution. Additionally, renewable power-to-hydrogen can be adopted in virtually any transport application where greenhouse gas-emitting fossil fuels are currently used, from ships, trains, cars to bikes, such as the renewable hydrogen passenger ferry HYSeas III (floating offshore wind, wave and tidal energy, Scotland), the renewable hydrogen-fueled Energy Observer vessel (solar PV, France), the first hydrogen train in Lower Saxony (Germany), or the highly ambitious hydrogen roadmaps in China, Japan and Republic of Korea.
Meanwhile, the infrastructure network of hydrogen filling stations for Fuel Cell Electric Vehicles is rapidly expanding across Europe, and 82 stations are operational in Germany.
Sweden: innovative solutions for 100% renewable power by 2040
In 2019, IRENA convened 4 international workshops, as well as a national workshop with Swedish stakeholders. Building on this network and the Swedish case study, starting in 2020 a working group for IRENA members will be exchanging best practice on how to incorporate solutions at country-level and this case-study will be repeated elsewhere.
In collaboration with the Swedish Energy Agency, IRENA assessed which innovative solutions could best help Sweden achieve its policy target by 2040. In 2017, Swedish electricity production was almost entirely decarbonised with 40% hydro, 39% nuclear, 11% wind power and 10% combined heat and power fuelled predominantly by renewables.
By 2040, the share of variable renewables in the power system is estimated to reach 42% (39% wind, 3% solar PV). This will be enabled by more interconnections used for cross-border trading with neighbours, participation in the pan-European electricity market, climate-friendly, market-based policies, and strong innovation support.
In the meantime, some challenges to be addressed are:
- Ensuring power system stability, because annual average inertia is expected to decrease from 202 GWs (2020) to 159 GWs (2040).
- Balancing demand and supply, because there is greater consumption in the South and significant hydropower generation in the North.
- Expanding the network, because of the long lead times for distribution and transmission infrastructure projects (EUR 15 billion to be invested by 2025).
4 tailor-made solutions
By combining innovations in the four dimensions, i.e. enabling technologies, business models, market design and system operation, 4 tailor-made solutions are proposed to integrate higher shares of wind:
While each solution addresses a segment of the power sector value chain, a holistic approach creates major system-wide flexibility options, including direct and indirect (i.e. via hydrogen produced from renewables through electrolysis) electrification of end-use sectors. With new applications in transport, buildings and industry, doors are open for services supporting the transmission grid, turning EV smart charging technologies, energy storage and electrolysers into valuable assets.
An essential insight is that technology alone is not enough. Enabling frameworks must be adjusted to ensure a smooth transition. As ‘one-size-does-not-fit-all’, a detailed and independent assessment is needed to identify what “toolbox” elements have national relevance.
It is possible in Sweden!
The availability of a wide-range of technology-driven innovations ready to be scaled up, the examples of success in other countries and the essential infrastructure in place indicate that delivering a 100% renewable power system in Sweden with solar and wind reaching over 40% by 2040 is achievable. In Sweden, and elsewhere, the question remains how to maximize renewables beyond the power sector, in the industry, transport and buildings sectors. Sector coupling through direct and indirect electrification will play a key role in decarbonising those sectors whilst also unlocking new flexibility potentials.
Elena Ocenic is a Program Officer, Innovation Networks at IRENA