The cost to generate electricity from wind and solar has significantly declined in recent years – in fact, the levelized cost of electricity of wind energy and solar PV is now below that of conventional power in many parts of the world, and further cost reductions are expected. Across the globe, more and more countries are therefore planning to add significant amounts of renewable energy to their electricity systems.
Yet wind and solar power plants are different from conventional power plants in one key respect: They provide electricity when the wind blows and the sun shines, but cannot be switched on based on demand. Furthermore, they are often built far away from high demand areas, which may create a need for new grid infrastructure. Therefore, in order to compare the cost of power from wind and solar with that of coal and gas, the term “integration cost” is often used.
The proper measurement of integration costs is a hotly debated subject in academic and policymaking circles. To shed more light on this debate, we conducted two expert workshops in Germany and France, inviting experts from the domains of academia, industry and politics to discuss different perspectives on integration costs. The following paper is the product of this discussion and our own analysis.
With this paper, our aim is not to “solve” this issue. Rather, we hope to make a positive contribution to informed debate.