Our most important findings

Grids

  1. 1

    Renewables will provide 50% of SEE power demand in 2030. The European energy transition is underway.

    By 2030, renewables will account for 55% of power generation in Europe, and 50% of power generation in SEE. Nearly 70% of renewable power in SEE will stem from wind and solar, given the excellent resource potential of these renewables in the region.

  2. 2

    Cross-border power system integration will minimise flexibility needs. Wind and solar pose challenges for power systems due to their variable generation. But weather patterns differ across countries.

    For example, wind generation can fluctuate from one hour to the next by up to 47% in Romania, whereas the comparable figure for Europe is just 6%. Moving from national to regional balancing substantially lowers national flexibility needs. Increased cross-border interconnections and regional cooperation are thus essential for integrating higher levels of wind and PV generation.

  3. 3

    Conventional power plants will need to operate in a flexible manner. For economic reasons, hard coal and lignite will provide less than 25% of SEE power demand by 2030.

    Accordingly, conventional power plants will need to flexibly mirror renewables generation: When renewables output is high, conventionals produce less, and when renewables output is low, fossil power plants increase production. Flexible operations will become an important aspect of power plant business models.

  4. 4

    Security of supply in SEE power systems with 50% RES is ensured by a mix of conventional power plants and cross-border cooperation.

    The available reserve capacity margin in SEE will remain above 35% in 2030. More interconnectors, market integration and regional cooperation will be key factors for maximising national security of supply and minimising power system costs. SEE can be an important player in European power markets by providing flexibility services to CEE in years of high hydro availability.

  1. 1

    The Japanese power system can accommodate a larger proportion of renewables (RES) than is currently provided for in the government’s 2030 targets, while still maintaining grid stability.

    An annual share of at least 33% RES (22% variable renewables – VRES) can easily be integrated, while still maintaining grid stability within a tolerable range. A higher renewable share of 40% (30% VRES) could also be achieved with very low curtailment level.

  2. 2

    There already exist a number of technical measures to improve grid stability in situations where a high proportion of variable renewables could place a strain on grid operations.

    Indeed, VRES can contribute to maintaining grid stability by providing fast frequency response (FFR). On conservative assumptions, this study shows that such FFR services would enable the existing Japanese transmission grid to incorporate instantaneous VRES penetration levels of up to 60% in eastern Japan and around 70% in western Japan, while still maintaining frequency stability. These assessments confirm the trends observed in 2018 in regions such as Kyushu or Shikoku, where hourly VRES penetration satisfied more than 80% of demand (corresponding to more than 55% of all power generation). By 2030, these high regional infeed levels could become the norm for the Japanese system as a whole. Furthermore, implementing additional technical measures would allow even higher penetration levels to be reached.

  3. 3

    Integrated grid and resource planning can help mitigate the impact of wind and solar PV deployment on intraregional and interregional load flows.

    Increasing the proportion of VRES in the mix is expected to reduce power line loading in some regions and increase it in other parts of the system. The impact of VRES distribution on the grid must therefore be systematically taken into account in future grid development plans, in order to avoid creating line-loading hotspots.

  4. 4

    Non-discriminatory market regulations, enhanced transparency, and state-of-the-art operational and planning practices facilitate the integration of a higher proportion of variable renewables.

    In particular, renewables should be incorporated into ancillary service provision, since they can contribute to frequency stability, balancing, and voltage control in tandem with other technologies (such as demand side response, conventional generation, and storage).

  1. 1

    The Japanese power system can accommodate a larger proportion of renewables (RES) than is currently provided for in the government’s 2030 targets, while still maintaining grid stability.

    An annual share of at least 33% RES (22% variable renewables – VRES) can easily be integrated, while still maintaining grid stability within a tolerable range. A higher renewable share of 40% (30% VRES) could also be achieved with very low curtailment level.

  2. 2

    There already exist a number of technical measures to improve grid stability in situations where a high proportion of variable renewables could place a strain on grid operations.

    Indeed, VRES can contribute to maintaining grid stability by providing fast frequency response (FFR). On conservative assumptions, this study shows that such FFR services would enable the existing Japanese transmission grid to incorporate instantaneous VRES penetration levels of up to 60% in eastern Japan and around 70% in western Japan, while still maintaining frequency stability. These assessments confirm the trends observed in 2018 in regions such as Kyushu or Shikoku, where hourly VRES penetration satisfied more than 80% of demand (corresponding to more than 55% of all power generation). By 2030, these high regional infeed levels could become the norm for the Japanese system as a whole. Furthermore, implementing additional technical measures would allow even higher penetration levels to be reached.

  3. 3

    Integrated grid and resource planning can help mitigate the impact of wind and solar PV deployment on intraregional and interregional load flows.

    Increasing the proportion of VRES in the mix is expected to reduce power line loading in some regions and increase it in other parts of the system. The impact of VRES distribution on the grid must therefore be systematically taken into account in future grid development plans, in order to avoid creating line-loading hotspots.

  4. 4

    Non-discriminatory market regulations, enhanced transparency, and state-of-the-art operational and planning practices facilitate the integration of a higher proportion of variable renewables.

    In particular, renewables should be incorporated into ancillary service provision, since they can contribute to frequency stability, balancing, and voltage control in tandem with other technologies (such as demand side response, conventional generation, and storage).

  1. 1

    The Japanese power system can accommodate a larger proportion of renewables (RES) than is currently provided for in the government’s 2030 targets, while still maintaining grid stability.

    An annual share of at least 33% RES (22% variable renewables – VRES) can easily be integrated, while still maintaining grid stability within a tolerable range. A higher renewable share of 40% (30% VRES) could also be achieved with very low curtailment level.

  2. 2

    There already exist a number of technical measures to improve grid stability in situations where a high proportion of variable renewables could place a strain on grid operations.

    Indeed, VRES can contribute to maintaining grid stability by providing fast frequency response (FFR). On conservative assumptions, this study shows that such FFR services would enable the existing Japanese transmission grid to incorporate instantaneous VRES penetration levels of up to 60% in eastern Japan and around 70% in western Japan, while still maintaining frequency stability. These assessments confirm the trends observed in 2018 in regions such as Kyushu or Shikoku, where hourly VRES penetration satisfied more than 80% of demand (corresponding to more than 55% of all power generation). By 2030, these high regional infeed levels could become the norm for the Japanese system as a whole. Furthermore, implementing additional technical measures would allow even higher penetration levels to be reached.

  3. 3

    Integrated grid and resource planning can help mitigate the impact of wind and solar PV deployment on intraregional and interregional load flows.

    Increasing the proportion of VRES in the mix is expected to reduce power line loading in some regions and increase it in other parts of the system. The impact of VRES distribution on the grid must therefore be systematically taken into account in future grid development plans, in order to avoid creating line-loading hotspots.

  4. 4

    Non-discriminatory market regulations, enhanced transparency, and state-of-the-art operational and planning practices facilitate the integration of a higher proportion of variable renewables.

    In particular, renewables should be incorporated into ancillary service provision, since they can contribute to frequency stability, balancing, and voltage control in tandem with other technologies (such as demand side response, conventional generation, and storage).

  1. 1

    Increased integration between the Nordic countries and Germany will become ever more important as the share of renewables increases. The more renewables enter the system, the higher the value of additional transmission capacity between Nordic countries and Germany will become.

    In particular, additional generation from renewables in the Nordics – reflected in the Nordic electricity balance - will increase the value of transmission capacity. There is a lot of potential for trade, due to hourly differences in wholesale electricity prices throughout the year.

  2. 2

    A closer integration of the Nordic and the German power systems will reduce CO2 emissions due to better utilisation of renewable electricity.

    This is caused by reduced curtailment of renewables, improved integration of additional renewable production sites and increased competitiveness of biomass-fuelled power plants.

  3. 3

    Higher integration will lead to the convergence of wholesale electricity prices between the Nordic countries and Germany. But even with more integration, the Nordic countries will see lower wholesale electricity prices if they deploy large shares of renewables themselves.

    In general, additional integration will lead to slightly higher wholesale electricity prices in the Nordics and to slightly lower prices in Germany. But this will be counteracted by the decreasing price effect that higher wind shares in the Nordics have on the wholesale power market.

  4. 4

    Distributional effects from increased integration are significantly higher across stakeholder groups within countries than between countries.

    This strongly impacts the incentives of market players such as electricity producers or consumers (e.g., energy-intensive industries) for or against increased integration. Distributiona leffects need to be taken into account for creating public acceptance for new lines and for the cross-border allocation of network investments.

  1. 1

    Increased integration between the Nordic countries and Germany will become ever more important as the share of renewables increases. The more renewables enter the system, the higher the value of additional transmission capacity between Nordic countries and Germany will become.

    In particular, additional generation from renewables in the Nordics – reflected in the Nordic electricity balance - will increase the value of transmission capacity. There is a lot of potential for trade, due to hourly differences in wholesale electricity prices throughout the year.

  2. 2

    A closer integration of the Nordic and the German power systems will reduce CO2 emissions due to better utilisation of renewable electricity.

    This is caused by reduced curtailment of renewables, improved integration of additional renewable production sites and increased competitiveness of biomass-fuelled power plants.22

  3. 3

    Higher integration will lead to the convergence of wholesale electricity prices between the Nordic countries and Germany. But even with more integration, the Nordic countries will see lower wholesale electricity prices if they deploy large shares of renewables themselves.

    In general, additional integration will lead to slightly higher wholesale electricity prices in the Nordics and to slightly lower prices in Germany. But this will be counteracted by the decreasing price effect that higher wind shares in the Nordics have on the wholesale power market.3

  4. 4

    Distributional effects from increased integration are significantly higher across stakeholder groups within countries than between countries.

    This strongly impacts the incentives of market players such as electricity producers or consumers (e.g., energy-intensive industries) for or against increased integration. Distributiona leffects need to be taken into account for creating public acceptance for new lines and for the cross-border allocation of network investments.

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