Skip to main content

Thank you for visiting nature.com. You are using a browser version with limited support for CSS. To obtain the best experience, we recommend you use a more up to date browser (or turn off compatibility mode in Internet Explorer). In the meantime, to ensure continued support, we are displaying the site without styles and JavaScript.

A systematic review of the costs and impacts of integrating variable renewables into power grids

Abstract

The impact of variable renewable energy (VRE) sources on an electricity system depends on technological characteristics, demand, regulatory practices and renewable resources. The costs of integrating wind or solar power into electricity networks have been debated for decades yet remain controversial and often misunderstood. Here we undertake a systematic review of the international evidence on the cost and impact of integrating wind and solar to provide policymakers with evidence to inform strategic choices about which technologies to support. We find a wide range of costs across the literature that depend largely on the price and availability of flexible system operation. Costs are small at low penetrations of VRE and can even be negative. Data are scarce at high penetrations, but show that the range widens. Nonetheless, VRE sources can be a key part of a least-cost route to decarbonization.

Access options

Rent or Buy article

Get time limited or full article access on ReadCube.

from$8.99

All prices are NET prices.

Fig. 1: Breakdown of dataset by category of impact.
Fig. 2: Data for operating reserve, capacity adequacy, aggregated and profile costs.
Fig. 3: Operating reserves costs.
Fig. 4: Capacity adequacy costs.
Fig. 5: Operating reserve, capacity adequacy, aggregated and profile costs.
Fig. 6: Capacity credit data by VRE type.

Data availability

The quantitative data shown in Figs. 26 and described in this paper (and in the Supplementary Information) are available in the Supplementary Data. The data are also deposited with the UKERC Energy Data Centre, a UK Research Councils funded data repository hosted by the STFC Rutherford Appleton Laboratory (https://ukerc.rl.ac.uk/), with serial no. EDC0000162 at https://doi.org/10.5286/ukerc.edc.000010.

References

  1. 1.

    Jansen, M. et al. Offshore wind competitiveness in mature markets without subsidy. Nat. Energy 5, 614–622 (2020).

  2. 2.

    Ford, J. Nuclear is less costly than you think. Financial Times (27 January 2019).

  3. 3.

    Helm, D. Cost of Energy Review (Department for Business, Energy & Industrial Strategy, 2017).

  4. 4.

    System Integration of Renewables—An update on Best Practice (International Energy Agency, 2018).

  5. 5.

    Analysing Technical Constraints on Renewable Generation to 2050—A report to the Committee on Climate Change (Pöyry, 2011).

  6. 6.

    Gross, R. et al. Renewables and the grid: understanding intermittency. Proc. ICE Energy 160, 31–41 (2007).

  7. 7.

    Gross, R. et al. The Costs and Impacts of Intermittency (UK Energy Research Centre, 2006).

  8. 8.

    Heptonstall, P., Gross, R. & Steiner, F. The Costs and Impacts of Intermittency—2016 Update (UK Energy Research Centre, 2017).

  9. 9.

    Renewables 2019 Global Status Report (REN21 Secretariat, 2019).

  10. 10.

    Renewable Energy Statistics 2017 (International Renewable Energy Agency, 2017).

  11. 11.

    Lazard’s Levelized Cost of Energy analysis—Version 12.0 (Lazard, 2018).

  12. 12.

    Contracts for the Hinkley Point C (Department for Business, Energy & Industrial Strategy, 2016).

  13. 13.

    Contracts for Difference (CfD) Allocation Round 3: Results (Department for Business, Energy & Industrial Strategy, 2019).

  14. 14.

    Quarterly Report on European Electricity Markets (Market Observatory for Energy, DG Energy, 2019).

  15. 15.

    Mills, A. & Wiser, R. Changes in the Economic Value of Variable Generation at High Penetration Levels: A Pilot Case Study of California (Ernest Orlando Lawrence Berkeley National Laboratory, 2012).

  16. 16.

    Ueckerdt, F., Hirth, L., Luderer, G. & Edenhofer, O. System LCOE: what are the costs of variable renewables? Energy 63, 61–75 (2013).

    Article  Google Scholar 

  17. 17.

    Hirth, L., Ueckerdt, F. & Edenhofer, O. Integration costs revisited—an economic framework for wind and solar variability. Renew. Energy 74, 925–939 (2015).

    Article  Google Scholar 

  18. 18.

    The Future of Solar Energy (Massachusetts Institute of Technology, 2015).

  19. 19.

    Heuberger, C. F., Staffell, I., Shah, N. & Dowell, N. M. A systems approach to quantifying the value of power generation and energy storage technologies in future electricity networks. Comput. Chem. Eng. 107, 247–256 (2017).

    Article  Google Scholar 

  20. 20.

    Sepulveda, N. A., Jenkins, J. D., de Sisternes, F. J. & Lester, R. K. The role of firm low-carbon electricity resources in deep decarbonization of power generation. Joule 2, 2403–2420 (2018).

    Article  Google Scholar 

  21. 21.

    Jenkins, J. D., Luke, M. & Thernstrom, S. Getting to zero carbon emissions in the electric power sector. Joule 2, 2498–2510 (2018).

    Article  Google Scholar 

  22. 22.

    The New Economics of Offshore Wind (Aurora Energy Research Ltd., 2018).

  23. 23.

    Musker, T. Wholesale Power Price Cannibalisation (Cornwall Insight, 2018).

  24. 24.

    Strbac, G. & Aunedi, M. Whole-system Cost of Variable Renewables in Future GB Electricity System, Joint Industry Project with RWE Innogy, Renewable Energy Systems and Scottish Power Renewables. (E3G,: 2016).

  25. 25.

    Müller, S. et al. (eds) System Integration Costs—A Useful Concept that is Complicated to Quantify? (Wind Integration Workshop, 2019).

  26. 26.

    The Grid Code (National Grid Electricity Transmission, 2016).

  27. 27.

    National Grid Balancing Services 2019 (National Grid, 2019); https://www.nationalgrideso.com/balancing-services

  28. 28.

    Rebours, Y. G., Kirschen, D. S., Trotignon, M. & Rossignol, S. A survey of frequency and voltage control ancillary services. Part I: technical features. IEEE Trans. Power Syst. 22, 350–357 (2007).

    Article  Google Scholar 

  29. 29.

    Ela, E. et al. (eds) Evolution of operating reserve determination in wind power integration studies. In IEEE PES General Meeting 1–8 (IEEE, 2010).

  30. 30.

    Dowell, J., Hawker G., Bell K. & Gill S. (eds) A Review of probabilistic methods for defining reserve requirements. In 2016 IEEE Power and Energy Society General Meeting (PESGM) 1–5 (IEEE, 2016).

  31. 31.

    Holttinen, H. et al. Design and Operation of Power Systems with Large Amounts of Wind Power Final Summary Report, IEA WIND Task 25, Phase Three 2012–2014 (VTT Technical Research Centre, 2016).

  32. 32.

    Dent, C. J. et al. (eds) The role of risk modelling in the Great Britain transmission planning and operational standards. In 2010 IEEE 11th International Conference on Probabilistic Methods Applied to Power Systems (PMAPS) 325–330 (IEEE, 2010).

  33. 33.

    Holttinen, H. et al. Design and Operation of Power Systems with Large Amounts of Windpower Final Report, IEA WIND Task 25, Phase One 2006–2008. (VTT Technical Research Centre of Finland, 2009).

  34. 34.

    Elliott, D. A balancing act for renewables. Nat. Energy 1, 15003 (2016).

    Article  Google Scholar 

  35. 35.

    Joos, M. & Staffell, I. Short-term integration costs of variable renewable energy: wind curtailment and balancing in Britain and Germany. Renew. Sustain. Energy Rev. 86, 45–65 (2018).

    Article  Google Scholar 

  36. 36.

    Electricity security of supply—A commentary on National Grid’s Future Energy Scenarios for the Next Three Winters (Ofgem, 2015).

  37. 37.

    Nuclear Energy and Renewables: System Effects in Low-carbon Electricity Systems (Organisation for Economic Co-operation and Development, Nuclear Energy Agency, 2012).

  38. 38.

    2015/16 Winter Outlook Report Warwick (National Grid, 2015).

  39. 39.

    Electricity Capacity Assessment Report 2014 (Ofgem, 2014).

  40. 40.

    Skea, J. et al. Intermittent renewable generation and the cost of maintaining power system reliability. IET Gener. Transm. Distrib. 2, 82–89 (2008).

    Article  Google Scholar 

  41. 41.

    Ensslin, C., Milligan, M., Holttinen, H., Malley, M. O. & Keane, A. (eds) Current methods to calculate capacity credit of wind power. In 2008 IEEE Power and Energy Society General Meeting—Conversion and Delivery of Electrical Energy in the 21st Century 1–3 (IEEE, 2008).

  42. 42.

    Keane, A. et al. Capacity value of wind power. IEEE Trans. Power Syst. 26, 564–572 (2011).

    Article  Google Scholar 

  43. 43.

    Milligan, M. & Porter, K. Determining the Capacity Value of Wind: An Updated Survey of Methods and Implementation (NREL, 2008).

  44. 44.

    Hirth, L. The market value of variable renewables: the effect of solar wind power variability on their relative price. Energy Econ. 38, 218–36. (2013).

    Article  Google Scholar 

  45. 45.

    Few, S. Solutions to the Problem of Over-plotting in Graphs Visual Business Intelligence Newsletter (Perceptual Edge, 2008); https://web2.utc.edu/~fgg366/4270/4270Notes/Text/Ch03/over-plotting_in_graphs.pdf

  46. 46.

    Power Sector Modelling: System Cost Impact of Renewables Report for the National Infrastructure Commission (Aurora Energy Research Limited, 2018).

  47. 47.

    Accelerated Electrification and the GB Electricity System Report Prepared for Committee on Climate Change (Vivid Economics, Imperial College London, 2019).

  48. 48.

    Market Observatory for Energy Quarterly Report on European Electricity Markets (European Commission, Directorate-General for Energy, 2019).

  49. 49.

    Pudjianto D., Djapic P., Dragovic J. & Strbac G. Grid Integration Cost of Photovoltaic Power Generation: Direct Costs Analysis related to Grid Impacts of Photovoltaics (Imperial College London, 2013).

  50. 50.

    Milligan, M. et al. Integration of variable generation, cost-causation, and integration costs. Electr. J. 24, 51–63 (2011).

    Google Scholar 

  51. 51.

    Gorman, W., Mills, A. & Wiser, R. Improving estimates of transmission capital costs for utility-scale wind and solar projects to inform renewable energy policy. Energy Policy 135, 110994 (2019).

    Article  Google Scholar 

  52. 52.

    Perez, R., Taylor, M., Hoff, T. & Ross, J. P. Reaching consensus in the definition of photovoltaics capacity credit in the USA: a practical application of satellite-derived solar resource data. IEEE J. Sel. Top. Appl. Earth Observations Remote Sens. 1, 28–33 (2008).

    Article  Google Scholar 

  53. 53.

    Denny E., Bryans G., Gerald J. F. & Malley M. O. (eds) A quantitative analysis of the net benefits of grid integrated wind. In 2006 IEEE Power Engineering Society General Meeting 8 (IEEE, 2006).

  54. 54.

    Maddaloni, J. D., Rowe, A. M. & van Kooten, G. C. Network constrained wind integration on Vancouver Island. Energy Policy 36, p591–p602 (2008).

    Article  Google Scholar 

  55. 55.

    Kling W. L., Gibescu M., Ummels B. C. & Hendriks R. L. (eds) Implementation of wind power in the Dutch power system. In 2008 IEEE Power and Energy Society General Meeting—Conversion and Delivery of Electrical Energy in the 21st Century 1–6 (IEEE, 2008).

  56. 56.

    Lew, D. et al. The Western Wind and Solar Integration Study Phase 2 (National Renewable Energy Laboratory, 2013).

  57. 57.

    Fripp, M. Greenhouse gas emissions from operating reserves used to backup large-scale wind power. Environ. Sci. Technol. 45, 9405–9412 (2011).

    Article  Google Scholar 

  58. 58.

    ECOFYS. Siemens-PTI, Ecar. Facilitation of Renewables (EirGrid and SONI, 2010).

  59. 59.

    Bell, K. & Hawker, G. Security of Electricity Supply in a Low-carbon Britain: A review of the Energy Research Partnership’s Report “Managing Flexibility Whilst Decarbonising the GB Electricity System” (UK Energy Research Centre, 2016).

  60. 60.

    Ela, E. et al. Active Power Controls from Wind Power: Bridging the Gaps (National Renewable Energy Laboratory, 2014).

  61. 61.

    EirGrid, Soni Ensuring a Secure, Reliable and Efficient Power System in a Changing Environment (EirGrid, 2011).

  62. 62.

    EirGrid, Soni RoCoF Alternative & Complementary Solutions Project Phase 2 Study Report (A DS3 Programme Report) (EirGrid, 2016).

  63. 63.

    Green, R. & Vasilakos, N. Market behaviour with large amounts of intermittent generation. Energy Policy 38, 3211–3220 (2010).

    Article  Google Scholar 

  64. 64.

    Grubb, M. J. Value of variable sources on power systems. IEE Proc. C 138, 149–165 (1991); https://digital-library.theiet.org/content/journals/10.1049/ip-c.1991.0018.

  65. 65.

    Impact of Intermittency: How Wind Variability Could Change the Shape of the British and Irish Electricity Markets Summary Report (Pöyry, 2009).

  66. 66.

    The Challenges of Intermittency in North West European Power Markets: The Impacts When Wind and Solar Deployment Reach their Target Levels (Pöyry, 2011).

  67. 67.

    Borenstein, S. The Market Value and Cost of Solar Photovoltaic Electricity Production (Center for the Study of Energy Markets, 2008).

  68. 68.

    Joskow, P. L. Comparing the costs of intermittent and dispatchable electricity generating technologies. Am. Economic Rev. 101, 238–241 (2011).

    Article  Google Scholar 

  69. 69.

    Klinge Jacobsen, H. & Zvingilaite, E. Reducing the market impact of large shares of intermittent energy in Denmark. Energy Policy 38, 3403–3413 (2010).

    Article  Google Scholar 

  70. 70.

    Sorrell S. Improving the evidence base for energy policy: the role of systematic reviews. Energy Policy 35, 1858–1871 (2007).

  71. 71.

    Technology and Policy Assessment London (UK Energy Research Centre; 2019); http://www.ukerc.ac.uk/programmes/technology-and-policy-assessment.html

  72. 72.

    Statistical Interactive Database—Interest & Exchange Rates Data (Bank of England; accessed October 2018); http://www.bankofengland.co.uk/boeapps/iadb/index.asp?first=yes&SectionRequired=I&HideNums=-1&ExtraInfo=true

  73. 73.

    Eurostat Harmonised Index of Consumer Prices (HICP) Database (European Commission, 2018).

  74. 74.

    Greenblatt, J. B., Succar, S., Denkenberger, D. C., Williams, R. H. & Socolow, R. H. Baseload wind energy: modeling the competition between gas turbines and compressed air energy storage for supplemental generation. Energy Policy 35, 1474–1492 (2007).

    Article  Google Scholar 

  75. 75.

    Strbac, G., Shakoor, A., Black, M., Pudjianto, D. & Bopp, T. Impact of wind generation on the operation and development of the UK electricity systems. Electr. Power Syst. Res. 77, 1214–1227 (2007).

    Article  Google Scholar 

  76. 76.

    Brouwer, A. S., van den Broek, M., Seebregts, A. & Faaij, A. Impacts of large-scale intermittent renewable energy sources on electricity systems, and how these can be modeled. Renew. Sustain. Energy Rev. 33, 443–466 (2014).

    Article  Google Scholar 

  77. 77.

    Holttinen, H. et al. Impacts of large amounts of wind power on design and operation of power systems, results of IEA collaboration. Wind Energy 14, 179–92. (2011).

    Article  Google Scholar 

  78. 78.

    Helander, A., Holttinen, H. & Paatero, J. Impact of wind power on the power system imbalances in Finland. IET Renew. Power Gener. 4, 75–84 (2010).

    Article  Google Scholar 

  79. 79.

    Denholm, P., Wan, Y.-H., Hummon, M. & Mehos, M. An Analysis of Concentrating Solar Power with Thermal Energy Storage in a California 33% Renewable Scenario (National Renewable Energy Laboratory, 2013).

  80. 80.

    Strbac, G. et al. Value of Flexibility in a Decarbonised Grid and System Externalities of Low-Carbon Generation Technologies Report for the Committee on Climate Change (Imperial College London, 2015).

  81. 81.

    Merz, SinclairKnight Growth Scenarios for UK Renewables Generation and Implications for Future Developments and Operation of Electricity Networks (Department for Business, Enterprise and Regulatory Reform, 2008).

  82. 82.

    Holttinen, H. et al. Design and Operation of Power Systems with Large Amounts of Wind Power Final Summary Report, IEA WIND Task 25, Phase Two 2009–2011 (VTT Technical Research Centre, 2013).

  83. 83.

    Soder L. & Amelin M. (eds) A review of different methodologies used for calculation of wind power capacity credit. In 2008 IEEE Power and Energy Society General Meeting—Conversion and Delivery of Electrical Energy in the 21st Century 1–5 (IEEE, 2008).

  84. 84.

    Pape, C. The impact of intraday markets on the market value of flexibility—decomposing effects on profile and the imbalance costs. Energy Econ. 76, 186–201 (2018).

    Article  Google Scholar 

  85. 85.

    Huuki, H., Karhinen, S., Kopsakangas-Savolainen, M. & Svento, R. Flexible demand and supply as enablers of variable energy integration. J. Clean. Prod. 258, 120574 (2020).

    Article  Google Scholar 

  86. 86.

    Scholz, Y., Gils, H. C. & Pietzcker, R. C. Application of a high-detail energy system model to derive power sector characteristics at high wind and solar shares. Energy Econ. 64, 568–582 (2017).

    Article  Google Scholar 

  87. 87.

    Doherty, R., Outhred, H. & Malley, M. O. Establishing the role that wind generation may have in future generation portfolios. IEEE Trans. Power Syst. 21, 1415–1422 (2006).

    Article  Google Scholar 

  88. 88.

    Luickx, P., Vandamme, W., Perez, P. S., Driesen, J. & Haeseleer, W. D. (eds) Applying Markov chains for the determination of the capacity credit of wind power. In 6th International Conference on the European Energy Market 1–6 (IEEE, 2009).

  89. 89.

    Tuohy, A. & O’Malley, M. Pumped storage in systems with very high wind penetration. Energy Policy 39, 1965–1974 (2011).

    Article  Google Scholar 

Download references

Author information

Affiliations

Authors

Contributions

Both authors contributed extensively to the work presented in this paper, including conception of the study, data identification and analysis, and drafting of the manuscript.

Corresponding author

Correspondence to Philip J. Heptonstall.

Ethics declarations

Competing interests

The authors declare no competing interests.

Additional information

Publisher’s note Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Supplementary information

Supplementary Information

Supplementary Table 1, Notes 1–4 and Figs. 1–3.

Supplementary Data

Systematic review data sources and dataset.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Heptonstall, P.J., Gross, R.J.K. A systematic review of the costs and impacts of integrating variable renewables into power grids. Nat Energy 6, 72–83 (2021). https://doi.org/10.1038/s41560-020-00695-4

Download citation

Search

Quick links

Nature Briefing

Sign up for the Nature Briefing newsletter — what matters in science, free to your inbox daily.

Get the most important science stories of the day, free in your inbox. Sign up for Nature Briefing