Power System Transformation for Dummies
Power system transformation
understanding the challenges
vRES output is fluctuating.
What is the point?
vRES generation is determined by the actual wind or solar resources. Generation cannot be matched arbitrarily with the actual demand.
In the past, the system was dominated by dispatchable power plants, based on nuclear, fossil fuels or hydro capacities.

Why is this important?
In electrical power systems, generation and load have to be balanced at any moment in time, ranging from seconds to seasons. Flexibility of loads has limitations and, hence, generation has to provide sufficient load following capability.
vRES cover part of the load but do not follow. Hence, the volatility of the residual load increases with growing vRES shares. The balance has to be maintained by dispatchable generation - which, in turn, is used less with growing vRES shares. The higher vRES penetration, the more 'load following' has to be transformed gradually to 'generation-load matching'.

In addition to the capability to match load and generation, also short term system balancing and provision of reserves for contingencies are important. Provision of these ancillary services commonly is delegated to dispatchable generation. In other words: dispatchable generation for ancillary services is scheduled independently from the economic dispatch focusing on energy only.

Summarising: increasing vRES shares reduce the utilisation of dispatchable plants but do not equally reduce the need for dispatchable capacity. Flexibility requirements even increase.
If this tension is not tackled, vRES operation will run into restrictions, possibly already in an early stage of development.

Where is this relevant? - Country characteristics
The smaller the geographical extension of a power system, the steeper fluctuations are at system scale. Over large areas, local fluctuations of the solar and wind resource mutually smooth out. Even an approaching storm front does not hit the complete interconnected continental European synchronous system at once.

Obviously, this advantage also depends on infrastructure: strong interconnections allow to extend the system spatially. Interconnections may link large countries internally (e.g. USA) or link several political entities (e.g. ENTSO-E - continental Europe or SIEPAC in Central America). Technically this does not make a difference.
Note: in case of solar PV, the smoothing effect of long distance East-West interconnections is more significant than that of North-South connections, due to the daily travel of the sun.

Climate influences fluctuations of the wind and solar resources (this applies to hydro as well). Also load patterns are influenced by climate. In European countries load is high in winter and in the early evening.
The correlation of both, load and vRES generation, determines the nature of the residual load and, hence, the challenge associated with fluctuation.
The solar resource, by nature, shows a prominent daily cycle. Seasonal cycles may be small close to the equator. Their intensity grows with latitude.

If resources for dispatchable renewables (dRES) are favourable, they relax the need for vRES and, hence, the related challenges. dRES technologies can satisfy the needs for dispatchable generation and ancillary services.
Note: often, the dispatch of dRES is subject to restrictions as well.

From a technology point of view, countries with a strong base of less flexible dispatchable generation (e.g. steam cycles driven by nuclear, lignite and coal) have more of a challenge integrating vRES than countries much relying on, for example, gas turbines.

When is this relevant? - Stage of development
During the uptake period (transformation phase 1), renewables are just another, new factor. Neither the behaviour of the (residual) load nor the capabilities of the existing generation mix change substantially. Minor technical changes may be sufficient to maintain the system balance.
With larger vRES capacities (starting from transformation phase 2), gradients and swing of the residual load become steeper. Simultaneously, the capabilities of the dispatchable plants might shrink due to their decreasing commitment. From transformation phase 3 provision of ancillary services becomes a critical challenge. More structural adjustments of technical concepts and regulation of the whole system are inevitable.

How to approach? - Addressing the challenges
During and certainly after transformation phase 2, system planning needs to be adjusted. In order to maintain generation adequacy, the right policy framework has to provide investment security for extension and replacement of dispatchable generation, simultaneously incentivising flexible and low- to no-carbon generation technologies.
Until transformation phase 2, many of the operational issues can be addressed adequately by technical measures.
- Be prepared: forecasts are needed. Respective tools have to be implemented and integrated in systems operation.
- Be ready to respond: The type and amount of ancillary services required may change. Allocation (and remuneration) of balancing ancillary services may need to be organised differently than in the past.
Automatic generation control (AGC), coordinating the individual contributions from dispatchable plants, keeps system operations manageable.
When vRES capacity gets close to minimum load, sometimes dispatchable plants are scheduled solely for providing ancillary services (kind of 'must run capacity'). In those hours, vRES generation may be restricted. Otherwise there is a risk that generation exceeds demand and the system balance is going to be disturbed. Then, at latest, it is essential to enhance flexibility of dispatchable generation. Also loads' flexibility has to be used as far as possible.

vRES forecasts are never perfect.
Remote vRES plants may be located remotely.
Distributed vRES plants are dispersed.
vRES generate using power electronics.
small vRES plants run without professional operator.
vRES generate at zero marginal costs.