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New Report: Next Generation Wind and Solar Power – From Cost to Value

CEM’s Solar and Wind Working Group and International Energy Agency analyze system and market integration of renewables, energy policy

Wednesday, February 08, 2017

New Report: Next Generation Wind and Solar Power – From Cost to Value

A new IEA/CEM report suggests that the next generation of renewables deployment requires new integration measures and energy policies. Photo: the UK’s Westmill Solar Park. Credit: Flickr/RTPeat.

The report Next Generation Wind and Solar Power – From Cost to Value has been released as a collaborative product of the Clean Energy Ministerial’s Solar and Wind Working Group and the International Energy Agency (IEA). The report explores the dramatic expansion of variable renewable energy (VRE), the challenges this presents to power system operators and regulators, and possible solutions, including policies to maximize the system value of electricity from wind and solar power. The report includes detailed case studies of countries in varying stages of VRE uptake, including Brazil, China, Denmark, Indonesia, Mexico, and South Africa, and the diversity of contexts for system integration.

Noting the dramatic cost reductions for VRE—between 2008 and 2015, the average cost of land-based wind decreased by 35% and solar photovoltaics (PV) by almost 80%—the report presents the emergence of a “next generation” phase of deployment in which wind and solar PV are technologically mature and economically affordable.

In this next phase, issues of system and market integration become priorities for VRE policy—and energy policy more broadly. Two key factors for integration are the share of generation from VRE and the overall flexibility of the power system. A next phase of policies will need to look beyond generation costs to the overall system value of electricity from wind and solar power. System value is determined by a variety of factors, including reduced fuel costs, reduced carbon dioxide and other pollutant emissions costs, reduced need for other generation capacity, and higher costs of additional grid infrastructure.

Next Generation Wind and Solar Power – From Cost to Value presents practical examples of how to design policies for next-generation approaches, including country-specific case studies that show how emerging countries can achieve integration. These possible solutions include not only policies that encourage projects with greater system value but also long-term strategic planning, upgrades to power systems, more advanced variable renewable technology, and additional distributed resources.

Stakeholder workshops are planned in China, Indonesia, and Mexico to further disseminate the report’s findings.