IEA says wind and solar can carry bulk of energy transformation
By Jonathan Gifford on 27 February 2014

The International Energy Agency (IEA) has released a report in which it concludes that the integration of large amounts of renewable energy can be achieved by any country at only a small increase on whole system costs, compared with the current fossil-fuel heavy electricity systems. Making the conclusion even more startling is that the IEA used present-day costs for solar PV and wind, with the two most widely-deployed renewable energy technologies set to provide the bulk of the generating capacity in these transformed electricity systems.

While renewable energy is often blamed for driving electricity prices up and having a costly destabilising affect on electricity grids, the IEA says that integration of renewables into electricity grids and markets can be done so at little cost. For the first 5-10 percent of what it calls variable renewable energy (VRE, essentially wind and solar), the IEA says this poses no technical or economic challenges at all. Even for higher levels of up to 45 per cent penetration, it says would cost only 10% to 15% more than the status quo.

These conclusions are particularly relevant in Australia, where there is a big push for Australia to even obtain up to 10 per cent wind and solar under the current renewable energy target (the remaining 20 per cent is hydro and biomass). South Australia, it should be noted, has reached 31 per cent wind and solar with little or any additional cost. In fact, wholesale prices have fallen the most in that state than any other.

The IEA says the key to incorporating high levels of wind and solar is for countries to employ renewable energy in a way that supports the grid, investing in additional flexible generating capacity and improving the operation of electricity markets.....