The costs of wind and solar power have fallen faster than expected, and their capacity is now growing at a considerably faster rate

The European energy system is currently changing at a rapid pace, and the growth of wind and solar power will create increasing demand for flexibility. The integration of energy sectors can provide cost-effective ways to increase the flexibility of the energy system, but it will require a great deal of cooperation and information before it can be implemented.

Despite the currently ongoing energy crisis, there has been good news on the progress of the energy transition: the costs of wind and solar power have fallen faster than expected, and their capacity is now growing at a considerably faster rate than what even their biggest proponents dared to forecast only 5–10 years ago. For example:

• In 2021, the costs of energy produced by solar panels decreased by 13% and onshore wind power by 15%.
• During the first nine months of last year, solar panel imports from China to Europe exceeded 60 GW when the forecast for the entire year was 40 GW. At this rate, Europe’s solar capacity could double in around two years – from 160 GW to over 300 GW – between 2021 and 2023. 
  
• In the next three years, 4 GW of new wind power will be constructed in Finland, generating approximately Olkiluoto 3’s worth of electricity per year. And there are multiple times more construction projects in the pipeline. ⁽³⁾

As an energy system researcher, it’s great to see that we are finally moving on from the issue of increasing renewable generation to solving the challenges related to its integration. Variable generation requires a new approach to controlling the energy system in order to guarantee both the stability of the power grid and the balance of generation and demand at every moment and in all circumstances. 

In this blog post, I will attempt to explain how the balancing of generation and demand will create challenges in the future and how they can be solved through cooperation between systems and end-users. Indeed, “sector integration”, the somewhat clunky term for this cooperative approach, refers to different energy sectors supporting or providing flexibility to each other.

Sector integration aims to benefit the entire energy system instead of an individual sector

The figure below illustrates the components of the energy system and the sources of flexibility in the renewable energy system. In simple terms, the flexibility in our current system is based on generation, and neither the system nor the consumers have had to be reactive in any way. However, in the future, all three must be able to flexibly support one another. 

Source: Nelli Putkonen (www.vttresearch.com/en/news-and-ideas/how-future-energy-system-will-benefit-sector-integration)