2019INNOVATION LANDSCAPE FOR A RENEWABLE POWERED-FUTURESOLUTION TO INTEGRATE VARIABLE RENEWABLESINNOVATION LANDSCAPE FOR A RENEWABLE-POWERED FUTURE SOLUTIONS TO INTEGRATE VARIABLE RENEWABLESIRENA HEADQUARTERSP.O. Box 236, Abu DhabiUnitenullAnullab Enullinullatenullwww.irennull.nullrnull IRENA 2019INNOVATION LANDSCAPE FOR A RENEWABLE-POWERED FUTURESOLUTIONS TO INTEGRATE VARIABLE RENEWABLES IRENA 2019 Unless otherwise stated, material in this publication may be freely used, shared, copied, reproduced, printed and/or stored, provided that appropriate acknowledgement is given of IRENA as the source and copyright holder. Material in this publication that is attributed to third parties may be subject to separate terms of use and restrictions, and appropriate permissions from these third parties may need to be secured before any use of such material.ISBN 978-92-9260-111-9 Citation IRENA 2019, Innovation landscape for a renewable-powered future Solutions to integrate variable renewables. International Renewable Energy Agency, Abu Dhabi.ACKNOWLEDGEMENTS This report benefited from and review of experts Konstantin Staschus Ecofys – A Navigant Company; Deger Saygin SHURA Energy Transition Centre; Mark Van Stiphout, Ruud Kempener European Commission; Luiz Augusto Barroso, Gabriel Rocha PSR; Tomas Baeza CORFO; Maher Chebbo, Vlad Duboviks GE Power; Stephen Woodhouse Poyry; Wolfram Sparber EURAC; Mackay Miller National Grid; Jan Vorrink Tennet; Ioannis Theologitis, Norela Constantinescu ENTSO-E; Koen Noyens, Helene Lavray Eurelectric; Guy Vekemans Vito; Tiago Moura Antunes EDP; Nilmini Silva-Send EPIC; David Butler Hydro Tasmania; Mika Ohbayashi Renewable Energy Institute; James Watson, Thomas Dring Solar Power Europe; Lei Xianzhang, Wang Caixia, Wand Feng SGCC; Jia Hongjie, Wang Chengshan Tianjin University; Zhou Yue Cardiff University; Gerard Wynn, Tim Buckley IEEFA; Marko Vainikka, Saara Kujala Wrtsil; Peter Stratmann, Yvonne Finger Federal Network Agency for Electricity; Varun Sivaram Council on Foreign Relations; Doug Arent NREL; Paolo Mastropietro IIT, Comillas Pontifical University; Josh Roberts REScoop; Franois Moisan, Olivier Chazal ADEME; Anna Darmani Innoenergy; Ilja Rudyk EPO; Karoliina Auvinen Aalto University; Florence Coullet Clarion Energy; Arthur Petersen, Iman Jamall UCL; Ahmed Abdel-Latif, Hameed Safiullah, Emanuele Bianco, Paul Komor, Emanuele Taibi, Carlos Fernandez, Raul Miranda, Harold Anuta, Elena Ocenic, Bowen Hong IRENA.The report was authored by Arina Anisie, Francisco Boshell, Roland Roesch, Paul Durrant, Sean Ratka, Alessandra Salgado, Javier Sesma IRENA. The study was supervised by Dolf Gielen.Report available online www.irena.org/publicationsFor questions or to provide feedback publicationsirena.orgDISCLAIMERThis publication and the material herein are provided “as is”. All reasonable precautions have been taken by IRENA to verify the reliability of the material in this publication. However, neither IRENA nor any of its officials, agents, data or other third-party content providers provides a warranty of any kind, either expressed or implied, and they accept no responsibility or liability for any consequence of use of the publication or material herein. The ination contained herein does not necessarily represent the views of the Members of IRENA. The mention of specific companies or certain projects or products does not imply that they are endorsed or recommended by IRENA in preference to others of a similar nature that are not mentioned. The designations employed and the presentation of material herein do not imply the expression of any opinion on the part of IRENA concerning the legal status of any region, country, territory, city or area or of its authorities, or concerning the delimitation of frontiers or boundaries.Photographs are from Shutterstock unless otherwise indicated.CUTIVE SUMMARY3INNOVATION LANDSCAPE FOR A RENEWABLE-POWERED FUTURE4Innovation is the engine that powers the ongoing transation of the global energy system. A multitude of innovative solutions have been key to making renewables into the competitive energy option that they are today. The pace of renewable energy innovation, meanwhile, keeps accelerating, with power generation solutions at the forefront. Rapid cost reductions for solar and wind power have put these technologies at the core of the energy transation. To maximise their share while maintaining low electricity costs, more flexible power systems are needed. Innovation programmes in leading markets, therefore, are focusing on solutions to achieve maximum power system flexibility. The increasing electrification of transport, buildings and industry can also facilitate solar and wind uptake if smart approaches are adopted. As many of these new loads will be flexible, their inclusion in the power system can also help to integrate more renewables through demand-side management strategies. Many of the solutions to address such challenges are ready for commercialisation. With pioneering companies creating, trialling and deploying a swathe of potentially transative innovations, the key trends of digitalisation, decentralisation and electrification are moving ahead faster than anyone expected. Yet timely, focused government action remains essential to support innovation and integrate emerging solutions. In each context, decision makers need to identify the optimal combination of solutions. Determining a suitable, tailored innovation mix for each country requires a systemic approach – combining innovations in technology with those in market design, business models and systems operation. But the sheer diversity of solutions available, coupled with the diversity of power systems around the world, can pose significant challenges in decision-making. FOREWORD5FOREWORDAdnan Z. AminDirector-GeneralInternational Renewable Energy AgencyThe present Innovation Landscape study, prepared by the International Renewable Energy Agency IRENA, aims to provide a clear and comprehensive guide to such solutions. It seeks to support ined decision-making, assist in the creation of enabling policy frameworks, help nurture targeted innovation and, ultimately, facilitate the accelerated transition to renewables. The present report maps and categorises examples of the innovations being developed and implemented globally to facilitate the large-scale integration of variable renewable power. This main report will be augmented by innovation briefs and online resources which will permit closer examination of each innovation type. The study highlights the broad range of innovations available that could not just accelerate renewable energy deployment to meet demand, but could also help to ensure that the energy transation is global and inclusive. IRENA will continue to work with its Members on fostering renewable energy innovation and deployment, in line with their national economic, social and environmental goals as well as with global climate and sustainable development objectives. INNOVATION LANDSCAPE FOR A RENEWABLE-POWERED FUTURE6cutive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 Innovations to facilitate variable renewable integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10Solutions for a renewable-powered future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .161 Power sector transation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .181 .1 Towards a low-carbon, reliable, affordable and secure energy system . . . . . . . . . . . . . . . . . . . . . . . . . 191 .2 Increasing system flexibility for the integration of VRE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211 .3 Showcasing innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .231 .4 Innovation trends and changing roles in future power systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29 Digitalisation of the power sector 31 Decentralisation of power systems .34 Electrification of end-use sectors 362 The landscape of innovations for variable renewable power integration . . . . . .382 .1 Enabling technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Electricity storage .42 Electrification of end-use sectors 43 Digital technologies 45 New grids 46 Dispatchable generation 472 .2 Business models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48 Empowering the consumer .49 Enabling renewable energy supply 502 .3 Market design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Innovative wholesale market design .52 Innovative retail market design 542 .4 System operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 Operation of distributed energy resources 56 Accommodating uncertainty 57 Grid reinforcement deferral .58CONTENTS7TABLE OF CONTENTS3 Innovations creating solutions for a renewable-powered future . . . . . . . . . . . . .603 .1 Supply-side flexibility solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66Solution I Decreasing VRE generation uncertainty with advanced weather forecasting 67Solution II Flexible generation to accommodate variability .713 .2 Grid flexibility solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78Solution III Interconnections and regional markets as flexibility providers 79Solution IV Matching renewable power generation and demand over large distances with supergrids .84Solution V Large-scale storage and new grid operation to defer grid reinforcements investments 873 .3 Demand-side flexibility solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .92Solution VI Distributed energy resources providing services to the grid 93Solution VII Demand-side management .99Solution VIII Renewable energy mini-grids providing services to the main grid 104Solution IX Optimising distribution system operation with distributed energy resources 1083 .4 System-wide flexibility solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .113Solution X Utility-scale battery solutions .114Solution XI Power-to-X solutions .1204 Impact assessment of solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1284 .1 Key solutions Implementation challenges versus flexibility potential . . . . . . . . . . . . . . . . . . . . . . . . . 1324 .2 Indicators on the suitability of solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1425 Summing up Eight-step innovation plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .148References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .154ES8Innovation is the engine powering the global energy transation. Around the world the pace of developing and introducing better, more efficient renewable energy technologies is accelerating. Renewables are becoming the go-to option for many countries in their transition towards a secure, cost-effective and environmentally sustainable energy supply. Renewables underpin continued socio-economic development with jobs and local value creation, while simultaneously combating climate change and local air pollution. The power sector has led the way, with rapid reductions in the cost of solar and wind technologies resulting in widespread adoption in many countries. Despite the promising progress to date, however, the pace of the energy transition needs to pick up significantly. As with market policies, the policies put in place to drive technological innovation should be continually revisited and updated to keep up with new developments and breakthroughs IRENA, IEA and REN21, 2018.The integration of variable renewable energy VRE poses specific challenges as its share of power generation rises – in essence, maintaining the balance of supply and demand becomes more of a challenge. More flexible and integrated power systems are needed to maximise the value of low-cost VRE, meaning solar and wind.In response, policy makers and system operators around the world are adopting a range of measures to maintain an affordable and reliable balance of supply and demand in this evolving landscape. Innovation is focused on fostering the development and deployment of solutions that increase the system flexibility needed to integrate high shares of solar and wind power. CUTIVE SUMMARYFlexibility The capability of a power system to cope with the variability and uncertainty that solar and wind energy introduce at different time scales, from the very short to the long term, avoiding curtailment of power from these variable renewable energy VRE sources and reliably supplying all customer energy demand IRENA, 2018c.Variability The fluctuating nature of solar and wind resources, which translates into potentially rapid changes in electricity outputUncertainty The inability to predict perfectly the future output of solar and wind power sources9In recent years far-sighted governments and pioneering companies around the world have been creating, trialling and deploying a multitude of innovative solutions that have the potential to radically trans energy systems across the world. The sheer diversity of solutions, coupled with differences between local energy systems, may make for a confusing picture for decision makers, who may struggle to identify and assess the best solutions for each country or context.The International Renewable Energy Agency IRENA has conducted an extensive and detailed analysis of the innovation landscape for the integration of variable renewable power, mapping and categorising t