By Barbara Casassus of Nature magazine

Variable energy sources such as wind and solar power could provide 19-63% of required electricity in many countries if the technical and market hurdles are overcome, according to the International Energy Agency (IEA). This upbeat view contrasts with what most other experts have said to date.

The main difficulty in achieving figures like the IEA's are obstacles to integrating VRE sources into power systems. The most important hitches are congested grids and rigid markets.

An IEA report, Harnessing Variable Renewables: a Guide to the Balancing Challenge, released today, assesses eight major industrialized countries or economic zones. It concludes that variable renewable energy (VRE)--relying on an intermittent energy source such as wind and solar power--could provide 19% of Japan's electricity and 63% of Denmark's. The feasible contribution of VRE for Canada, Mexico, the Nordic region, Spain and Portugal, the United Kingdom and Ireland, and the United States ranges between these two figures.

"Those who assert that large shares of variable supply represent an insurmountable, additional challenge to power-system operation may be looking with too narrow a gaze," says the report.

Turn the tide

"Even the lower end of the scale is high," says Hugo Chandler, an analyst at the IEA's Renewable Energy Division, and lead author of the report. "Our numbers are surprisingly high because they take account only of technical capability, and show there is no one-size-fits-all answer to the potential share of VRE in the electricity mix."

"Much of the uncertainty about VRE potential stems from limited understanding of the balancing capacity of existing flexible resources, of which there are four--conventional power plants, demand, energy storage and trade," he says. The IEA sets out a four-point method assessing each of these resources.

Congested grids are arguably the greatest impediment to a wider use of VREs in many areas. "This is a relatively minor problem in the Nordic region, so these countries could get quite close to our figures," says Chandler. "But in Mexico, present grid bottlenecks would preclude high shares of VRE."

Closed market

Rigid markets are another hurdle. Even though coal, gas and some nuclear power plants can operate flexibly to accommodate variable contributions from renewable energy, the structure of energy markets often rules this out. For example, only 4% of the United Kingdom's electricity is traded on the open market, compared to 30% in the Netherlands and 70% in the Nordic market. The rest of supplies are covered by long-term contracts.

"A market model providing incentives for flexibility is one of the major research issues we need to tackle now," says Chandler. "In parts of the United States, a sort of retainer is paid for power plants to step up production when needed, but these alone are not enough to permit high VRE shares."

More work is also needed on the cost of strengthening grids and trade, on greater power plant and storage flexibility, and on growing electricity price volatility. "Flexible consumption by end users could also be extremely important, but we still don't know to what extent," says Chandler.

The use of VRE is growing rapidly in some countries. Wind is a substantial contributor in Denmark, where it supplied 24% of power in 2010, and Portugal and Spain, where it provided 14%. On 9 November last year, Spain briefly hit a peak of 46.7% of its electricity coming from wind power.

"Officials from other countries are often incredulous when I tell them such figures," says Chandler.

This article is reproduced with permission from the magazine Nature. The article was first published on May 24, 2011.