Grid bottlenecks could derail Europe’s renewable energy boom | Popgen Tech
Europe’s energy transition ambitions face several challenges, but a major impediment to bringing new renewable power online is insufficient grid capacity. Rystad Energy’s current baseline forecast has Europe adding as much as 530 gigawatts (GW) of solar PV and onshore and offshore wind between 2022 and 2030, more than 66 GW per year on average. Furthermore, the share of solar and wind combined as a share of total installed capacity passed 10% in 2010 and more than tripled to 34% in 2021, according to Rystad Energy research.
Growth is not expected to slow anytime soon as European countries plan large additions of renewable energy over the next few years. If Europe is to remain a leader in the energy transition, a large amount of network capacity will need to be developed, both to integrate new generation capacity into the respective countries’ power mixes and to better connect European countries so that electricity can flow the most. optimal way.
The staggering amount of new solar and wind capacity expected to come online in Europe in the coming years means that grid interconnectivity will be the bottleneck for both the more efficient use of energy resources as well as the overall slower decarbonisation of the power sector if more fossil fuels are to be used to compensate. Historically, this has been much less of a problem as Europe’s power system has been dominated by four major sources – coal, gas, nuclear and hydro – all with varying degrees of dispatch, but none considered intermittent.
With the pace of renewable energy development significantly outstripping the speed of grid upgrades and expansion projects in parts of Europe, policymakers and the power sector will need to carefully examine whether a country’s development plans for new generation capacity are consistent with its development plans for both internal and cross- border transfer capacity. The timelines for new projects are very long and some countries in Europe are already limiting renewable power that can be used elsewhere – for example, Germany curtailed around 10.2 terawatt-hours (TWh) of wind power in 2017, the most of any European country to date. The annual average is around 5% of variable renewables curtailed, highlighting how bottlenecks are already a problem.
“Europe’s increasingly connected power grid is one of the first worldwide to absorb significant amounts of renewable and intermittent power. Shifting power around the continent to reduce the use of carbon-emitting fuels will only be possible if the grid is upgraded. It won’t be simple, quick or cheap, but it will reduce greenhouse gas emissions and increase energy security. The race is now on to see if grid upgrades can match the staggering levels of new renewable energy coming online in the next decade,” says Fabian Rønningen, senior analyst, power markets at Rystad Energy.
Europe’s network will need to connect northern winds and southern sunshine
The chart below shows how the existing capacity base and future capacity will be unevenly distributed between European countries, with the likes of the North Sea emerging as another European energy hub with hundreds of GW of capacity planned to come online in the coming decades come. For a future energy system, in which Europe’s energy resources are optimally utilized, both policy makers and industry will have to think differently about network development, compared to the status quo. Most of the new capacity coming online in Europe in the coming decades will be solar and wind, with such resources varying significantly across the continent. Southern parts of Europe have better solar conditions than the north, while wind resources are highest in the northern and eastern regions of the continent, as well as all coastal and offshore areas. This means that Europe’s future energy system could have a much higher degree of electricity flow between countries than we see today, despite Europe already being well interconnected.
Case study: Spain
Spain has emerged as one of the European leaders in both solar and wind development, and currently has one of the largest renewable pipelines in Europe. Spain has the most economic solar energy potential of the major European countries due to its considerable land mass and high annual solar radiation, while it has also been a pioneer in the European wind industry. Furthermore, due to its relatively poor connectivity with the rest of continental Europe, Spain provides an excellent example of how internal European grid bottlenecks can hinder Europe’s energy transition.
Although grid development within Spain is expected to grow rapidly over the coming decade, there are currently only three high-voltage interconnections planned for France, two of which are not expected to come online before 2027. This is just one example of potential bottlenecks facing Europe over the next decade as hundreds of GW of solar and wind power come online, while development of supporting grid infrastructure lags, particularly cross-border connections. Policymakers need to determine whether grid development plans are aligned with ambitious renewable energy targets to ensure that transmission capacity does not constrain the energy transition.
Installed capacity of renewable energy sources in Spain will more than double by 2030 in Rystad Energy’s current base forecast. While installed capacity of non-renewable energy sources will fall from 54 GW in 2022 to 34 GW by 2030, capacity of renewable energy sources will grow from 64 GW to 151 GW. Solar power will drive most of the growth in renewable energy, mainly driven by developments in central Spain. Expansion plans for transformer capacity are being drawn up to keep pace with these ambitious growth targets in installed capacity. Spain’s transmission system operator (TSO), Red Electrica, has outlined detailed plans for upgrades and expansions to its transmission network. By the end of this decade, these plans could grow transformer capacity by more than 220% compared to 2022 levels. Although these upgrades to the network are planned across Spain, it appears that most capacity will be added in southern and central Spain, particularly in communities such as Andalusia and Castilla y Leon (Figure 4). These are also the regions where most of the planned solar and wind capacity will come online in the next few years.
The last time a high-voltage interconnection between Spain and France was commissioned was in 2015. In the following years, the countries recognized the mutual benefits of further integrating their power grids through three other high-voltage direct current connections across their shared border to project. One of the projects is a 400-kilometer connection that will run between the Cubnezais substation (near Bordeaux, France) and the Gatika substation (near Bilbao, Spain), known as the Bay of Biscay project. The interconnector will be laid mainly undersea in the Atlantic Ocean with the rest buried underground, and will be the first undersea connection between Spain and France. The project has a total transmission capacity of 2 GW and will increase the total interconnection capacity between the two countries to 5 GW. The project is currently expected to be completed by 2027. In addition, the countries are investing in strengthening existing interconnections.
Regarding the use of France-Spain interconnections, power mainly flowed into Spain. Spain has been a significant net importer of French electricity every year since 2016, with 12.4 TWh of net annual imports peaking in 2017. This year will show a significant change with Spain a net exporter to France every month in 2022 , except for February, amid a major shortage of French nuclear power generation. From 2016 to 2022, Spain was a major net importer of cheap French nuclear power, while in 2022 Spain had the flexibility to increase mainly gas-fired power generation to support French consumers amid the energy crisis. It further highlights the benefits of increased interconnectivity for both countries. Furthermore, Spain is currently one of the largest generators of renewable power in Europe and has an impressive pipeline of renewable energy projects, while a significant share of electricity exported to France so far in 2022 has been solar and wind.
Unlike Spain, France has not planned to increase the share of renewable energy sources in its power mix to the same extent. The situation with nuclear power in France is expected to improve in 2023, which will also benefit Spain. With more interconnections between France and Spain, the two can rely on each other during periods when their power production is low. Given the abundant renewable energy power that will be produced in Spain, France will then be able to import clean, renewable energy when the sun shines and the wind blows. On the other hand, Spain will be able to import stable and dispatchable energy from France’s nuclear reactors to fill the intermittent gaps when the weather is less favorable. In other words, the expansion of high-voltage connections between the two power grids will benefit both countries and the wider European region.
This raises the question: is enough interconnection capacity being developed in Spain and France compared to the rate of renewable installations? The timelines of the interconnection projects are very long, as shown by the Bay of Biscay project, which is expected to take 10 years from the start of initial consultations in 2017 until it is expected to go online in 2027. To illustrate, 5 GW of transmission capacity would be able to exchange around 40 TWh per year if used at very high utilization factors – a significant amount, but relatively small compared to the total power demand in both countries. Both countries’ power demand is also expected to increase rapidly after 2025, as the electrification of their economies continues. Furthermore, the Spain-France example is just one of many. Many of the same questions will arise in other parts of Europe, especially as the North Sea is emerging as another European energy hub with hundreds of gigawatts of capacity planned to come online in the coming decades. Therefore, both policymakers and the power sector need to carefully examine whether a country’s development plans for new generation capacity are consistent with its development plans for both internal and cross-border transmission capacity. The timelines for new projects are very long and Europe simply cannot afford network bottlenecks to stop its energy transition plans.
By Rystad Energy
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