Meeting the Challenges of Integrating Renewable Energy into Competitive Electricity Industries
A report arising from the IEA workshop held on 20 November 2006 on scoping priority tasks
1. Introduction: the renewable energy integration challenge
Growing concerns about climate change and energy security have heightened interest in harnessing renewable energy resources as a response to these critical issues Ackerman 2006; Bauer and
Mastrandrea, 2006; Energy Watch Group 2006 2007; Galvin Electricity Initiative, 2006; Hansen, 2005; IPCC, 2007; Stern, 2006. The most important renewable energy resources are bioenergy,
hydro, geothermal, wind, solar and in the future ocean energy systems IEA, 2006. Electricity generated using these resources will, in the most part, be delivered to the point of end-use via large
scale transmission and distribution systems. Consequently, the successful integration of renewable energy generation into large power systems has become fundamental to successfully addressing
climate change and energy security concerns.
However, modern electricity industries now face a range of challenges. For example, a recent scenario analysis by the Galvin Electricity Initiative of US electric energy services in 2025 reached
the following general conclusions:
“We concluded that three very robust drivers for the evolution of electric energy services cross-cut all of these scenarios. The first is an intensified focus on energy efficiency and
domestic energy resources in the face of global competition for oil and natural gas. The second cross-cutting driver is increasing requirements for power quality and reliability. The
third universal driver is the additional pressure on electricity prices and generation sources that will result from an increasing consensus regarding the impact of electricity production
from fossil fuels on the environment.” Galvin Electricity Initiative, 2006
Thus we need to consider the integration of renewable energy within the broader set of challenges facing modern electricity industries, where price and technical performance are critical issues as
well as energy security, environmental sustainability and enhanced end-use efficiency e.g. Doherty et al, 2006; Kushler et al, 2006. Therefore, this document first considers this broader context before
addressing the question of renewable energy integration. It begins with a review of how the electricity industry operates and the ongoing process of electricity industry restructuring.
2. The electricity industry its associated decision-making processes
