Long-term “system conduciveness” of renewables more important than low costs – study
Expanding the capacity of renewable energy sources in Germany should be focussed on long-term stabilisation effects on the energy system rather than cutting costs by maximising output, a study by the German Institute for Economic Research (DIW) suggests. Researchers say basing the expansion of renewable sources like solar panels or wind turbines on a so-called “market value model” that anticipates how well installations can be integrated into a future energy system will optimise costs and desired energy transition effects in the long-run. “It’s becoming more and more important to produce power when it’s needed,” says Jörn Richstein, one of the study’s authors. This, for instance, would mean that solar panels need to be constructed facing east or west to catch sunlight at times when most other panels, which face south to maximise output, produce less, the DIW says. However, operators did not know whether future power wholesale prices will increase revenues, cutting incentives to build installations that are conducive to the entire energy system. The authors say, therefore, that renewables auctions ought to include a “market value factor” for individual bids to adjust a project’s chances of success by accounting for its system support.