Renewable Energy and Transmission Networks - Green Energy and Efficiency: An Economic Perspective - page 367

1 Main Features of Renewable-Based Generation Affecting
the Transmission Activity

Generation based on Renewable Energy Sources (RES generation) must be inte-
grated massively in our power systems in order to achieve energy and environ-
mental policy objectives currently being set all over the world, [ 13 ]. But distinct
features of RES generation, namely the intermittency of its power output, its cost
structure, and the uneven geographical distribution of RES generation primary
resources, are expected to have a signi cant effect on the economic and technical

conditions applying in those power systems that exhibit large RES generation
penetration levels.
Power production from RES generation is, for most of these technologies, to a
large extent unpredictable

and largely variable.
This results from the fact that the output of these units largely matches the amount
of renewable primary energy available at each time, wind and solar, typically. The
latter may exhibit large, unexpected variations over relatively short periods of time.
In order to keep the balance of power in the system, the operation of the rest of
generation and the demand, and to some extent even that of transmission and
distribution, needs to adapt to the availability of the RES resource.
Apart from this, the structure of costs of RES generation also differs from the
thermal one, which traditionally has largely determined power prices in most
systems. Thus, conventional generation is characterized by lower ratios of invest-
ment costs to variable production ones than RES-based generation. As a conse-
quence of this, when large RES generation penetration levels are achieved, market
prices re

— except in the very short term —

cantly decrease with respect to
current levels over long periods of time (when the amount of RES-based generation
that is available to produce is signi

ecting short-term marginal costs will signi

cant), while prices at times when most of RES
generation is not available will be very high, i.e. large price spikes will occur. This
may ask for a reconsideration of present market pricing rules and transmission
regulation. Regarding transmission, mechanisms to provide long-term access to the
use of the grid will probably be needed to facilitate the installation of far away RES
generation.
Lastly, contrary to what happens with fossil fuels burned by conventional
generation capacity, a large fraction of primary renewable energy resources, like
wind, solar radiation, or even water in the amounts needed for power production,
cannot be transported to other places in the system than those where they are
naturally present. Then, cost effective power production from RES in large amounts
must take place where the resources are located. This implies that the geographical
distribution of RES generation will not match largely that of demand, resulting in
large power cient use of RES primary

resources within a large region will require the transportation over long distances of
large amounts of energy and will lead to less predictability and more stress in the
use of the transmission network to cope with the intermittency and variability of
such generation resources. This may require, as explained later, to resort to the use

ows covering large distances. Making ef