As the contributions of solar PV and wind power to electricity systems keep growing around the world, governments and industry must address the critical work of integrating these variable renewables into their electrical grids.
This work is essential to make sure that countries can benefit from higher shares of renewable power while ensuring grid stability and avoiding shortages. For this reason, the German Federal Ministry for Economic Affairs and Energy and the International Energy Agency convened a one-day ministerial conference in Berlin today to share best practices and innovative ideas to fully grasp the opportunities of wind and solar.
The Global Ministerial Conference on System Integration of Renewables was attended by high-ranking officials and industry CEOs, including Ministers, Deputy Ministers and State Secretaries from the countries of Sweden, Thailand, Japan, Morocco, Poland, Switzerland and the United States. It was co-chaired by Peter Altmaier, the German Federal Minister for Economic Affairs and Energy, and Dr Fatih Birol, the IEA’s Executive Director.
“Germany’s energy transition rests on three pillars: expansion of solar and wind energy, digitalisation in the energy sector and sector coupling. We want 65% of our electricity to be renewables-based by 2030,” said Mr. Altmaier. “The use of renewable energy is growing everywhere around the world. It will therefore become ever more important for us to engage in cross-border cooperation and share and discuss best practices with other countries.”
Dr Birol, the IEA’s Executive Director, said: “Wind and solar are critical pillars of the world’s efforts to tackle climate change, reduce air pollution and provide energy access to all. Their declining costs are a huge opportunity. But power systems need to become more flexible and market designs must be adapted in order to avoid unintended impacts on electricity security.”
The IEA has been working on system integration for almost 15 years and is expanding its efforts. In particular, it is preparing a major new study on electricity security to help countries to better manage the impact of energy transitions, guard against new cybersecurity threats and develop resilience to extreme natural events.
Renewable electricity is a key driver of clean energy transitions. After stalling last year, global capacity additions of renewable power are set to bounce back with double-digit growth in 2019, driven by solar PV’s strong performance, to reach almost 200 GW. But more will be needed to reach long-term climate and sustainable energy goals. Renewable capacity additions need to increase by more than 300 GW on average each year between 2018 and 2030 to reach the goals of the Paris Agreement, according to the IEA’s Sustainable Development Scenario. Wind and solar account for 80% of that growth.
Unlocking this potential will require governments to set out the right frameworks to handle these growing shares. That means long-term planning in which the design of grids and markets fully takes account of the shifting landscape.
Today, 25 countries have 10% variable renewable electricity in their mix. Several countries have committed to long-term targets for very high shares of renewables or even full reliance on these sources. By 2030, more than 50 countries will have reached wind and solar electricity levels of 10%. Germany is already moving towards more than 50% by that year, and the European Union aspires to reach 35%.
These ambitions mean current system integration ideas need scaling up from successful pilots to clear legislative programs that ensure effective uptake of renewable sources in line with global energy and climate ambitions. Today’s conference highlighted that these efforts need to fit into wider all-energy strategies that consider economic sectors affected by energy transitions, as put forward in Germany’s recent Climate Action Law proposal, for example.
The IEA continues to take a leading role in supporting global energy transitions through data, expert insights and clear policy advice, taking all technologies and sectors into account.
Following the success of today’s event, the IEA will convene a second Global Ministerial Conference on System Integration of Renewables in Paris in September 2020 at which the major report on electricity security will be launched. In the report, the IEA will develop fact-based insights and put forward key policy recommendations on how infrastructure, markets and institutions can adapt to the evolving challenges of electricity security in the 21st century.
Hydrogen in North-Western Europe: A vision towards 2030
North-West Europe has a well-developed hydrogen industry that could be at the edge of an unprecedented transformation should governments keep raising their ambitions for reducing greenhouse gas emissions, according to a new joint report by the International Energy Agency (IEA) and the Clingendael International Energy Programme (CIEP).
The report, Hydrogen in North-Western Europe: A vision towards 2030, explores hydrogen developments, policies and potential for collaboration in the region. It was commissioned to inform discussions among governments from North-West Europe about the potential development of a regional hydrogen market. This intergovernmental dialogue was established at the Clean Energy Ministerial Hydrogen Initiative in 2020.
The report finds that the current policy landscape provides some momentum for the transformation of the hydrogen industry in North-West Europe towards 2030, but that it is insufficient to fully tap into the region’s potential to develop a large-scale low-carbon hydrogen value chain. More ambitious policies in line with the targets defined by the EU Green Deal or the UK Climate Change Act would drive a faster transformation.
If such a supportive policy framework were to be adopted, hydrogen demand in the region could grow by a third and low-carbon hydrogen could meet more than half of dedicated production, up from about 10% today, according to the report.
North-West European countries have already made significant progress developing their vision for the role hydrogen should play in their long-term energy strategies. These countries now face the challenge of moving beyond national discussions to establish a regional dialogue, an indispensable condition to develop the fully integrated hydrogen market the region needs.
With the aim of informing this dialogue, the report identifies four priorities that should be addressed:
- Build on the large unused potential to co-operate on hydrogen in the north-western European region.
- Identify what is needed to develop an integrated regional market.
- Develop supporting schemes with a holistic view of the hydrogen value chain.
- Identify the best opportunities to simultaneously decarbonise current hydrogen production and deploy additional low-carbon supply.
Seven Countries Account for Two-Thirds of Global Gas Flaring
In an unprecedented year for the oil and gas industry, oil production declined by 8% in 2020, while global gas flaring reduced by 5%, according to satellite data compiled by the World Bank’s Global Gas Flaring Reduction Partnership (GGFR). Oil production dropped from 82 million barrels per day (b/d) in 2019 to 76 million b/d in 2020, as global gas flaring reduced from 150 billion cubic meters (bcm) in 2019 to 142 bcm in 2020. Nonetheless, the world still flared enough gas to power sub-Saharan Africa. The United States accounted for 70% of the global decline, with gas flaring falling by 32% from 2019 to 2020, due to an 8% drop in oil production, combined with new infrastructure to use gas that would otherwise be flared.
Gas flaring satellite data from 2020 reveals that Russia, Iraq, Iran, the United States, Algeria, Venezuela and Nigeria remain the top seven gas flaring countries for nine years running, since the first satellite was launched in 2012. These seven countries produce 40% of the world’s oil each year, but account for roughly two-thirds (65%) of global gas flaring. This trend is indicative of ongoing, though differing, challenges facing these countries. For example, the United States has thousands of individual flare sites, difficult to connect to a market, while a few high flaring oil fields in East Siberia in the Russian Federation are extremely remote, lacking the infrastructure to capture and transport the associated gas.
Gas flaring, the burning of natural gas associated with oil extraction, takes place due to a range of issues, from market and economic constraints, to a lack of appropriate regulation and political will. The practice results in a range of pollutants released into the atmosphere, including carbon dioxide, methane and black carbon (soot). The methane emissions from gas flaring contribute significantly to global warming in the short to medium term, because methane is over 80 times more powerful than carbon dioxide on a 20-year basis.
“In the wake of the COVID-19 pandemic, oil-dependent developing countries are feeling the pinch, with constrained revenues and budgets. But with gas flaring still releasing over 400 million tons of carbon dioxide equivalent emissions each year, now is the time for action. We must forge ahead with plans to dramatically reduce the direct emissions of the oil and gas sector, including from gas flaring,” said Demetrios Papathanasiou, Global Director for the Energy and Extractives Global Practice at the World Bank.
The World Bank’s GGFR is a trust fund and partnership of governments, oil companies, and multilateral organizations working to end routine gas flaring at oil production sites around the world. GGFR, in partnership with the U.S. National Oceanic and Atmospheric Administration (NOAA) and the Colorado School of Mines, has developed global gas flaring estimates based upon observations from two satellites, launched in 2012 and 2017. The advanced sensors of these satellites detect the heat emitted by gas flares as infrared emissions at global upstream oil and gas facilities.
“Awareness of gas flaring as a critical climate and resource management issue is greater than ever before. Almost 80 governments and oil companies have committed to Zero Routine Flaring within the next decade and some are also joining our global partnership, which is a very positive development. Gas flaring reduction projects require significant investment and take several years to produce results. In the lead-up to the next UN Climate Change conference in Glasgow, we continue to call upon oil-producing country governments and companies to place gas flaring reduction at the center of their climate action plans. To save the world from millions of tons of emissions a year, this 160-year-old industry practice must now come to an end.” said Zubin Bamji, Program Manager of the World Bank’s GGFR Partnership Trust Fund.
IEA supports Indonesia’s plans for deploying renewable energy
The IEA is carrying out a large work programme on power system enhancement with the Government of Indonesia to help it modernise the country’s electricity sector, including support for overcoming challenges inherent in integrating variable renewables like wind and solar PV.
As part of the work programme, the IEA hosted a series of webinars in early 2021 where Indonesia’s Ministry of Energy and Mineral Resources and national power utility PLN could learn from other countries’ experiences of integrating and setting targets for variable renewable energy.
An introductory session on the principles of integrating renewable energy was held ahead of the country specific sessions. In this session, the IEA presented its framework for renewable integration phases to the Ministry and PLN, highlighting the different challenges often faced during renewable integration as well as what flexibility options can be deployed to tackle these challenges.
In the first country session, IEA presented the main findings of the Thailand flexibility study that the Agency carried out in cooperation with EGAT, the Thai electricity utility. The study shows that Thailand has the technical capability to integrate larger shares of variable renewables, but that the lack of commercial flexibility is a major barrier for operating the power system in a more flexible way and thus is the main obstacle for integrating large amounts of renewables.
In the second country session, the Danish Energy Agency presented its work programme with the Government of Viet Nam. The sessions focused on important aspects for integration of renewables, such as the assessing the needs and implications of reserves and forecasting. The session also included a discussion on the main learning points from the boom in rooftop solar that Viet Nam has experienced in 2020.
The third and last country session was on India. The IEA presented both national as well as state-level modelling in order to show some of the contextual differences between national models and models that focus on specific geographical regions. In India, the spot market accounts for only 10% of electricity generation, which shows that India, like Thailand, has some issues with commercial flexibility. The discussion also covered India’s level of dependency on physical power purchase agreements and its impacts on the flexibility of the power system.
All sessions were held behind closed doors to allow for an open discussion between the participating organisations on the issues of renewable integration and possible ways of addressing barriers. The IEA will continue the work with the Indonesian Ministry and PLN on this topic in order to facilitate a path towards a clean, affordable, secure and modern power sector in Indonesia.
This work in Indonesia is undertaken within the Clean Energy Transitions in Emerging Economies programme.
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