Preparing Governments and Utilities for

Massive Renewable Integration

It All Starts with Climate Change
The 2015 Paris Agreement set the goal to keep the global temperature rise well “Decarbonization goals
beyond the power sector
below 2 °C compared to the 1990 levels and to pursue efforts to limit the
will drive the need for
increase to 1.5 °C by the end of this century. To reach this goal, a transition to a massive renewable
low-carbon energy sector by 2050-2060 is vital. investments in the years
Renewables (RE) are seen as an essential element in the decarbonization and decades to come”
Guillaume Dekelver, Senior Manager,
of the energy sector. Their integration not only allows to decarbonize the Sustainability Solutions
power sector itself, it also incentivizes the electrification of other sectors through
lower electricity costs, in turn reducing carbon emissions.
IRENA predicts that the share of electricity in the final energy consumption will increase from 20% now up to 49% by
2050, partly due to the electrification of the transport and heating sectors 1.
This combined increase of the electrification of the energy sector and of the renewable share in the power sector will
drive the need for massive investments in renewables in the years and decades to come.

Today’s And Tomorrow’s Energy Systems: The Prominent Role Of Renewables

The large interest in renewables mainly stems from an increased understanding of the variety of benefits which they
bring, typically split in terms of cost, sustainability and security of supply. In short, renewables are:

Competitive: Today, renewables are the cheapest source of new bulk power generation in countries
jointly covering two-thirds of the world population, 72% of the global GDP and 85% of the electricity
demand2. Average global levelized costs of energy for both solar PV and onshore wind reach around
40 USD/MWh, yet record low power purchase agreement prices are regularly broken at substantially
lower price levels.

Clean: the full lifecycle emission intensities of coal- and gas-based power generation are currently
reaching a median value of 1014 and 512 kg CO2-eq per MWh respectively3. RE integration will
have a major role to play to decarbonize power grids with full lifecycle emission intensities of 48 and
11 kg CO2-eq per MWh for solar PV and onshore wind respectively 4.

Reliable: Renewable energy integration diversifies the sources of primary energy supply. Especially
for countries with a high foreign energy dependency (due to a lack of local fossil fuel access),
renewables such as wind and solar could improve the security of supply as their systems become
more resilient against threats such as natural hazards (severe droughts, hurricanes, etc.) and
political turmoil. In developing countries, RE-based electrification projects are providing secure
access in rural and remote areas.

1 IRENA, ‘Global Renewables Outlook,’ April 2020

2 BloombergNEF, ‘New Energy Outlook 2020,’ 2020
3 WEO, ‘the role of gas in today’s energy transitions,’ July 2019
4 IPCC, ‘Mitigation of Climate Change,’ 2014

© ENGIE Impact | 1
Until recently, technologies such as solar PV and wind
farms were seen as a marginal power production
technology. Variable renewable energies nowadays
reach 30% or more of the annual average energy
generation in numerous countries. While instantaneous
injections of more than 30% can be technically challenging,
experience shows that upscaling is feasible by
implementing flexibility options.
Several Flexibility Options Facilitate
High Renewable Penetration Rates:
• Demand-side flexibility: voluntary changes
in the pattern of electric usage by end-users.
Instead of the power generation following
demand, the demand follows the variability of
renewable power production.

Governments And Utilities Are Driving • Supply-side flexibility: flexibility is added to

Decarbonization And Renewable the classical (thermal) power portfolio by
increasing technical ramp rates of power
Integration plants and by facilitating their start-stop
behavior.
In order to reap the fruits of renewable energy, stakeholders
worldwide are specifying net-zero targets by 2050-2060, • Grid flexibility: increasing the geographical
including the US, China, South-Korea, Japan, South-Africa, spread of power systems by interconnecting
Costa Rica, Chile and the European Union as a whole. with neighboring regions decreases the
relative variability of renewable power
These decarbonization commitments boost local jobs
productions and allows to share flexibility.
in the renewable sector and have a positive socio-
economic impact, on top of creating market opportunities
• Storage flexibility: use of storage assets
to export net-zero products and services. such as pumped storage hydro and battery
Strong partnerships between all local stakeholders - storage to decrease the impact of variable
and particularly, governments and power utilities - are renewable power generation.
essential and should be based on a targeted vision,
• Sector coupling: interactions of the power
roadmap and strategy. Governments set long-term targets
sector with other energy vectors such as heat,
to give confidence to all stakeholders, and especially, cold and transport are providing an additional
investors. Thus prompting power utilities to plan their source of flexibility which allows to reach
systems for the years and decades ahead. Whilst higher RES penetration levels, as do linkages
with desalination, hydrogen and power-to-X.
governments’ long-term commitments and power utilities’
detailed planning should ideally go hand in hand, they often
apply a sequenced approach.
In the planning phase, three principal aspects must be taken into account:
1. Feasibility of renewable integration: Operating the future
power system needs to be technically reliable, even with high RE
penetration levels. Utilities are responsible for turning the
government targets into economically, technically feasible
renewable planning, as targets should be reached at least-cost to
protect the local economy and its citizens. Moreover, utilities are
key to swiftly develop renewable projects, as lengthy project
development is often the bottleneck to reach targets.

2. Flexibility options: Bearing in mind technical and economic

feasibility of the future power system, power utilities should set
pathways for flexibility development (supply-side, demand-side,
grid, storage and sector coupling). Successful pathways take into
account local conditions and build on (cross-sectoral)
Key components of a net-zero partnerships.
emissions plan
3. Avoid Carbon Lock-in: If the planning horizon does not cover years of net zero emissions, carbon assets
could be commissioned this decade. However, their decommissioning will be required before the end of their
lifetime, which represents a financial risk for investors, for electricity buyers under take-or-pay contracts and
for the economy as a whole. Utilities planners should therefore consider a long-term planning horizon that
includes the net-zero emissions years.

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How can ENGIE Impact help?
For utilities to set decarbonization
strategies, they have to understand their
techno-economic impacts. ENGIE Impact
experts rely on their technical and
economic expertise and a track-record in
renewable energy services in more than 75
countries across 6 continents.
Along with our strong network of trusted
partners, we support organization build
their decarbonization roadmaps and
strategies by defining sequenced, tailored Renewable integration studies performed by ENGIE Impact
decarbonization pathways:
• Business-as-usual: Emission levels are assumed to grow as a continuation of the trend in the past decades.
Growing demand is typically met by thermal generation. Renewable power remains marginal.
• Current planning: Building on the latest cost trends for
renewables, the renewable power share grows strongly, yet
remains moderate compared to the total power mix. The most
inflexible nuclear and fossil-fuel based thermal units remain in
the mix, yet new thermal investments are more flexible. New
flexibility options, such as battery storage and demand
response, are addressed.
• Decarbonization: A moderate decarbonization target (50-70%)
leads to a high level of renewable penetration, forcing the
decommissioning of inflexible fossil fuel-based thermal units or
their modification for carbon capture and storage. Flexibility
options get a central position in power system operation. Apart
from daily flexibility, weekly and seasonal flexibility needs are
also addressed.
• Deep decarbonization: Net-zero carbon emissions are
achieved by addressing all sectors, including the hard-to-abate
sectors (such as aviation, heavy industry and transport). This Possible emissions pathways
scenario pushes for sector coupling (e.g. by hydrogen, power-to-
X) and massive renewable electrification levels.
We provide an integrated approach, modelling the interactions of renewables beyond the power sector alone and advise
our clients on the added value of coupling power with other energy vectors such as heat, cold and transport. This also
includes desalination, hydrogen and power-to-X. Our expertise covers all layers of analysis, from the high level planning
models to the detailed network studies:
• Long-term energy planning models: Also called capacity expansion models, they identify the most economic
investment decisions for the next 20 to 40 years while complying with a set of predefined constraints (carbon
emission limit, demand-supply balance). These models capture a higher level of temporal granularity (hourly)
while respecting chronology to reflect the intermittent nature of solar PV and wind and to capture different
flexibility options. Cross-sectoral links (hydrogen, gas, desalination) can be developped for the strongest
decarbonization pathways.
• Production cost models: Also called unit commitment and economic dispatch models, they build further on the
long-term models and capture the full complexity of (sub-)hourly operation, reflecting renewable intermittency and
power plant limits (ramp-up, minimum stable level), including detailed chronological interactions.
• Static and dynamic grid models: Due to the intermittency and low inertia of solar- and wind-based renewable
power, technical models, often referred to as network models, need to determine whether the operating conditions
meet imposed/regulatory reliability requirements. Amongst others, this includes analyzing the network security, the
frequency behavior and the voltage control and stability. This analysis points out whether additional operational
measures or additional investments, such as flexibility options and compensation equipment, are required to
ensure secure operation, especially during moments of high renewable power production.

© ENGIE Impact | 3
Related services
Hydrogen roadmaps and strategies Contact Us
Integrating expansion of renewable capacities, storage capacities and green engieimpact.com
hydrogen production capacities to achieve the defined decarbonization goals. Apart
from the green hydrogen and the power sector, we also cover the transport, info.impact@engie.com
industrial and water sectors. +32 2 763 70 70
Flexibility roadmaps
In-depth analysis of the local flexibility options including demand-side flexibility,
supply-side flexibility, grid flexibility, storage flexibility and sector coupling producing
a roadmap on flexibility enhancement of the power system.
Regulatory advisory
To create the right environment for renewable integration and decarbonization,
ENGIE Impact formulates regulatory recommendations.
Stakeholder engagement
To leverage the collective intelligence on renewable integration and decarbonization
and to increase the buy-in of relevant stakeholders, ENGIE Impact develops sector
engagement and management plans. This allows for successful program realization
and implementation.
Macro-economic impact
ENGIE Impact appraises, at a regional or country level, the impact of a renewable
integration and decarbonization strategy on major macro-economic indicators such
as economic growth, employment, debt, state budget, balance of trade or GDP.

Selected References
Optimized RE penetration and operational impact study for its integration in the Kingdom Network –
SEC KSA
Economic and technical feasibility of Saudi Arabia’s strong renewable ambition. Impact on power system
operation and planning of renewable power plants, thermal power plants, storage and interconnection.
Decarbonizing Central Western Europe by 2050 – ENGIE
Analyzes the shift in energy production towards clean sources of energy and the feasibility of making the
electricity, heating and transport sectors carbon neutral. Takes into account energy efficiency, massive
development of renewable electricity and optimized allocation of different energy vectors.
System planning and operational impact study for integrating NEOM RES – NEOM, SEC KSA
Assesses the operational and planning impact of NEOM’s 100% renewable ambitions (+20 GW) in the KSA
power system, with a roadmap towards 2030.
Integration of massive solar PV capacities and storage in Burkina Faso – SONABEL
Analyzes the technical and economic impact of strong renewable integration objectives for Burkina Faso, along
with the battery storage need.
Indonesia least-cost planning and dispatch diagnosis in Eastern Islands – PLN - World Bank
Renewable strategy development for islanded systems, taking into account technical and techno -economic
aspects.
ASSET, A foresight perspective of the electricity sector evolution by 2050 – EU
Analyses the long-term trends affecting the evolution of power systems towards 2050, listing actions to support
renewable integration.