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Integration of Renewable Energy Sources

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ENTSO-E is committed to enable the achievement of EU 2030 Climate and Energy Policy goals. In terms of electricity generation, around 45% should come from RES in 2030. To support the necessary evolution of the electricity system, a number of challenges need to be addressed.

Generations from renewable energy sources (RES) are often dispersed and located in remote areas far away from large consumption centres, i.e. cities.  This therefore creates a need for significant new investment in transmission infrastructure. Due to the difficulty in accurately forecasting the electrical output that some renewable technologies can generate in a particular time period (i.e. wind and solar), RES also create additional challenges for system operators.

ENTSO-E’s Working Group Market Design & RES focuses on addressing the effects of renewables on the electricity market design. This work is particularly important as it allows TSOs to better understand the consequences of the large-scale deployment of RES on wholesale markets, which in turn affect the entire European power system.

A coordinated approach is required with 27% share RES

The Renewable Energy Directive has been a crucial and successful instrument to achieve the EU’s 2020 renewables objectives. However, as RES technologies mature and their share in the system rises sharply, ENTSO-E sees the need for a review of the directive with a view to the 2030 RES objective.

Progressive Harmonisation of RES support

Progressive harmonisation should be encouraged through adequate incentives (including evidence of common economic benefits) rather than through legal enforcement. A pragmatic way to achieve harmonisation is to overcome challenges by the agreement and implementation of a step-wise roadmap:

  1. Alignment of the types of national support schemes;
  2. Partial cross-border opening of national support schemes to foreign producers;
  3. EU and MS should discuss fiscal harmonisation: if a common fiscal ground is established the level of support schemes should progressively converge regionally

Coordinating RES support with system development and Market design

We need to emphasise the fact that RES development must not jeopardise the reliable operation, optimal management and sound technical evolution of the European power system. Therefore a number of complementary measures are needed to ensure that RES development goes hand-in-hand with system development and market design.

The Internal Energy Market (IEM) needs to be implemented as soon as possible.

ENTSO-E’s member TSOs are already working on implementing the IEM through network codes, regional projects and initiatives. Moreover, to continuously match the physical reality of the changing power system and to integrate adequately renewables into the system, the market design needs to be reviewed, in particular to ensure correct price signals for all necessary investments.

RES producers should be bound by the same duties and responsibilities as all other electricity generators. Providing incentives for RES producers to correctly forecast their feed-in and hedge their volatility improves system security and economic efficiency. Maintaining priority dispatch for RES may not be consistent with the current functioning of the wholesale market but could under certain conditions remain possible.

Storage, but also flexible generation, demand response and interconnectors can contribute to system adequacy and are therefore important to facilitate RES integration. EU regulatory measures should take into account the potential of each solution and generally be technology neutral to ensure cost-effectiveness. Given the importance of enabling DSR for all customers via dynamic pricing and hedging instruments, accelerated change in retail electricity markets is crucial for achieving a better functioning market in each Member State and Europe-wide while increasing RES and maintaining security of supply.