The ‘Energy Transition Lab’, established by Wärtsilä, tracks supply and demand pattern throughout Europe with the aim to make industry and policy makers understand the impact of the coronavirus containment measures on electricity markets. The aim of this platform is to help accelerate a green energy transition.
Lack of flexibility at grid level
The lockdown period has unintentionally served as a test of what a system would look like if the dominant energy source was renewables, exposing countries with a lack of flexibility at grid level. Unprecedented demand destruction during the lockdown meant that Germany, Spain and partially the UK, were running their supply-demand balance based on 50-78% renewables on most day since lockdowns began in mid-March. “Germany could have run on 100% renewables, but fossil fuel plants didn’t shut down likely because of what it takes to start back up,” analysts commented.
The coronavirus crisis has caused an average 20% drop in electricity demand across Europe, forcing utilities to stop running many fossil power plants due to their higher marginal costs compared to renewables. However, asynchronous generation (wind, solar) cannot provide this inertia - a feature related to the energy stored in rotating motors of synchronous generators at coal, gas and nuclear power stations. It prevents grid frequency from falling too quickly after a disturbance, e.g. a generator trip, because the inertia stored in rotating motors provides resistance and frequency response.
Need for energy storage, more interconnectors
Since mid-March, wholesale power prices have been down 50% year over year across most of Europe, some days prices are even negative. Flexible generation, however, has been outperforming during that time, and is up 20% in usage compared to last year. Energy storage providers have been benefitting from their ability to charge batteries when prices are low and discharge when prices are higher.
Energy storage and flexible, fast-ramp power sources proved to be vital to balance the sudden rise in renewable contribution. To handle the intermittency challenges of weather-dependent supply from wind and solar power sources, analysts call for stronger interconnection capacity across the EU, to prevent curtailment of excess offshore wind and/or solar power in-feed to the grid.
„The current dynamic shows the need for more power supply flexibility and energy storage across Europe,” analysts concluded.