Integrating Variable Renewable Energy in Electric Power Markets: Best Practices from International Experience

Integrating variable renewables

Author:  Cochran, Jaquelin | Bird, Lori | Heeter, Jenny | Arent, Douglas

Organization:  National Renewable Energy Laboratory | Joint Institute for Strategic Energy Analysis | Clean Energy Solutions Center | Clean Energy Ministerial

Report Date: 2012



This US government report documents diverse approaches to effective integration of variable renewable energy among six countries—Australia (South Australia), Denmark, Germany, Ireland, Spain, and the United States (Colorado and Texas)—and summarizes energy policy best practices. The study finds there is no one size fits all approach, and that each group has its own mix of policies, market designs and system operations that achieve successful renewable energy integration. 

Key Take-Aways: 

  • The study defined five strategic areas of policy/regulatory intervention: public engagement, especially for new transmission; coordinating and integrating planning of generation, transmission and system performance; developing rules for market evolution that enable system flexibility; expanding access to diverse resources and geographic footprint of operations; and improving system operations.
  • Colorado and Texas serve as good case studies for high-penetration renewable markets in the United States, with 55.6% and 12% of total generation served by renewable energy, respectively. Both Texas and Colorado electricity systems benefited from improved forecasting services, with Xcel Energy in Colorado saving $6 million from a new forecasting system in 2010 alone. 
  • South Australia has benefited from electricity market and renewable energy incentives that have focused on economic drivers rather than selective incentives for individual projects or technologies. National renewable energy targets for which the incentive price is determined by its own market, have provided a technology-neutral subsidy that operates separately from the electricity market and delivered economically appropriate renewable energy generation.

Key Facts: 

  • In Germany, solar energy’s share of non-hydro generation grew from 0.1% to 1.9% from 2001 to 2010.
  • In Spain, solar generation grew from 0.02 billion kWh to 6.3 billion kWh from 2001 to 2010, representing a growth rate of 75%.  Spain is also ready to comply with European commitments to EU renewable energy generation goals. 
  • From 2001 to 2010 solar, tide, and wave energy saw the most growth in Denmark, Germany, and Spain, while wind and biomass waste technologies contributed the most to total generation.

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