A growing share of variable renewable electricity generation will require more flexibility of the electricity system on multiple time scales
The Dutch 2019 Climate and Energy Outlook estimates that in 2030, wind and solar energy will be responsible for 66% of electricity production in the Netherlands. In 2018, the share of electricity from wind and solar energy was around 12%. Due to this large anticipated increase, the supply of electricity will become variable and less easily controllable. This differs from electricity generated in gas- and coal-fired power stations. It also differs from CO2-neutral controllable electricity from, for example, power stations using biomass as input. The increasing variability will require adjustments in the electricity supply.
Since gas- and, especially, coal-fired power plants are among the largest emitters, electricity from renewable energy sources can make a major contribution to the reduction of CO2 emissions. A major greenhouse gas emissions reduction will be achieved if wind and solar energy together provide the majority of electricity production in the Netherlands. For the energy transition, it is of great importance that this amount of variable electricity can be used effectively. The significance of large scale storage of electricity is frequently emphasised, such as the conversion of electricity into hydrogen via electrolysis. This type of large-scale energy storage can play an important role in bridging seasonal fluctuations in the demand for heating. However, this is only one of the options to deal with variability.
In the Flexnet project, TNO Energy Transition and various members of branch organization Netbeheer Nederland (the Dutch branch organisation of energy network operators) carried out extensive research into how best to deal with the growing amount of variable supply of electricity in the Netherlands. The most efficient way appears to be to make the entire electricity system flexible. In other words, both supply and demand should become variable. This can be done through demand side response (DSR), whereby, for example, a production process uses more or less electricity depending on the supply. It is not optimal from an economic point of view to tackle flexibility with one single solution, but rather it is more efficient to focus on a combination of possibilities. In addition to the flexible generation of electricity, there are four other important options: electricity storage, import and export, demand control and curtailment of variable renewable sources, where the latter refers to a reduction in the output of a generator from what it could otherwise produce given available resources, typically on an involuntary basis). On an annual basis, curtailment does not lead to a huge loss because wind farms or solar panels mostly do not produce at full capacity at a time when demand is insufficient.
Well-known storage options for electricity are batteries and hydrogen production with electrolysis. From a price perspective, batteries are currently the most suitable for small-scale storage over a period of a few hours or days. The advantage of hydrogen is that it is suitable for large-scale storage over a longer period. A disadvantage of electricity storage in the form of hydrogen is the high losses that occur during electrolysis and subsequent conversion to electricity. However, this disadvantage does not mean that it is not a useful application. Hydrogen can be used for a much wider range of applications where fewer losses occur, including the production of sustainable molecules that can be used as raw materials for the chemical industry or as a fuel. As a result, hydrogen production using electrolysis can be an important flexibility option. The application possibilities are further discussed in the technology description on hydrogen.
Demand management includes measures to temporarily purchase more or less electricity, and also to shift the consumption of electricity over time. Using more or less energy is, for example, a possibility in the case of heat production in the industry, if switching between the use of gas and electricity is possible at any time. The electricity is then used for heat production, which is also referred to as power-to-heat. Another possibility for flexible use of electricity is power-to-chemicals, where electricity is used as energy that is required for chemical reactions. Shifting consumption is possible, for example, by not charging an electric car immediately after plugging in, but only at a favorable time, while overall demand remains the same.
Discussions on the future energy system regularly emphasize the importance of electricity storage, in the form of hydrogen or in batteries. These solutions will certainly play a role, but research shows that it is often cheaper to supplement this with other techniques to increase the flexibility of the electricity system. For the Netherlands it appears that the use of a combination of all flexibility options is economically optimal. Detailed information on this can be found in the Flexnet publications referred to below.