A recent study from a prestigious economic research organization concludes what many energy industry officials have long said: Expansion of intermittent wind and solar power stills need backup from electricity generated by natural gas.
The Massachusetts-based National Bureau of Economic Research (NBER), which over the years has been associated with 25 Nobel Prize winners in economics, recently published a white paper on the issue.
Major authors of the report were Elena Verdolini, Francesco Vona, and David Popp. It’s an international group of authors with Verdolini being based in Italy; Vona in France and Popp in Syracuse, New York.
The report is titled “Bridging the Gap: Do Fast Reacting Fossil Technologies Facilities Renewable Energy Diffusion?”
The report has also generated some mainstream media buzz. For example, the New York Times carried an Aug. 11 article headlined “Turns out wind and solar have a secret friend: Natural Gas.”
“We show that a 1% percent increase in the share of fast-reacting fossil generation capacity is associated with a 0.88% percent increase in renewable in the long run,” the NBER authors say in the report.
“The diffusion of renewable energy in the power system implies high supply variability,” the authors note in the report. “Lacking economically viable storage options, renewable energy integration has so far been possible thanks to the presence of fast-reacting mid-merit fossil-based technologies, which act as back-up capacity. This paper discusses the role of fossil-based power generation technologies in supporting renewable energy investments.”
To study the issue, the NBER researchers looked at data from 26 Organization for Economic Cooperation and Development (OECD) countries between 1990 and 2013.
The NBER report quoted one grid manager in Germany as saying that 8 MW of back-up capacity are required for any 10 MW of wind capacity added to the system.
Martin Hermann, CEO of 8minutenergy Renewables, argues that only the ability to store solar electricity for three to five hours will eventually “allow a precise overlap between the PV production curve and the demand peak,” while 20 hours of storage are necessary for PV to work as a base load resource,” according to the report.
Such large scale storage technologies or the dispatch of electricity over long distances are still not possible, the NBER authors say in the report.
Coal-based baseload generation, “which comprises coal based and low efficiency generation technologies, cannot easily compensate for renewable variability due to slow reacting times and high capital costs,” the authors say.
“Fast-reacting fossil technologies (FRF henceforth), which includes most gas-generation technologies, Combined Heat and Power and Integrated Gasification Combined Cycle to name a few, are characterized by mid-merit order, quick ramp-up times, lower capital costs and modularity (meaning that efficiency does not fall significantly with size). They are thus particularly suitable to meet peak demand and mitigate the variability of renewables,” according to the report.
“We thus argue that a policy and academic debate centered on the juxtaposition of renewable (clean) and fossil (dirty) technologies misses this important point, leads to an underestimation of the costs of renewable energy integration, and does not contribute to stressing the importance of funding and developing solid alternative options such as cheap storage technologies,” according to the authors.