Growing penetration of renewable energy in electricity markets around the world holds the promise of a more sustainable energy future. However, the integration of highly variable, non-storable, and somewhat unpredictable renewables such as wind and solar also raises serious issues for power system security, industry economics, and current business models. Against this rapidly changing and uncertain background, the newly formed Energy Policy Analysis Group (EPAG) at the ZHAW School of Management and Law, together with the Centre for Energy and Environmental Markets (CEEM) at the University of New South Wales (UNSW Australia), hosted a Symposium that brought together 100 experts from various countries and stakeholders from a range of different backgrounds.
Flexibility, the demand side and infrastructure
Kicking off the day with keynote speeches that outlined the situation in five key countries, participants learned how support for renewables in Spain has transitioned from “the sunny days into the shadows” and that Ireland is a country with one of the highest rates of wind energy penetration in the world. Already today, Ireland has to manage an increasingly variable and volatile system. Whilst Switzerland is also set to increase production from renewables, in particular solar PV, it was noted that due to its generation structure (a lot of storage) and interconnection to neighbouring countries, it has “more time” to deal with these issues than many of its neighbours. All speakers highlighted an increasing role for flexibility (both on the supply and the demand side) and noted that changes to the technical infrastructure, market design and policy frameworks are needed to cope with the integration of an ever larger share of renewables.
The important role of public acceptance
These key issues with regards to market design, renewable energy policy and network infrastructure were further explored in three expert workshops. Many interesting results emerged, including the realisation that renewable energy policy in Australia, Switzerland and the U.S. actually faces a number of similar challenges, for example related to the potentially disruptive issues surrounding public acceptance of renewable generators and additional network infrastructure.
Wind and solar as cheap as fossil Generators
After lunch, participants learned from Simon Mueller of the International Energy Agency that several wind and PV projects can actually compete on a cost level with their fossil alternatives – and are of course less polluting both regarding greenhouse gas emissions and local pollutants. Again the importance of flexibility on both the supply and demand side was highlighted.
Switzerland as “the candle on the cake”
Following on from this international perspective, two panels discussed current and future challenges for the Swiss electricity industry. Stakeholders from industry, policy making, the network operator, consultancy, and research presented and discussed their views. Moderated by Christian Schaffner of the Energy Science Center (ETH Zurich), participants learnt that a lot of things are working well at present, including the short-term electricity markets, but that there is great uncertainty surrounding the long-term outlook. That is why there is a wish for “clear signals” from policy makers. This uncertainty is compounded by the interconnection of Switzerland to its neighbours, which is merely the “candle on the cake” of a future European-wide electricity market.
The Symposium concluded with three scientific workshops on research methods in the field of energy system models, experimental economics and empirical analyses.