Unveiling the impact of wind and solar variability on European power

The declining dominance of conventional price-setting generation has brought to light a fascinating trend: the influence of short-term fluctuations in wind and solar generation on power prices and revenue outcomes. With an increasing integration of variable power supply into larger systems, the need for market flexibility has become more pronounced.

As the growth of correlated variable supply drives decarbonisation, flexible resources have become indispensable. Our recent report, European power long-term sensitivity: impacts of wind and solar variability, highlights the critical role that flexible assets play in mitigating the impacts of variable renewables, alongside modelling alternative weather years and exploring power prices, generation volumes and wholesale revenues in Germany, Britain, France, Spain and Italy.

Fill out the form on the right to read a complimentary extract from the full report and read on for an introduction.

Renewable energy system integration challenges and opportunities vary across Europe

In Germany, for instance, a somewhat inflexible thermal capacity mix contributes to higher levels of wind and solar curtailment. On the other hand, low wind days in France are balanced through increased imports and short-term utilisation of gas plants.

Additionally, the pressure exerted by wind, solar and other low-cost supply on price formation has led to a growing number of low and negative wholesale prices; a phenomenon that is gaining prominence across Europe as markets undergo rapid growth in wind and solar.

Source: Wood Mackenzie, European power long-term sensitivity: impacts of wind and solar variability report 

As periods of concentrated wind and solar availability become more common, volumes of constrained energy from these sources will inevitably rise. While the spread of expected wholesale capture prices for wind and solar assets varies by market, the observed spread in capture prices for conventional flexible technologies exhibits the greatest variability across scenarios.

The availability of flexible thermal, energy storage, responsive demand and interconnection offer a means to effectively mitigate system volatility and facilitate renewables integration. In our sensitivity analysis, dispatchable gas generation demonstrates the widest range of capture prices and generation outcomes.

This weather sensitivity analysis offers a comprehensive examination of our capacity and supply mix outlooks. Rest assured, there are ample flexible resources – both in terms of supply and demand – to balance the system in all cases.

Find out more

To read an extract from European power long-term sensitivity: Impacts of wind and solar variability, simply fill out the form at the top of the page.