IEEE Power & Energy Magazine - November/December 2015 - 77

Variable generation achieves instantaneous penetration
levels of more than 50% in most countries, reaching
the highest levels in Denmark.

for new investments to ensure capacity adequacy. In addition, some economists argue that significant price spikes are
required to provide the revenue to justify the construction of
new generation capacity but that these will disappear once
additional capacity is added to the system (assuming there is
the political will to allow such price spikes in the first place).
Of course, technically it is clear that the stochastic nature
of VR generation limits the possible contribution of VR to
system capacity.
In response to these concerns, a variety of capacity
remuneration mechanisms (CRMs) have been proposed. As
Figure 11 indicates, there is no single European approach.
ACER (the Agency for the Cooperation of Energy Regulators) points out that the diversity in national solutions of
CRMs in Europe poses severe problems. The challenge of
insufficient capacity in the integrated European energy market should be addressed as a pan-European issue. The present
lack of coordination is detrimental to the market integration process being pursued, and it has the potential to create
market distortions. In April 2015, the European Commission launched an inquiry into member states' measures to
ensure sufficient electricity supplies. The future of capacity
adequacy in Europe hinges in large part on the outcome of
these ongoing discussions.

Conclusions
In the early developmental stage, the volume of generation
from VR had only a marginal impact on the system. A "fit
and forget" approach, where this type of generation is not
integrated into the electricity market but managed with priority dispatch, was acceptable.
As the role of VR increasingly extends to larger shares
of electricity production, such an approach may pose challenges for the rest of the system and may not be the most
efficient means to achieve secure integration. In many European countries with priority dispatch, VR regularly reaches
instantaneous energy penetration levels of 50% or more,
without challenging security of supply. However, priority
dispatch is more and more being developed and put into different contexts in Europe, and regulation is evolving toward
the integration of VR into electricity markets and ancillary
service markets, where dispatch is executed according to
price differences.
Today's energy-only market might not serve the requirements of tomorrow's challenges, with increasing VR and
decreasing prices pushing conventional plants out of the
november/december 2015

market and potentially leading to a lack of system service
under certain conditions. Hence, well-functioning energy,
ancillary, and, perhaps, capacity markets will be decisive
in ensuring the transition of the electricity sector, fulfilling
policy targets concerning the phasing out of fossil fuels, and
keeping security of supply at a high level.

For Further Reading
F. Van Hulle, I. Pineda, and P. Wilczek (The European Wind
Energy Association, EWEA). (2014, Sept.). Economic grid
support services by wind and solar PV-A review of system
needs, technology options, economic benefits and suitable
market mechanisms. Final publication of the REserviceS
Project, Brussels, Belgium. [Online]. Available: http://www.
reservices-project.eu/wp-content/uploads/REserviceS-fullpublication-EN.pdf
(2015, Mar.). Cost-effective integration of photovoltaics
in existing distribution grids: Results and recommendations
from the METAPV project, Brussels, Belgium. [Online].
Available: http://www.metapv.eu/sites/default/files/MetaPV_
Final_Report_Results_and_Recommendations_FP.pdf
(2105). European Network of Transmission System Operators for Electricity. Network code on electricity balancing
(EB). [Online]. Available: https://www.entsoe.eu/majorprojects/network-code-development/electricity-balancing/
Pages/default.aspx
(2015, June 17). Technical and economic issues of the integration of a large share of variable RES to the European Interconnected systems. [Online]. Public communication of EDF
R&D, Brussels.

Biographies
Thomas Ackermann is with Energynautics GmbH, Darmstadt, Germany.
Enrico Maria Carlini is with the Italian TSO, Terna,
Italy.
Bernhard Ernst is an independent consultant in Germany.
Frank Groome is with EirGrid, Ireland.
Antje Orths is with the Danish TSO Energinet.dk and
OvG University, Magdeburg, Germany.
Jon O'Sullivan is with EirGrid, Ireland.
Miguel de la Torre Rodriguez is with the Spanish TSO,
REE, Madrid, Spain.
Vera Silva is with EDF R&D, France.
p&e

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http://www http://www.reservices-project.eu/wp-content/uploads/REserviceS-full http://www.metapv.eu/sites/default/files/MetaPV_ https://www.entsoe.eu/major http://www.Energinet.dk

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