In the dynamic world of renewable energy, the integration of variable renewable energy (VRE) sources like wind and solar into the power grid presents both opportunities and challenges. A groundbreaking study led by Yunzhou Zhang from the State Grid Energy Research Institute in Beijing, published in ‘Zhongguo dianli’ (China Electric Power), sheds light on a critical aspect of this integration: the system cost of VRE and its economic evaluation.
The study introduces the concept of a VRE equivalent feed-in tariff, a novel approach to calculating the true cost of integrating VRE into the power system. This tariff accounts for the additional investment and operational costs incurred by conventional power units and the power grid itself, costs that are often overlooked in current economic evaluations.
“Consuming VRE must rely on regulatory and supporting power sources such as thermal power units and pumped storage, as well as the support of power grids,” Zhang explains. “This increases the investment and operation cost of conventional power units and power grids, which we refer to as the system cost of VRE.”
The research proposes a methodology for calculating this system cost and suggests a mechanism for allocating these costs based on the equivalent feed-in tariff. This approach aims to stimulate the internal motivation of each entity involved in the power system to promote the consumption of VRE.
The findings reveal that, despite the system cost, the VRE equivalent feed-in tariff remains higher than the benchmark price of coal-fired plants from 2020 to 2025. This discrepancy highlights the challenge of utilizing renewable energy within the current state-set price framework. However, the proposed system cost allocation mechanism offers a pathway to incentivize the use of VRE, potentially reshaping the energy market.
The implications of this research are far-reaching. By providing a more accurate economic evaluation of VRE, the study could influence policy decisions, encourage investment in renewable energy infrastructure, and drive the high-quality development of renewable energy. It also underscores the need for a more holistic approach to cost allocation in the power sector, one that considers the true system cost of integrating VRE.
As the energy sector continues to evolve, the insights from Zhang’s research could play a pivotal role in shaping future developments. By addressing the economic barriers to VRE integration, the study paves the way for a more sustainable and efficient power system. The proposed equivalent feed-in tariff and system cost allocation mechanism could become key tools in the transition to a greener energy future, influencing everything from policy-making to commercial investments.
