Presentation Details
| On Flexibility, Storage and Curtailment in High VRE Power Grids Marc Perez1, Richard Perez1, 2, Marco Pierro3, Jan Remund4. 1Clean Power Research, Bellevue, WA, USA.2SUNY Albany, Albany, NY, USA.3EURAC Rsearch, Bolzano, Italy.4Meteotest, Berne, Switzerland |
Abstract
As power systems move toward very high shares of variable renewable energy (VRE), many studies rely on abundant, low‑cost flexibility delivered through sector coupling—hydrogen production, power‑to‑heat, smart charging, industrial load shifting, DSM. Although these resources can aid balancing, their true activation costs—encompassing infrastructure, digital coordination, customer incentives, and industrial adaptation— may not be priced fully at scale. This possible under‑valuation may skew least‑cost system design and overstate the role of flexible demand. Using data from a calibrated Nova Scotia firm power case study, this paper isolates the economic interaction between flexibility costs, storage costs, and “implicit storage,” defined as intentional VRE overbuild combined with dynamic curtailment. Two sensitivities are performed: (1) varying the marginal cost of flexibility and (2) varying battery energy‑capacity CapEx while holding all other assumptions constant. Across both sensitivities, the results reveal a consistent conclusion: when storage and flexibility are priced realistically, dynamic curtailment becomes a central and cost‑minimizing design element. When the cost of flexibility rises above the marginal cost of VRE energy, optimal curtailment increases rapidly, sharply reducing the levelized cost of firm generation. Even flexibility priced near 10¢/kWh—an arguably modest estimate relative to many practical sector‑coupling pathways—places implicit storage at the core of least‑cost design, yielding firm LCOE reductions of roughly 75%. Similarly, unless battery energy costs fall to extremely low levels (~$2/kWh), curtailment remains essential. These findings indicate that least‑cost, high‑VRE systems must treat curtailment as a deliberate design strategy, not an inefficiency to be minimized. Realistic valuation of sector coupling and storage highlights implicit storage as structurally complementary to both—reducing required infrastructure scale, improving affordability, and enhancing system robustness on the path to firm renewable power.
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No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the author.