South Australia joins Denmark in elite club of two, “pushing the boundaries” of renewable energy integration

South Australia has joined an elite global club, after being listed alongside Denmark as the only other energy system in the world to be successfully managing significant volumes of surplus variable renewable energy across the year – albeit with a lot of hard work ahead.

In its latest global stocktake of variable renewable energy (VRE) integration across 50 power systems, the International Energy Agency says South Australia has joined the ranks of grids with the highest share of solar and wind in the world.

On the IEA’s scale, this puts South Australia in Phase 5 of the integration of renewables (Phase 6 is the top ranking), managing a share of solar and wind that averages out to be higher than fossil fuels over most of the year and at times surpasses 100% of local demand.

According to the IEA report, South Australia hit Phase 5 on its scale “for the first time” in 2023, after VRE generation provided at least 70% of its total generation during half of the year in 2023. It joins Denmark, which in 2022 became the first country to be classified as Phase 5.

And while this is an achievement to be extremely proud of – of the 50 systems analysed by the IEA, 25 are in Phases 1 or 2, representing around 60% of global electricity generation – it also puts South Australia at the pointy end of renewable energy integration, where big changes need to happen fast, to keep the transition on track.

“A growing number of power systems are pushing the boundaries of VRE integration, successfully managing very high shares of variable renewables,” the report says.

But these “frontrunner systems” face complex challenges related to stability and flexibility, which the IEA says call for a transformation of how power systems are operated, planned and financed.

Certainly, South Australia is facing numerous challenges to get its grid from where it is now, to net 100 per cent renewables. And, as the report notes, some of these challenges are uniquely complex.

“In contrast to the case of Denmark, South Australia has limited interconnections with its neighbours, and the impact of solar PV on the net load is more visible,” it says.

“High VRE periods resulting in surplus generation are managed by a combination of measures including energy exports via interconnection to the neighbouring state, storage with battery energy storage systems (BESS), demand response and curtailment.

“High ramps at sunrise and sunset hours resulting from solar PV generation are managed predominantly by fast-acting gas turbines and the BESS, as well as accessible resources in the rest of the NEM through the interconnector.”

To this end, Project EnergyConnect – a “nation critical” new transmission project that will join up key renewable energy zones in South Australia, New South Wales and Victoria – is expected to help.

Meanwhile, other parts of Australia are not far behind – the IEA says Australia, as a nation, should be well into Phase 4 by 2030, where it will face “key operational challenges” to the way the power system responds to maintain stability immediately following disruptions in supply or demand.

Just this week in New South Wales, the state’s “potential output” of renewables – that is, the amount available for use or storage in ideal circumstances – was clocked at 99.8 per cent of native demand just before 11am on Sunday, with a combination of sunny weather and strong winds across most of the state.

But, as Renew Economy editor Giles Parkinson notes here, that level of variable renewables currently can’t be accommodated on the NSW system, for a combination of technical and economic reasons. And it is precisely this problem that the IEA report is hoping to address.

“By 2028 the main case of our renewables forecast shows that a range of countries …reach unprecedented annual shares of generation originating from wind and solar power plants – some above 65%,” the report says.

“This development calls for a better understanding of how this could affect electricity systems even further, and what measures can be taken on several fronts to ensure that those higher levels of VRE are integrated in an affordable and secure manner.”

And it warns that a failure to solve these challenges could derail the global climate effort.

“Should integration measures fail to be implemented in line with a scenario aligned with national climate targets, up to 2,000 terawatt-hours (TWh) of global VRE generation would be at risk by 2030, endangering achieving national energy and climate pledges,” the report says.

“This potential loss – equivalent to the combined VRE output of China and the United States in 2023 – stems from possible increases in technical and economic curtailment, as well as potential project connection delays.

“Consequently, the share of solar PV and wind in the global electricity mix in 2030 would reach 30%, lower than the 35% in the case where integration measures are implemented on time. If this decrease is compensated by increased reliance on fossil fuels, it could lead to up to a 20% smaller reduction of carbon dioxide (CO 2) emissions in the power sector.”

It is comforting to note, however, that Australia is not alone in the challenges it faces – even if it is at the leading edge of some of them.

The IEA says successfully integrating higher levels of solar and wind energy into the grid will increasingly rely on measures taken to meet two “critical requirements:” electricity grids, and procuring flexibility from a broad range of assets.

Grid congestion is a worldwide issue, the IEA notes, considering that global investment in renewables almost doubled between 2010 and 2023, while from 2015 grid investment has stagnated at $US300 billion a year until 2024, when it rose to $US400 billion.

“As a result of insufficient grid investment, at least 1,500 GW of solar and wind projects at an advanced stage were waiting for grid connection as of mid-2023,” the report says.

“Further, many countries are facing grid congestion issues, which are expensive to address due to the high cost of dispatching power plants to overcome immediate issues and because of the large amount of investment necessary to overcome congestion in the future.

“It is crucial for countries to accelerate grid expansion and upgrades, as it enables benefits beyond solely integrating VRE, such as improved electricity access and supporting overall demand growth.”

But, as Australia is experiencing, grid development takes a long time to materialise, the report adds, which means any and all complementary solutions with shorter lead times must be tapped to improve the integration of solar and wind.

On power system flexibility, the IEA says most of these needs will be met by solutions that are already in use, such as batteries, demand response and, to a smaller extent, curtailment.

Flexibility also extends beyond conventional generators, the report adds, encompassing storage, new electricity-based end uses, and grid infrastructure, all of which vary regionally.

“This report calls for strategic government action, enhanced infrastructure, and regulatory reforms to ensure the successful large-scale integration of solar PV and wind in order to meet global energy transition targets,” the IEA says.

“Robust data, stakeholder collaboration and government prioritisation of integration measures are essential for overcoming these challenges and achieving a sustainable energy future.”