Expert Talk: What can we learn from the COVID-19 pandemic for the renewable energy transition?

The corona pandemic impacts the whole society: the private life, but also all industrial and service sectors. Due to a deceleration of the economic activities by the measures taken to confine the virus, there is a major change in  electricity generation and demand patterns, which are also reflected on the electricity prices we are currently observing.

Electric energy is the driving force behind almost all activities in our daily lives. We heavily depend on it and take it for granted. Having a reliable power supply is currently ever more important to keep healthcare services and food supply to continue uninterrupted.

In this analysis, we are going to have a closer look at the changing patterns of power generation, demand and electricity prices, comparing them to a number of previous years. Based on this comparison, we will try to understand how these changes could affect supply reliability, not only in the coming days and weeks, but also in the future when the transition to renewable energy will be more advanced, reaching for a full renewable power system by 2050 in Europe. For this analysis, we rely on the data provided by the Entso-e transparency platform [1].

Let us first have a look at the power demand in Belgium. Figure 1 depicts the hourly demand between March the 31st and April the 24th throughout the years 2017 – 2020. We can see that the electricity demand in Belgium reduced significantly with respect to the previous years. The average demand in this period for the last four years is given in Table 1. We can see that this average demand has been between approximately 9500 and 9700 MW throughout the years 2017 – 2019, and has dropped to 7973 MW for 2020, corresponding to a decrease of 18%. The volatility of the demand, however, has not changed significantly in 2020. Table 1 shows the ratio of the maximum and the minimum demand recorded in this period: the dynamics did not change.

Figure 1 – Hourly demand in Belgium throughout March 31st – April 24th

Table 1 – Average power demand in Belgium March 31st – April 24th

Figure 2 shows the power generation mix in Belgium between March 31st and April 24th. Although at first glance the curves might look very similar, some interesting differences can be observed when looking more closely. We can observe that on average the power generation from nuclear and gas fired power plants in Belgium within this period has been considerably higher in 2019. The average power generation of 2020 (8088 MW) higher than the years 2017 and 2018 where limited nuclear capacity was available (Table 2). The share of the average renewable generation is considerably higher in 2020 (1651 MW) than in 2018 (998 MW), mainly caused by higher PV generation and high offshore wind generation on a number of days. This difference is mainly reflected in the power generation of the natural gas fired power plants. On average, the nuclear power generation has been slightly higher in 2020 (4105 MW) than in 2018 (3875 MW) for the given period.

Figure 2 – Generation mix in Belgium March 31st to April 24th 2017-2020

We can also observe that the share of renewable generation from solar PV and wind within the total power generation has been surpassing 20% in 2020 due to higher power infeed from PV and wind sources, as shown in table 2.

Table 2 – Average power generation and share of renewable generation in Belgium March 31st – April 24th

The combination of low demand and high share of renewable generation has affected the electricity prices greatly. Figure 3 shows the day-ahead electricity prices observed in Belgium and its neighboring countries for the period of March 31st to April 24th. We can see that in all countries, the day-ahead prices reach negative values during the weekends, due to the very low power demand and high renewable generation. Although day-ahead prices close to and below zero have also been observed in 2019, on average the day-ahead market prices within this period are less than half of the prices observed in the previous years, as shown in table 3. With the exception of Germany, where due to a high share of renewables, negative prices occur more often, negative price peaks are much more frequent and pronounced in 2020, where there is not enough demand to absorb renewable generation. We can also observe that Belgium has been affected more than France and the Netherlands by the negative price peaks around the 20th of April caused by the high wind infeed in Germany, due to a higher share of  renewable generation in Belgium in that period. Although negative day-ahead prices are the correct signal to represent lack of flexibility, it is also caused by stringent renewable curtailment policies [2, 3, 4]. As such, in a renewable energy dominated future, large scale deployment of demand flexibility and storage will be crucial in combination with a reorganisation of the electricity market as we know it.

Figure 3 – Day-ahead electricity prices in Belgium, Germany, France and the Netherlands March 31st – April 24th

Table 3 – Average day-ahead electricity prices between March 31st and April 24th

The electricity prices are very often determined by the amount of renewable generation, especially coming from Germany. Figure 4 shows the generation mix in Germany and table 4 provides the average power generation in Germany and the share of renewables. We can observe that in Germany the share of renewable generation has been similar to the year before in the first half op April. In the second half of April with increasing wind power generation in Germany, day-ahead prices have been pushed down resulting in the large negative peaks we are observing in Europe.

Figure 4 – Generation mix in Germany between March 31st and April 14th, 2017-2020

Table 4 Average power generation and share of renewable generation in Germany March 31st – April 24th

In the days and weeks to come, the reliable operation of transmission assets will play a very important role to continue life-essential services. If the by the Covid-19 virus caused low demand and a high renewable generation period continues, we can expect higher stress on the interconnectors, even if the electricity demand is low. The European blackouts in the past have mainly been observed in low demand moments, and were caused by violation of dynamic stability criteria often on interconnectors leading to cascading outages [5,6] or voltage stability issues [7].

The thunderstorm season in central-west Europe is typically between May and August [8]. Thunderstorms are a common cause of power line outages and short interruptions. Outages of highly congested power lines can lead to cascading events, due to high renewable infeed and low demand in combination with low system inertia and lack of short circuit power. As such, sufficiently steady state and dynamic security margins need to be kept in order to guarantee a continuous electricity supply. The experience in such situations is growing for instance in the East of Germany where 50 Hertz, the subsidiary of Elia is handling the largest relative share of renewables in a given TSO area in Europe.

All in all, we can see the current situation as a down-scale experiment of a renewable generation dominated future in 2050 and draw a number of conclusions on how to improve the power system to be futureproof.

1. The combination of low demand and relatively high share of renewable generation have resulted in very low and even negative day-ahead market prices which are not observed often. In the future, with a much higher share of renewable generation, the organisation of the electricity markets needs to be re-thought in order to guarantee a well-functioning electricity market.
2. In a renewable generation dominated future, demand flexibility and various types of short- and long-term storage will play a key role for balancing renewable generation and demand in various time frames.
3. Especially in the second half of April we observed a high share of renewable generation in the system passing 20% average power generation in Belgium and close to 40% in Germany. Nevertheless, this a modest share compared to the renewable generation expected in 2050. In the future, this may lead to significant stresses on the interconnectors causing serious congestion on one hand and a higher risk of system stability issues due the lower system inertia caused by the lack of classical generation, on the other. The use flexible transmission assets and storage systems will be necessary to keep the system operable.