The hidden challenges of renewable energy for the grid
Jan 17, 2025
The promise and challenge of renewable energy
In the quest for depolluting our ecosystem, creating a more liveable environment and moving away from fossil fuel, renewable energy is at the forefront of a cleaner, more sustainable future. With sources like solar, wind, and hydropower offering abundant, clean alternatives to fossil fuels, the States are increasingly subsidising the shift toward greener energy solutions.
However, integrating renewable energy into power grids that have been designed and optimised over the years for very predictable energy sources introduces new, unique challenges. Unlike traditional power plants that provide a steady and predictable electricity supply, renewables are inherently variable: solar panels only generate power when the sun is shining, and wind turbines only work when it’s windy.
Balancing supply and demand, maintaining grid stability, and ensuring efficient energy distribution requires a new way of thinking and approaching the problem: innovative strategies, modernised infrastructure, and more importantly a change in consumers’ interaction with the grid.
What Germany’s grid struggles teach us
In no other country has been clearer than Germany: after the Fukushima disaster, Germany announced a move away from Nuclear to favour renewables.
As they moved away from Nuclear energy, Germany has seen a significant increase in its renewable energy production. In 2011, renewable sources accounted for approximately 20% of the country’s electricity consumption, by 2023, this share had risen to over 65%, while nuclear energy share declined to 11%.
This shift to sustainable energy however has also introduced challenges in maintaining grid stability and energy security. For instance, in 2015, the rapid increase in renewable capacity outpaced grid development, resulting in grid congestion and the need for costly interventions to balance supply and demand.
Additionally, the mismatch between renewable energy production in northern regions and consumption centres in the south has led to transmission bottlenecks, affecting the entire EU energy grid, and further complicating grid management.
Let’s dive into why renewable energy creates grid problems and how Germany’s experience can inform solutions for a sustainable future.
Why does renewable energy challenge the grid?
In a word, unpredictability. Unlike traditional power plants, which can generate a consistent and predictable flow of electricity, renewable energy sources are inherently variable.
Consumers’ behaviour has always been the variable and energy providers have always incentivised off-peak over on-peak consumption. But over the years Economy moving from Industrial to Services as well as a different pattern made the “off-peak” window harder to constantly predict.
Those challenges can be summarised in:
Intermittency: energy production from renewables is not constant both within the day and within a time period causing fluctuations in power availability as well as overproduction during traditional “off-peak” times.
Overproduction: during periods of high renewable generation, such as sunny or windy days, the grid may produce more electricity than needed, leading to wasted energy if storage solutions aren’t available.
Stability: power grids are optimised for stable voltage and frequency to operate efficiently. Sudden drops or surges in energy generation can destabilise the grid without proper balancing mechanisms.
Regional Imbalances: renewable energy production is often concentrated in specific regions, far from major population centres, creating bottlenecks in energy distribution.
When we are looking at the Germany’s case, those problems were exposed even more:
Surpluses and Curtailment: the surplus on particularly windy or sunny days, has forced German operators to curtail renewable production or even pay neighbouring countries to absorb excess power.
Transmission Bottlenecks: Northern Germany produces most of the country’s wind energy, but the demand is higher in industrial regions in the south creating grid congestion and inefficiencies.
Balancing Power Costs: to stabilise the grid, Germany relies on backup power from coal or gas plants and imports energy when renewables fall short. These balancing mechanisms increase operational costs and undermine emissions reduction goals.
Grid Frequency Issues: The influx of intermittent renewable energy complicates maintaining the grid’s required 50 Hz frequency. Deviations can lead to grid failures or outages.
Solutions on the horizon
Germany’s experience highlights the need for innovative strategies and out-of-the-box thinking to manage the integration of renewable energy.
Some of the key solutions being explored include:
Energy Storage: large-scale battery systems can capture surplus energy and release it when demand exceeds supply. A notable example is Tesla’s Hornsdale Power Reserve in South Australia, equipped with a 150 MW/193.5 MWh battery system. It significantly reduced grid instability and lowered energy costs by approximately $40 million in its first year of operation.
Grid Modernisation: upgrading transmission lines and building new infrastructure to connect renewable energy sources to demand centres can help to alleviate bottlenecks. The U.S. Department of Energy’s Smart Grid Investment Grant (SGIG) program helped modernise transmission infrastructure by upgrading substations and deploying automated sensors across power lines. This initiative improved grid reliability and enhanced the ability to manage renewable energy flows.
Flexible Demand Management: encouraging consumers to shift electricity usage to times of high renewable generation through pricing incentives can help balance supply and demand. In the United Kingdom, the “Time of Use” (TOU) tariffs encourage households to shift energy usage to newly redefined off-peak periods by offering lower rates during times of high renewable generation.
International Energy Sharing: expanding cross-border electricity trading allows countries to share surplus energy and reduce grid stress. A good example of this type of cooperation is the Nord Pool market, which spans across Nordic and Baltic countries, and demonstrates successful cross-border energy sharing. By trading electricity between countries, Nord Pool has enabled nations like Norway and Denmark to balance energy surpluses and deficits, improving grid stability.
Hydrogen Production: using excess energy from renewables can be used to produce hydrogen for energy storage and industrial. The HyBalance project in Denmark is a good example of using excess wind energy to produce green hydrogen, which can be stored and used for transportation or industrial purposes.
What can we learn from those experiences?
Germany’s grid challenges expose the importance of planning and innovation when scaling renewable energy adoption. While renewables are essential for a sustainable future, their integration must be carefully managed to maintain grid stability and avoid power outages.
End users also play a critical role in ensuring a stable and efficient power grid. Through conscious energy use and smart consumption decisions, consumers can help manage grid fluctuations, alleviate strain during peak demand, and optimise the utilisation of renewable resources and in doing so become an active player in the energy transition. Shifting energy usage to off-peak hours and adopting energy-saving habits empowers consumers to actively participate in creating a sustainable energy landscape.
One of the simplest ways users can contribute is by leveraging demand-response programs or “time of use” (TOU) tariffs, which offer incentives for consuming electricity during times of high renewable generation. Charging electric vehicles overnight, running appliances during off-peak hours, and using smart home systems to manage energy consumption are practical steps that help stabilise the grid.
Additionally, investing in home energy storage systems allows users to store solar-generated electricity for later use, further reducing dependence on grid power during peak times and further enhancing grid stability.
Key Takeaways
Renewable Integration Challenges: variability in renewable energy generation, regional imbalances, and periods of overproduction create complexities in managing a stable and efficient grid.
Emerging Solutions: Energy storage systems, grid modernisation efforts, flexible demand management strategies, and hydrogen production provide innovative paths to address these challenges.
End User Empowerment: adopting energy-efficient behaviours, shifting usage to off-peak periods, and participating in programs that support grid balance, fostering a smoother transition to renewable energy.
Building a reliable and efficient grid for renewable energy is essential for achieving a sustainable, low-carbon future. With innovation, collaboration, and active user participation, these challenges can transform into opportunities for long-term progress.
