Ethiopian Energy^Power Business Portal

Innovative solutions accelerate low-cost renewables in the power sector, providing countries with tools to benefit from renewables scale-up, new IRENA report finds. Countries at the forefront of the energy transformation are getting more than a third of their energy from variable renewables like solar and wind, and they’re doing it in a cost-effective manner. By making use of innovative solutions that allow to integrate a higher share of renewables into power systems, innovation holds the key to a cost-effective global energy transformation.

These findings come from a first-of-a-kind mapping and analysis of innovations that will transform the power sector, launched by the International Renewable Energy Agency (IRENA) today in Brussels. IRENA’s Director-General Adnan Z. Amin presented the report in the presence of EU Energy and Climate Action Commissioner Miguel Arias Cañete at an official launch event hosted by the European Commission. The report “Innovation Landscape for a Renewable-Powered Future: Solutions to integrate variable renewables” contains the most in-depth assessment of the power sector transformation to date. It shows how synergies between different innovative solutions in business models, market design, enabling technologies and system operation are lowering the cost of integrating high shares of variable renewable energy (VRE), while making energy production, transmission and consumption more flexible and empowering a new generation of energy consumers.

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In an electricity world that sees variable renewables at the centre stage, market players and policy makers cannot overlook the need for flexibility, a game where storage technologies are expected to play a key role.

The strong expansion of variable renewables, which are projected to make up more than half of global capacity additions to 2040 in the IEA’s New Policies Scenario (NPS), has major implications for electricity, first among them is the need for increased flexibility. Globally, electricity demand is projected to grow by over 20% over the next decade, but flexibility – the ability of the power system to quickly adapt to changes in power supply and demand – grows by some 80%. Flexibility will therefore be the cornerstone of future electricity systems. It will be met not only by traditional sources of flexibility – such as conventional power plants and electricity grids – but also by new sources of flexibility, including battery storage and demand-side response, which are projected to grow fast and contribute 400 GW by 2040.

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Only partly. It is true that the use of competitive auctions has accelerated cost reductions for some renewable technologies, notably solar PV, onshore wind and offshore wind, establishing price benchmarks that are recognised worldwide. However, these prices cannot be consistently followed, as each country and technology has different resource potentials, financing conditions and auction designs.

That said, overall trends show that recent bid prices for onshore wind and solar PV technologies for projects to be commissioned by 2023 range from USD 20 per megawatt hour (MWh) to USD 50/MWh. This corresponds to a 45-50% reduction in contract price for both technologies from 2017 to 2022/23; for offshore wind, the decline is almost two-thirds.

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In a damp office at Ethiopia’s Addis Ababa University, doctoral student Hailu Geremew fantasizes about working on the nuclear reactor his country is now pondering building. “Oh that is my dream, my dream, my dream,” said the nuclear physicist, 32, wearing rectangular glasses and a cardigan.

Geremew is part of a new generation of African scientists whose prospects are expanding as their governments team up with foreign powers on a potential fast-track to electrification. For now, South Africa is the only country on the continent operating a nuclear power plant.But in recent years, at least seven other sub-Saharan African states have signed agreements to deploy nuclear power with backing from Russia, according to public announcements and the World Nuclear Association (WNA), an industry body.

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