KfW Development Bank

Appropriate grids

To fight climate change, it is not enough to generate electricity from renewable sources. The grid infrastructure must be enhanced too.

By Uli Brunner and Jens Drillisch

The generation of electric power with fossil fuels accounts for almost one third of global greenhouse emissions worldwide. This is the largest single contributor to global warming. The international community wants to confine the average rise in global temperatures to 2° Celsius at most. There are several options for doing so. In the energy sector, the most promising approaches are to boost renewable energies (RE) as well as energy efficiency.

The European Union and its members have agreed on binding objectives. By 2020, the RE share of final electricity consumption must be at least 20 %. Germany is even more ambitious, aiming for an RE share of 80 % by 2050.

Several developing countries have also set themselves ambitious targets to expand RE. Today, one third of the world’s RE capacity is installed in developing countries. The growth potential in these countries is huge.

RE can serve grid-connected centralised power supply as well as de-central off-grid power generation. In this essay we focus on grid-connected approaches. De-central schemes are most useful in rural areas. Rural areas, so far, account only for about a quarter of global energy consumption. Accordingly, grid-connected utilities are more important.

Why the grid matters

To make energy systems sustainable, the expansion of RE is a necessary, but not a sufficient measure. The network infrastructure matters too. After all, green electricity must not only be generated, but it must reach end consumers. The crucial link between renewable energy generation and final energy consumption is the grid.
Two RE characteristics are particularly challen­ging in terms of network infrastructure:
– A large share of RE depends on weather conditions. Power generation therefore tends to fluctuate unpredictably. As electricity power can hardly be stored in an economically efficient way – pumping water in storage basins is an exception that is only viable in some places –, network operators have to balance deviations from planned and actual generation all the time. They therefore need flexible balancing capacities. Otherwise, reliable network operations and quality power supply are at risk and cannot reliably serve economic development.
– RE tends to be generated in places that are far away from where the power is needed. Existing transmission infrastructure has typically grown in history around the fossil-fuelled power stations. It is not designed for feed-in from peripheral power generation facilities like off-shore wind parks. A typical result is network congestion.

So far, both characteristics are normally dealt with by reliance on the spare capacity of conventional power plants. This results in carbon emissions being reduced by less than what one might expect if one only considered RE power generation figures. Without an appropriate, intelligent network, RE electricity does not reach the consumers and cannot make the kind of difference the world needs.

Germany is a perfect example for the achievement of climate goals depending on an adequate transmission infrastructure. According to a recent study by Dena, the German Energy Agency, the country needs around 3,600 km of additional high voltage transmission in ten years. Otherwise, it will not be possible to use the huge off-shore wind farms that are currently being built in the Baltic Sea. This is an enormous challenge. In the past five years, Germany only managed to build 100 km of new high voltage lines. Of course, developing countries face the same challenge if they want to make serious use of RE.

Three options

There are basically three options for integrating weather-dependent RE into national grids. They are
– to increase the transmission capacities of the existing network without physically enhancing it,
– to expand and interconnect existing networks and finally
– to boost imbalance control and storage capacity.

Wherever the power scheduled to flow over a transmission line systematically exceeds that line’s capacity we have a case of structural congestion. This will typically occur when a large wind farm in a remote area comes online, for instance. The obvious first step is to increase capacity through technical and commercial management without physically enhancing the grid. Options for such congestion management include more efficient capacity allocation and more precise calculation of capacity. Such measures are not expensive, but their scope is quite limited.

Where structural network congestion persists in spite of sophisticated congestion management, transmission capacity can be expanded by adding physical capacity. This can be done by constructing new lines in existing systems or by building cross-border transmission lines (interconnectors). Linking formerly separate grids makes sense. The reason is that spare capacity in one grid can be used in the other and RE capacities are pooled. Even small capacity enhancements can lead to significant improvements for all interconnected partners.

Beyond transmission capacity, it makes sense to invest in imbalance management. It is crucial to minimise frictions between power generation (input into the grid) and power demand (output from the grid). If input and output deviate substantially only for a few seconds, the result will be blackout. A good network must thus make optimal use of all available power sources in a decentralised system. One implication is that it needs a lot of information and must process it well.

The greatest challenge of imbalance management, however, is that electricity can hardly be stored in economically attractive ways. It always necessitates the conversion of electricity into another form of energy and later the reconversion in electricity. In both steps, energy is lost. Moreover, many storage technologies are still in the early stages of their development and only available at very high costs.

At present, only pumped-water storage is applicable in reasonable terms of scale, economy and supply security. For the immediate provision of balancing energy at critical network nodes, the installation of highly flexible fossil-fuelled generation facilities can make sense. In some cases, mothballed and closed older power stations can be used, which would only generate power in moments of extreme need.


To move on from the fossil-fuel based energy systems of today to safer and more sustainable supply systems, the promotion of RE is a key element. However, the provision and construction of corresponding network infrastructure is just as important as RE power generation itself.

In particular, the cross-border interconnection of national power grids makes sense. This kind of infrastructure does not only bring economic and environmental benefits, it also serves regional integration and promotes peaceful cooperation.

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