Firm Photovoltaic Power Generation: Overview and Economic Outlook

Abstract

Grid‐connected photovoltaic electricity production steadily grows at the margin of conventional power generation, but its management becomes more complex. To overcome this challenge, a transformation of variable renewable energy (VRE) resources into firm power generation is proposed. Drawing on insights from the International Energy Agency Photovoltaic Power System Task 16 case studies, it becomes evident that achieving nearly 100% VRE power grids that reliably meet demand year‐round can be economically viable through optimal VRE transformation. This transformation involves various traditional methods, e.g., storage, VRE blending, geographical dispersion, and load flexibility. However, overbuilding VRE capacity and controlled curtailment, acting as implicit energy storage, are now seen as essential prerequisites for this transformation. Nevertheless, aligning this vision with the current market rules poses a dilemma as it doesn't necessarily align with VRE producers’ interests. This predicament calls for a reconsideration of VRE market regulations. Current designs based on marginal energy production signals do not suffice. Instead, it is advocated for market rules grounded in the capacity of firmly enabled VREs rather than their energy output. Ultimately, the economic model should harmonize with the variability of VRE resources, rather than forcing VRE resources to adapt to existing market structures.