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Solving Renewable Energy’s Biggest Problem: Grid Flexibility and System Resilience

Jan



The global energy transition is accelerating at a remarkable pace. Solar and wind power have become some of the most cost-effective energy sources in history, and countries worldwide are ramping up deployment to decarbonise their energy systems. Yet, despite this progress, a critical challenge threatens to undermine these efforts: grid flexibility.

As more variable renewable energy sources (VREs) like solar and wind are integrated into the power grid, maintaining stability and reliability becomes increasingly complex. Traditional grids, originally designed for consistent, dispatchable power from fossil fuels and nuclear plants, are struggling to adapt to the intermittent nature of renewables. Without strategic investments in grid-balancing technologies and flexible infrastructure, the risk of energy curtailment, price volatility, and even blackouts grows.

In a recent episode of the Climate Confident podcast, I had the opportunity to speak with Anders Lindberg, President of Wärtsilä Energy, about this very issue. Wärtsilä has conducted system modelling in over 200 markets globally, revealing that without addressing grid flexibility, the cost of transitioning to renewables can skyrocket. For example, in Chile, the difference between a system relying solely on renewables and batteries versus one that incorporates flexible engine power plants is a staggering $17 billion. This insight is not just about economics; it’s about designing energy systems that are secure, sustainable, and resilient.

Climate Confident podcast screenshot

But why exactly is grid flexibility so critical, and what can be done to solve this growing challenge?

The Inflexibility Problem

Power grids have historically relied on large, centralised fossil fuel plants—coal, gas, and nuclear—that can produce steady, controllable amounts of electricity. In contrast, renewables like wind and solar are variable by nature. As is often said, "the sun doesn’t always shine, and the wind doesn’t always blow" (actually, the sun does always shine, and the wind does always blow, maybe just not where you need them!). This variability leads to periods where renewable generation outpaces demand, resulting in curtailment—turning off renewable capacity to avoid overloading the grid. And it is the renewables that are curtailed, because they are easier to turn off than large thermal power plants.

Curtailment is not only wasteful but also economically damaging. Developers and investors hesitate to fund new wind or solar projects if there’s a high risk their output (and therefore the developer's return on investment) will be curtailed. It also slows down decarbonisation efforts, as inflexible coal and gas plants are often kept running to maintain grid stability. Worse still, keeping these plants online means continued emissions and fossil fuel consumption.

A case in point is California, where up until very recently solar curtailment had been rising due to inflexible grid infrastructure. According to the California Independent System Operator (CAISO), solar curtailment reached record highs in recent years, particularly during the spring when solar output peaks and demand is low. Without adequate storage or flexible backup, this surplus energy goes unused, delaying the state’s renewable energy goals.

Why Batteries Alone Aren’t Enough

Battery storage is often touted as the solution to renewable variability, and it certainly plays a vital role. Technologies like lithium-ion batteries can respond in milliseconds to grid imbalances, stabilising short-term fluctuations. However, batteries typically excel at managing seconds to hours of supply-demand mismatches—not days, weeks, or seasonal shifts.

Take Texas, for example. The state has made significant investments in wind and solar, but during Winter Storm Uri in February 2021, the grid faced catastrophic failures. Energy demand spiked due to record-low temperatures, while natural gas infrastructure and wind turbines that hadn't been properly weatherised, froze. Texas' grid, largely isolated from neighbouring states, lacked the resilience and flexibility to manage the crisis, leading to widespread outages and tragic consequences.

This event highlights that for now battery storage alone can’t safeguard against prolonged or large-scale disruptions. With current battery technology what’s also needed is a combination of flexible, dispatchable generation sources that can scale up or down based on demand.

The Role of Flexible Engine Power Plants

Anders emphasised in our discussion that Wärtsilä’s flexible engine power plants offer an effective solution to this challenge. These engines can ramp up and down in minutes—far faster than traditional coal or nuclear plants—and can run for hours, days, or even weeks when needed. Currently, many of these engines run on natural gas (methane), but they are designed to transition to sustainable fuels like green hydrogen and sustainable synthetic fuels as they become commercially viable.

Flexible engines serve as the “yeast in the bread,” as Anders aptly put it—a small but essential ingredient that enables the entire system to function smoothly. By complementing battery storage and renewables, they provide the medium- and long-term flexibility grids need to stay balanced and resilient.

Markets like South Australia and Texas are already recognising the importance of flexibility. South Australia, for instance, has integrated large-scale batteries and flexible gas generation to balance its high penetration of wind and solar. Similarly, Texas has started investing in flexible capacity, aided by regulatory frameworks like nodal pricing and the Texas Energy Fund, which incentivise providers to supply energy during peak demand.

Green Hydrogen: The Long-Term Solution?

Much has been said about green hydrogen as the future of clean, dispatchable power. Hydrogen produced through electrolysis using renewable energy could, in theory, power grid-balancing engines with zero emissions. However, Anders Lindberg cautions that green hydrogen is unlikely to scale significantly until 2035–2040. And, generating green hydrogen is an inefficient process that should only be used when there is an excess of renewable energy (instead of curtailment, for example).

Currently, over 95% of hydrogen production is “grey hydrogen,” created from fossil fuels with substantial carbon emissions. The infrastructure for producing, storing, and distributing green hydrogen is still in its infancy. In the meantime, relying on flexible natural gas engines—with the ability to convert to green fuels later—may be the most pragmatic approach.

Policy and Market Incentives Are Essential

Addressing grid flexibility isn’t just about technology—it’s also about creating the right market conditions. Traditional energy markets reward generators for producing as many megawatt-hours as possible. However, flexible assets like balancing engines may only operate for a few hundred hours a year, making them economically unviable without proper incentives.

Texas offers a blueprint for how markets can evolve. By allowing energy prices to reflect real-time supply and demand (nodal pricing), the state incentivises flexible generation to step in when needed. Additionally, capacity markets in regions like the UK ensure that operators are compensated for maintaining reserve capacity, not just energy produced.

Globally, policymakers need to rethink market design to reward flexibility, resilience, and emissions reductions—not just raw output.

Building a Future-Proof Energy System

Balancing grids in a renewable-heavy world is one of the most complex engineering and policy challenges we face. It requires a careful blend of technologies—short-term solutions like batteries, medium-term solutions like flexible engine power plants, and long-term solutions like green hydrogen. It also demands regulatory innovation to ensure that these technologies are financially viable.

Ignoring grid flexibility could slow or even derail the energy transition. But by investing in the right infrastructure today, we can create power systems that are not only cleaner but also more reliable and cost-effective.

If you're interested in learning more about how grid flexibility can accelerate decarbonisation while maintaining energy security, I highly encourage you to listen to my full conversation with Anders Lindberg on the Climate Confidentpodcast.

Let’s continue this vital conversation—because a sustainable energy future depends on more than just renewables; it depends on building systems that can support them.


This post was originally posted on TomRaftery.com
Photo credit sea turtle on Flickr.

By Tom Raftery

Keywords: Climate Change, Renewable Energy, Sustainability

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