IEA report highlights need for policy action to improve power system flexibility

The rapid growth of renewable energy in recent years has been remarkable. Solar PV in particular has seen record growth last year and is on track to meet long term climate goals at this rate of deployment. Decreasing costs for both wind and solar energy, and strong government policy support have contributed to this impressive success story.

These renewable power sources also come with a new set of challenges not faced before by power plants, utilities and system operators. The main one is the variability of renewable generation: how to ensure continuous and stable power when the wind is not blowing or when the sun isn’t shining. This creates uncertainties for the security of electricity supply.

The challenge of integrating variable renewable energy (VRE) in daily operations is compounded by other developments, such as the deployment of decentralised energy sources like rooftop solar and smart loads such as electric vehicles, and the spread of digitalization. Faced with such transformations, policy-makers and other power-sector stakeholders need a co-ordinated and proactive response to managing these market changes and ensuring electricity security in modern power systems.

Improving power system flexibility, can facilitate reliable and cost-effective management of variability and uncertainty in both supply and demand, according to a new edition of the IEA’s Status of Power System Transformation Report, produced in collaboration with the United States’ National Energy Renewable Energy Laboratory (NREL). The report includes several in-depth country case studies from China, Denmark, Germany and India with examples of enhancing power plant flexibility strategies to successfully integrate increasing shares of variable renewables

The new report was launched at a side-event during the 9th Clean Energy Ministerial in Denmark to present the results of the Advanced Power Plant Flexibility Campaign, a CEM initiative co-led by China, Denmark and Germany and supported by 11 more CEM members and 14 non-government partners.

The main findings of the report build on the experiences made by APPF partners – plant operators, manufacturers and system operators – and aims to provide a comprehensive overview of how power plants can contribute to making power systems more flexible. This ranges from modifications in the operation of existing power plants to adding new generators to the grid that provide additional, system-appropriate flexibility capabilities.

Crucially, the report highlights that significant new capital investments are not necessarily required to operate power plants more flexibly. Indeed, low-cost improvements can easily be achieved by changes to operational practices for existing power plants, like better monitoring and control equipment.

Flexibility of power plants can also be improved by a range of retrofit options or state-of-the-art flexible power plant technologies, several of which are described in the report.

To be sure, what might work best for the power system may not always be beneficial for individual power plants, which may have been built to operate around the clock. Under these circumstances, public policy can be an important tool to help “bridge the gap” between what the system requires for cost-efficient operation and what individual power plants require for maintaining profitability under a flexible operating environment. 

Several options exist, including policy, market and regulatory instruments. The report offers guidance and a step-by-step guide on how countries can roll-out a strategy for enhancing flexibility.

Flexible power plants are of course not the only option available to increase system flexibility. Strong and smart grids, a more responsive demand side and increasing cost-effective storage can also contribute substantially to embedding flexibility in modern power systems. However, improving the way existing plants are operated and making a set of low-cost retrofits can give a rapid flexibility boost, reducing the risk of spilling clean wind and solar production.

In the coming year, the Advanced Power Plant Flexibility Campaign will continue its work with a broader scope to encompass Power System Flexibility. The continuation of the campaign was also announced at the CEM9, to provide a platform for industry and policy makers to discuss flexibility through the lens of increased digitalization and evolving market structures.

For more information about the campaign and membership, please contact the IEA’s System Integration of Renewables Unit at or visit the campaign website.