The IEA has conducted a number of quantitative studies on system integration of renewables to assess the impact and value of flexibility options to support policy recommendations.

China Power System Transformation presents findings from a detailed power sector analysis for China in 2035. The study identifies the establishment of spot markets and regional trade as two of the main elements to improve system operation efficiency in China. Activating the demand side – especially electric vehicles with smart charging – and electricity storage are found to be crucial for an accelerated transformation of the Chinese power system.

The study explored the impact of continuing the practice of limited regional co-ordination in China in 2035, based on the IEA’s New Policies Scenario. Currently, inter-regional trade is constrained by a number of factors, including limited joint governance over the operation of provincial systems and the economic interests of individual provinces to use their own generation as opposed to importing from other regions.

Modelling results from the study show that removing existing barriers to inter-regional co‑ordination and power trading in China would result in an annual operational cost savings of $3.5 per megawatt hour, which is equivalent to $9 billion in total per year. This cost reduction is largely driven by displacement of coal consumption by electricity generated from VRE. Annual CO2 emissions would also be reduced by almost 500 million tonnes per year due to reduced coal-fired generation.

China's annual power system operational CO2 emissions, 2035


China’s annual power system operational costs, 2035


The 2018 WEO presented a picture of India’s power system in 2040 under the IEA’s New Policies Scenario (NPS). The analysis showed that electrification targets and affordability of supply will play a key role in reshaping India’s power system going to 2040, with VRE playing an increasingly prominent role – in particular solar PV which is projected to become the main electricity source, by installed capacity, at 450 GW by 2040.

Increasing VRE penetration also implies increased flexibility requirements, which will need to be provided by all system resources. Given their dominance, coal-fired power plants will play a critical role in power system flexibility. However, demand side response and storage will also play a key role in enabling the country’s long term decarbonisation and energy access targets. The NPS shows that without storage or demand response, wind and solar output are set to exceed demand by up to 60 GW during some hours in 2040.

Demand side response reduces this to only 6 GW, while storage deployment eliminates all surplus hours. With full flexibility deployment, VRE curtailment due to specific generation constraints (such as must-run generation) falls to 5 TWh, meaning that upwards from 99% of VRE output can be utilised. 

The primary objectives of the Thailand Renewable Grid integration Assessment project are to support the reliable and cost-effective uptake of renewable generation in Thailand by identifying integration challenges and possible mitigation options. The study undertakes a comprehensive analysis covering the technical, economic, policy and regulatory frameworks.

The analysis comprises 1) the existing VRE penetration context in Thailand, 2) grid integration of VRE in Thailand’s future power system, 3) the technical potential and economic impact of distributed solar PV on stakeholders, and 4) the power sector planning process and system costs.

The study provides recommendations to guide decision making in power sector operation and planning, investment, and policy to support the uptake of VRE in a reliable and cost-effective manner in order to achieve the objectives of Thailand’s power sector policies. The study tested a set of flexibility options including: power plant flexibility improvements, contractual flexibility in power purchase agreement (PPA) and gas purchase contracts and smart charging of electric vehicles.

The study’s main finding is that a combination of these options led to operation savings of up to 15% in relation to the scenario with the highest VRE penetration and no flexibility options.

Thailand VRE generation, load and net load profiles during a high-demand period


The ASEAN RE Integration Study is the first phase of a quantitative assessment of the impact of cross-border interconnection and multilateral trade amongst ASEAN member countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore) on the integration of variable renewables.

The assessment focused on future scenarios for the region in 2035, analysing the impact of increased cross-border interconnection and multilateral trade on the accommodation of variable renewables. The results of the assessment showed that with current VRE projections from the 5th ASEAN Energy Outlook (approximately 10% VRE generation in 2035), enabling multilateral trade on all existing/planned interconnectors and thereafter expansion of the network reduces operational costs but, in the absence of externality costs, increases emissions as it allows more stable operation and exports of coal-fired generation. However, when increasing the VRE share to align with projections from the IEA’s Sustainable Development Scenario (approximately 25% VRE generation in 2035), the full benefit of interconnectors and multilateral power trade can be unlocked, in that it decreases both costs and emissions by enabling higher shares of VRE to be accommodated without excessive curtailment.

Annual operational costs and emissions by illustrative scenarios and case in ASEAN countries, 2035