The first point requires regulatory validation of the measuring standard for the maximum potential output, as well as a process to retrospectively validate the actual delivery of the requested downward or upward regulation.

Regarding the incentive to switch to fully flexible mode, this will depend greatly on the revenue risk exposure embedded in the plant’s FIT, as well as whether producers receive compensation for curtailed output in instances such as grid constraint. In this particular case, however, it is not a concern as VRE generation does not receive compensation for curtailed output. Furthermore, the installation of automatic control units requires the installation of the right type of inverter and fibre-optic networking to manage operations accurately. Enabling such operations only makes sense for new installations, such that AGC requirements and remuneration that encourages flexibility could be implemented only for new projects.

Source: Energy and Environmental Economics, Inc. (2018), Investigating the Economic Value of Flexible Solar Power Plant Operation, www.ethree.com/wp-content/uploads/2018/10/Investigating-the-Economic-Value-of-Flexible-Solar-Power-Plant-Operation.pdf.

Increasing need for advanced grid solutions

Grid infrastructure is the only flexible resource that brings a double benefit. First, it reduces flexibility requirements by smoothing VRE output over large geographical areas. Indeed, aggregation of several wind and solar PV plants over large areas effectively eliminates their short-term fluctuations. Second, it links together different flexible resources, allowing them to be pooled more efficiently and effectively. Hence, the cost-optimal amount of grid infrastructure tends to increase with growing shares of VRE on the system.

Expansion of grid infrastructure generally takes longer than constructing new VRE plants. While construction times vary substantially depending on regulatory regimes and public support/opposition, it can take between 5 years and over 20 years to build new transmission lines, while VRE projects can be developed in 3–5 years in the case of complex permitting environments, and only a few months where permitting is streamlined. Hence, grid infrastructure will tend to trail behind VRE generation (although planning tools exist to mitigate this challenge, see section on planning in the following chapter).

Deploying advanced grid solutions

Typically, a transmission line is rated to carry power at a certain capacity. The capacity of a line is usually constrained by line sag, which happens due to current-related temperature increase. The conventional approach to determining the capacity of transmission lines is based on worstcase assumptions (low wind speed, high ambient temperature, high solar radiation) (IEA, 2014). The line capacity determined under this assumption would then be used across a range of actual conditions. However, the actual ability of a line to carry power is influenced by temperature: at lower temperatures, the real capacity of the line is likely to be higher than the rating (IEA, 2017a).

Dynamic line rating (DLR) is one of the tools available to enhance available transmission capacity without the need to construct new lines. DLR calculates the capacity of transmission lines closer to real time by taking into account actual operating and ambient conditions instead of assuming a fixed capacity (IEA, 2017a). With DLR, system operators can make use of additional capacity when available and thus reduce the need for network investment.

At times of high winds and, in some cases, high levels of solar power generation, DLR can be an effective option to alleviate transmission congestion and thus reduce the risk of curtailment. DLR has been implemented to great effect in many systems including, for example, Spain, the

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