power sector planning processes. The Integrated System Plan introduced in 2018 in Australia aims to better incorporate these aspects in overall system planning.

Integration of planning between the power sector and other economic sectors:

Integrated planning that spans the power sector and other sectors is a growing field, one which promotes broader energy system integration. Historically, planning across different sectors was thought to be relevant only for the electricity and gas sectors, since gas is one of the main fuels for electricity generation in many countries. More recently, continuing innovation in and uptake of demand-side technologies are having an impact on the power system. This is particularly the case for EVs. They can be used with smart charging strategies to support power system flexibility and facilitate VRE integration by recharging during periods of high VRE output and – ultimately – supplying to the grid when output declines. In the European Union, for example, network development plans for electricity and gas infrastructure were better integrated in 2018.

Broader interregional planning: Power system planning was traditionally confined to established single-utility balancing areas. However, with an increasing level of VRE deployment, expanding the size of balancing areas can potentially provide greater flexibility through resource diversification across different geographical regions. In addition, greater geographic diversification of generation sources leads to less variability in supply.

Including system flexibility assessments in long-term planning: While traditional approaches to power system planning have ensured that sufficient flexibility is available on the system to balance supply and demand, the emergence of VRE in 21st century power systems requires more careful consideration of power system flexibility in planning exercises. As the proportion of VRE increases in many markets and government deployment targets continue to evolve, recent experience has shown that it is good practice to accompany longer-term power system transformation goals with a long-term system flexibility strategy.

Incorporation of DER considerations in distribution network planning: When local grids are expected to integrate considerable amounts of DER, such as VRE, within the planning horizon of a distribution utility, additional and potentially more complicated distribution planning studies typically need to be completed. This is to ensure the continued safe, reliable and cost-effective operation of the interconnected distribution system.

International implications

Accelerated progress on power sector transformation could bring substantial benefits to China and the world. China’s power system is the largest national power system in the world; it accounted for one quarter of global electricity consumption in 2017 and its share is expected to rise to around 30% by 2035 in the NPS. Consequently, optimisation of the Chinese power system has immediate global effects, simply because by itself it accounts for such a substantial share.

An accelerated transformation of the Chinese power system could bring significant benefits in the drive to limit climate change in line with the Paris Agreement. As the modelling conducted for this study demonstrates, improved operations and advanced power system flexibility options can deliver substantial emissions savings while reducing overall system costs.

However, there could be further positive effects of an accelerated transformation of the Chinese power system. China is already a global leader in clean technologies. Chinese solar PV manufacturers have played and continue to play a vital role in the rapid decline of solar PV

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IEA. All rights reserved

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IEA. All rights reserved