TransnetBW: Current grid development plan underestimates fluctuations in renewable generation

Europe must strengthen its transmission interconnections, invest in flexible resources and account for the impacts of extreme weather. These are the findings of a study prepared by German transmission system operator TransnetBW in collaboration with experts from across Europe. The study also highlights the key role of so-called prosumers and the need for realistic planning assumptions.

One of the study’s main conclusions is that energy system planning can no longer be based solely on average weather conditions. Generation from wind farms can vary by as much as 15% from one year to the next compared with the historical norm, while for solar power plants the deviation can be up to 5%. This has a major impact on the generation balance, the study says.

These fluctuations are also set to increase as the share of renewables grows. The study shows that under extreme climate conditions, current NEP projections may underestimate infrastructure and flexibility needs.

So-called stress scenarios are a key part of the analysis. They simulate, for example, years with low renewable generation across Europe, exceptionally cold winters or prolonged heatwaves. In one of these scenarios, Germany could face an electricity shortfall of up to 508 GWh a year and 40 hours of insufficient load coverage. In that case, the wholesale price of electricity could more than double, from €69/MWh to €136/MWh, highlighting the economic impact of a system’s lack of resilience.

The study identifies the development of further interconnections between European transmission systems as a key way to increase system flexibility and reduce costs. Increasing cross-border interconnection capacity could cut annual system costs by up to €18 billion across Europe. Better interconnection also reduces the need for national flexibility measures, thanks to differences in regional climate conditions.

Prosumers—consumers who not only use electricity but also generate it themselves—also play an important role. The study found that current planning assumes the idealised integration of prosumers, including electric vehicles, decentralised heating and home batteries. If, for example, only 50% of prosumers responded to market signals, the system would require a significant increase in installed generation capacity.

In Germany, this would mean a need for at least 9 GW of additional hydrogen-fired power plants. A lack of decentralised flexibility could increase system costs by €11 billion a year across Europe.

Flexibility must also be provided both by decentralised technologies, such as batteries or heat pumps, which are effective at providing short-term flexibility, and by centralised solutions, such as hydrogen-fired power plants and large-scale storage. The latter would instead contribute to the system’s seasonal resilience.

The study shows that achieving climate neutrality requires more than ambitious targets: it calls for realistic, proactive planning based on data, flexible infrastructure and stronger European cooperation.

Study objectives and methodology

The “Adequacy 2050” study provides a detailed analysis of the long-term adequacy of the electricity system in a climate-neutral Europe, with a particular focus on Germany. It was commissioned to test the resilience of Germany’s Network Development Plan (Netzentwicklungsplan, NEP) to uncertainties caused by climate change, increasing electrification and changing consumer behaviour. The study brings together the perspectives of available generation resources and transmission capacity in a single analytical framework.

The AQ2050 modelling approach uses a linked chain of three models: for the energy system, market operations and the transmission grid. This comprehensive approach makes it possible to simulate investment needs and operational risks, as well as identify critical points in the grid. Despite some limitations, the study offers valuable insights for policymakers, investors and network operators.