Flexible Demand and Its Impacts on Future Utility-Scale Photovoltaic Integration and Generation Costs: Case Study on the Italian Energy Transition

Abstract

The energy transition implies an increase in electrical demand, which shall be met primarily by renewable energy sources, potentially raising costs for the system and the community. However, increasing consumption flexibility has the potential to reduce these additional costs by minimizing the risk of curtailment and reducing the need for new storage and grid line capacity. Few studies have been conducted to examine the techno-economic implications of improving consumption flexibility from an energy system perspective, but none have determined how these gains may affect future solar power integration costs. In this study, it is aimed to fill the gap by assessing the economic effects of flexible demand on solar integration and generation costs. Different scenarios for 2030 and 2040 of the Italian energy system are investigated taking into account future flexible demand availability and geographical distribution. In the results, it is shown that enabling a 12 h flexible demand can lower powerline transport capacity by up to 14%, and storage capacity by up to 25% in the 2040 scenarios. This corresponds to a reduction in photovoltaic (PV) generation costs from 11 to 13% by lowering overall PV integration costs, with peaks of up to 20% in some cases.