The economic competitiveness of different electricity generation technologies is generally assessed on the basis of their LCOE (Levelised Cost of Energy). LCOE represents the total cost of electricity produced over the lifetime of the generating asset. While this indicator is widely used, it is of limited relevance when comparing non-dispatchable and intermittent electricity sources (notably wind and solar photovoltaic generation) with dispatchable sources (such as gas turbines, nuclear power, or hydropower), as these technologies do not provide equivalent services to the electricity system.
For example, the output of a gas turbine can be adjusted to match demand, whereas the production of one kilowatt-hour from a wind turbine is not always guaranteed (and can only be curtailed downward), as it depends on weather conditions. As a result, these kilowatt-hours have a different value for the power system, as they do not contribute in the same way to the balance between supply and demand. Indeed, an electricity system relying solely on non-dispatchable energy sources would not be able to ensure system balance in the face of variable demand without resorting to flexibility mechanisms (such as storage capacity or dispatchable generation).
While the challenge of balancing intermittent generation is currently limited in France, it will become critical by 2050 due to the expected high penetration of new renewable energy sources. The objective of our analysis is therefore twofold:
- First, to estimate the cost of flexibility for the electricity system by 2050, depending on the flexibility mechanisms deployed. To this end, we quantified the total system cost¹ (in €/MWh) of a fully decarbonised electricity system (with and without nuclear power) under different flexibility scenarios;
- Second, to estimate the “true total cost”¹ (in €/MWh) of non-dispatchable renewable generation technologies by allocating to them the costs of the flexibility mechanisms required to compensate for their intermittency (within the same scenario of a fully decarbonised electricity system by 2050).
Three flexibility mechanisms were therefore analysed²: two storage technologies (batteries and hydrogen), and one dispatchable renewable generation option (gas turbines fuelled by biomethane biomethane-to-power). The analysis of the results makes it possible to assess the role of “renewable gas” pathways biomethane and hydrogen in the electricity mix by 2050, whether as substitutes for intermittent renewable generation or as complementary solutions.
