3 Ways Wind and Solar Can Continue To Grow In a 21st-Century Grid

The briefing challenges the notion that variable renewables will limit their own growth by depressing wholesale electricity prices. It contends that these concerns rely on static models of the grid and ignore the synergistic effects of complementary supply resources, flexible demand-side responses, and the decreasing cost of storage. By shifting from incremental to whole-system thinking and updating 20th-century market designs, the author asserts that wind and solar can continue to expand without facing practical economic limits.

• Critics of renewable energy growth argue that variable renewables create excess supply during specific production times, leading to a 'merit order effect' where a glut of power lowers wholesale market prices and reduces profits for both fossil fuel generators and the renewables themselves.
• The 'duck curve'—a daily demand curve modeled for California's grid—illustrates the mismatch between solar PV generation patterns and load, which some analysts suggest creates an upper limit to renewable adoption in the U.S. grid.
• Supply-side evolution can mitigate integration issues because solar PV, wind, and dispatchable natural gas are entering the supply mix simultaneously, while the retirement of uneconomic, high-cost thermal plants can provide buoyancy to wholesale prices.
• Demand-side flexibility, enabled by time-varying pricing and flexible appliances like electric vehicles and water heaters, allows consumers to shift usage to periods of high renewable production, which supports higher prices for renewables and lowers peak prices.
• Energy storage transforms variable renewables into dispatchable resources, reducing the merit order effect; this is evidenced by Chilean auctions where nighttime solar power via storage was bid at $97/MWh.
• Existing wholesale power markets are based on outdated 20th-century paradigms; updating these designs to incorporate flexible loads and behind-the-meter distributed energy resources, as seen in New York and California, can align incentives for least-cost resource mixes.

APA

RMI (2015). 3 Ways Wind and Solar Can Continue To Grow In a 21st-Century Grid. https://rmi.org/resources/3-ways-wind-solar-can-continue-grow-21st-century-grid/

Chicago

RMI. 3 Ways Wind and Solar Can Continue To Grow In a 21st-Century Grid. 2015. https://rmi.org/resources/3-ways-wind-solar-can-continue-grow-21st-century-grid/.

Wikipedia

{{cite report |author=RMI |title=3 Ways Wind and Solar Can Continue To Grow In a 21st-Century Grid |date=30 November 2015 |url=https://rmi.org/resources/3-ways-wind-solar-can-continue-grow-21st-century-grid/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2015ways, author = {{RMI}}, title = {{3 Ways Wind and Solar Can Continue To Grow In a 21st-Century Grid}}, institution = {RMI}, year = {2015}, month = nov, url = {https://rmi.org/resources/3-ways-wind-solar-can-continue-grow-21st-century-grid/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }