Introduction

Both the UK and Germany have the declared goal to cut carbon emissions by 80% by 2050 compared to 1990 levels, which requires near-total decarbonisation of the electricity sector. While nuclear and carbon capture and storage (CCS) are plausible low carbon alternatives in the UK, public and political opinion limit Germany’s options to renewable energy sources (RES). Renewable generation has grown dramatically in both countries. Since 2015 29% of Germany’s electricity was renewable, as was 24.5% of Britain’s [1,2]. The German government aims to source at least 50% of electricity from RES by 2030 [3], and similarly a 45–۵۵% share is needed to meet the UK’s Carbon Budget for 2030 [4]. The EU targets at least 27% RES share in total final energy consumption by 2030 [5], which studies suggest would correspond to an electricity share of around 45–۵۵% depending on modelling assumptions [6–۸]. The majority of new RES will come from wind and solar [9], since alternatives like hydro and bioenergy are constrained by limited resource and higher cost. Wind and solar are variable renewable energy (VRE) sources: their output depends on weather conditions and so can be forecasted but not fully controlled as can thermal plant. To offset deviations between forecast and actual wind and solar output reserves must be held and operated [10]. VRE capacity has grown significantly in recent years. Combined wind (onshore and offshore) and solar capacity in the UK1 grew from 5.46 GW in 2010 to 27.25 GW at the end of 2016 [1], while capacity in Germany increased from 44.84 GW to 90.81 GW [11]. Fig. 1 shows the rise in capacity and penetration. The cost of wind and solar has declined substantially in the last decade, such that the levelised cost of electricity (LCOE) for onshore wind and large solar is now lower than gas and nuclear [12–۱۴]. However, LCOE does not tell the whole story: To accommodate VRE output while enforcing high standards for security of supply, costs are incurred in other parts of the system, mainly for holding and operating reserve and back up plants to manage variability and uncertainty of VRE output. These are so-called system integration costs. Several studies conclude that electricity systems with high shares of renewable energy (up to 100%) are feasible in industrialised economies without a reduction of security of supply standards [15–۱۷]. Grids have maintained or even increased their reliability during significant increase of VRE penetration (the ‘System Average Interruption Duration Index’ in Germany went from 18.67 min in 2006 to 10.45 min in 2015) [18,19]. However, decarbonising the electricity sector must be conducted cost-efficiently and would lose public acceptance if it led to a substantial increase of power prices for industry, businesses and residents. Numerous studies exist on integration costs, mostly based on modelling (e.g. [20–۲۳]). These concur that increasing VRE penetration will lead to increased system operation costs, which could hinder the political feasibility of highly or completely renewable electricity systems. However, the already significant penetration of VRE in Britain and Germany offer an opportunity to study the impacts that VRE integration is actually having on two major industrialised economies based on real market data.