Wind-solar technological, spatial and temporal complementarities in Europe

Abstract

Climate change and geopolitical risks call for the rapid transformation of electricity systems worldwide, with Europe at the forefront. Wind and solar are the lowest cost, lowest risk, and cleanest energy sources, but their variability poses integration challenges. Combining both technologies and integrating regions with dissimilar generation patterns optimizes the trade-off between maximizing energy output and minimizing its variability, which respectively give the lowest levelized cost and lowest integration cost. We apply the Markowitz mean-variance framework to a rich multi-decade dataset of wind and solar productivity to quantify the potential benefits of spatially integration of renewables across European countries at hourly, daily and monthly timescales. We find that optimal cross-country coordination of wind and solar capacities across Europe's integrated electricity system increases capacity factor by 22% while reducing hourly variability by 26%. We show limited benefits to solar integration due to consistent output profiles across Europe. Greater wind integration yields larger benefits due to the diversity of regional weather patterns. This framework shows the importance of considering renewable projects not in isolation, but as interconnected parts of a pan-continental system. Our results can guide policymakers towards strategic energy plans that reduce system-wide costs of renewable electricity, accelerating the clean energy transition.