Currently, grid connections of renewables are typically sized to handle peak generation output — although such peaks are rare and have limited market value due to simultaneity effects. Optimizing the grid connection capacity for renewables deployment can improve cost efficiency. These efficiency gains arise as a net effect of savings in distribution grid expansion and the value of electricity that must be curtailed due to overplanting.
The short study „Optimized grid connections for wind and PV: How grid expansion costs can be saved via reduced grid connection capacity“, conducted by experts at the Institute of Energy Economics (EWI) at the University of Cologne, shows how efficiency gains from overplanting renewables grid connections depend on the estimated grid expansion costs attributed to renewables.
When grid connections for ground-mounted PV and onshore wind are optimized separately, annual savings of around €0.8 billion can be achieved — yielding overplanting levels of approximately 360% for PV and 50% for wind. Here, overplanting refers to the extent to which the peak feed-in of the renewable system exceeds its grid connection capacity. When the grid connection capacity for PV and wind is optimized jointly (co-location), savings can even reach €1.6 billion per year, due to complementary generation profiles that reduce curtailment. Co-location with battery storage slightly lowers curtailment further and leads to additional grid cost savings. “Efficiency gains are accompanied by distributional effects,” says Berit Hanna Czock, project lead at EWI and co-author of the study, alongside Merit Dressler, Julian Keutz, Lisa Restel, Prof. Dr. Oliver Ruhnau, and Dr. Philip Schnaars. “Operators of renewable systems — particularly PV — lose some revenue, while consumers benefit from reduced grid expansion costs and lower network charges”, she explains.
So far, renewable-driven grid expansion costs in €/kW remain unknown due to insufficient data. However, distribution grids in Germany vary widely with respect to regional structure, load density, installed renewables capacity, and expected renewables growth. Therefore, region-specific renewable-driven grid expansion costs must be assumed. To estimate these, the study evaluates current distribution grid expansion plans and identifies three different grid area classes. Results show that renewable-driven grid expansion costs range from €61/kW in load-intensive regions to €180/kW in renewable-intensive regions.
“When grid connections are optimized based on these costs, significant overplanting of PV connections and modest overplanting of wind connections proves robust across different regional conditions,” Czock explains.
Further analysis is needed to assess system and distributional impacts — for instance, within the framework of Germany’s Renewable Energy Sources Act (EEG) — and to explore options for regional governance mechanisms. The optimization of RE grid connections could be implemented through administrative regulations on connection capacity sizing or via financial incentives, such as the internalization of grid expansion costs into investment decisions.
