System costs of renewable energy

System costs

Wind- and solar-based power generation fluctuates, is subject to forecast errors, and requires grid expansion. The related costs are called “system costs” or “integration costs”. Up to 10% renewables market share, system costs are small – or even negative (renewables then save system costs). At high market shares, however, they can reach 20-35 €/MWh.


The integration of wind and solar power into electricity systems and markets is one of the core competences of Neon. We have finalized studies for Agora Energiewende (Berlin) and the International Energy Agency (Paris). Two peer-reviewed studies assess the very nature of system costs (2013 and 2015). Two further studies discuss a closely related issue, the market value of wind and solar power.

An analytical framework