Energy systems integration is the removal or reduction of many of the technical, physical, organisational and legal barriers to high penetration of renewable energy – including in power grids, heating and cooling systems, and transport fuelling systems. Integration includes the planning, design and implementation of supply- and demand-side technologies, infrastructure, markets and regulatory frameworks to facilitate greater use of renewables across all end-use sectors, while ensuring sustainable, secure, adequate, reliable and affordable energy services.

Renewable energy can facilitate more efficient, sustainable and economical operation of energy systems.1 To achieve this, governments, energy utilities and other actors are working to address barriers that may slow or halt the growth of renewables.2 As shares of renewable energy grow, energy systems that have evolved or been designed around conventional energy sources may require multifaceted restructuring to ensure that the benefits of renewables are fully realised.3

As such, growth in renewable energy is transforming energy systems around the world.4 In the power sector in particular, rapid growth in the installed capacity and penetration of variable renewable electricity (VRE) sources – such as solar photovoltaic (PV) and wind poweri – has occurred in many countries.5 At the end of 2019, renewables produced an estimated 27.3% of global electricity generation, 8.7% of which was from VRE.6 The penetration of modern renewables in the heating, cooling and transport sectors is much lower than in the power sector, however.7 ( See Global Overview chapter.)

Solar PV and wind power provided


of global electricity in 2019, up from around 7.9% in 2018.

Many of the notable advances in renewable energy integration in 2019 involved increased uptake of VRE in power systems and the use of VRE to electrify end-uses in transport, heating and cooling. These advances occurred mainly in countries or regions that have supportive policy environments or where energy markets are adapting to the uptake of VRE, including in Australia, China, Europe and North America. ( See Policy Landscape chapter.)

Several technologies are supporting the integration of renewables by enabling greater flexibility in energy systems or by promoting the linking of energy supply and demand across electricity, thermal and transport applications. Among the more mature or commercialised technologies are heat pumps, electric vehicles (EVs) and certain types of energy storage. Other technologies are still emerging but may help to reach higher shares of renewable energy in all sectors – including renewable hydrogen, non-lithium-ion batteries (such as flow batteries) and novel forms of mechanical storage.8


iDefined more broadly, VRE also can include some forms of ocean power and hydropower. This chapter focuses mainly on solar PV and wind power, as these are the fastest growing VRE markets and are having the greatest impacts on energy systems. See Glossary for an extended definition of VRE.i


Market Design for Flexibility

Increased Flexibility from Generation, Demand and Storage

Improved Forecasting of Variable Renewable Electricity Generation

Infrastructural Linkages


Heat Pumps

Heat Pump Markets

Heat Pump Industry

Electric Vehicles

Electric Vehicle Markets

Electric Vehicle Industry


Energy Storage Markets

Energy Storage Industry