*2.4. Solutions for System Reliability*

Before discussing whether and how renewable energy sources can alleviate system reliability issues, it is imperative to consider current measures and those deemed effective in the future. In this section, we draw our attention to storage, sector coupling, and regulatory solutions to support energy system reliability.

Storage solutions introduce flexibility to energy systems and allow for higher shares of renewable energy and, thus, contribute to both system reliability and decarbonization [37,38]. Pumped storage hydro (PSH) is currently dominating the global energy storage market (with a share of about 94% of the installed energy storage capacity and over 99% of the energy stored [39]), which is a commercially mature technology with 160 GW of installed capacity and 9000 GWh in energy storage capacity worldwide [37]. Other storage solutions with considerable use worldwide include thermal storage (mainly molten salt thermal storage), electro-chemical storage (batteries and electro-chemical capacitors), and mechanical storage technologies (compressed air storage and flywheel). The produc-

tion of electro–chemical storage (batteries) is one of the most rapidly growing industries nowadays [38], although battery capacities accounted for only 17 GW globally in 2020 (5 GW of storage capacity was added only in 2020) [40]. Currently, the most commercially available battery storage technologies include lithium–ion iron phosphate (LFP) batteries, lithium–ion nickel manganese cobalt (NMC) batteries, lead–acid batteries, and vanadium redox flow batteries (RFBs) [41], with lithium–ion batteries being most widely used (accounting for 93% of the global battery storage capacity in 2020 [40]). Benefitting from the economic scale of lithium–ion battery production for transport applications, the cost of stationary lithium–ion batteries is expected to decrease by 54–61% by 2030 to about 145–480 USD/kWh depending on the battery chemistry, while the number of full cycles may grow by 90%, according to IRENA projections [38].

Sector coupling broadly refers to integrating different energy sectors in order to achieve more flexibility in the energy system and allows for higher shares of intermittent renewable energy sources [42]. The classical example often studied in the academic literature is deeming wide-spread electric vehicle usage as a storage capacity for solar power [43]. However, the sector coupling concept is broader and can include even information systems for better balancing and control of cross-sectoral energy flows [44].

While the technological progress offers promising prospects in the future, its current state is not sufficient to fully resolve energy system reliability issues. Therefore, governments around the world have been introducing regulatory measures to support the security of electricity supply [5]. Five countries in the world maintain strategic reserve (selected power plants that are kept away from the market and switched on in scarcity conditions), eight countries implemented capacity payments (similar to strategic reserves but power plants operate on the regular market as well), and sixteen jurisdictions operate some kind of capacity markets (arranged in parallel with electricity market and open to the majority or all of market participants) [7]. Capacity mechanisms are only 'useful' for a power capacity that can actually contribute to electricity generation. Approaches to calculating this contribution vary, and some of them are covered in Section 2.2.

With or without a capacity mechanism, we argue that a different approach to support for renewable energy sources can substantially alleviate the burden of intermittent electricity generation on energy system reliability.
