**1. Introduction**

Striving to reduce their carbon footprints, governments worldwide have been introducing renewable energy policies to decarbonize power sectors. Even the COVID-19 pandemic has not slowed down the growth in the global renewable power capacity, reaching a record share of almost 30% of the global energy mix in 2020 [1]. However, such development poses challenges for energy systems. Electricity generation from many types of renewable energy sources is intermittent. However, the overall electricity supply should match the demand at every moment to avoid costly blackouts. Thus, the extensive deployment of renewable energy may threaten the reliability of energy systems. In response, various flexibility measures have been developed. They include storage technologies, such as batteries and hydrogen solutions (the latter possesses a potential for electricity transmission [2,3] and sector coupling with transportation [4]); demand-side management; smart grids; and regulatory measures to ensure reliability [5], so-called capacity mechanisms [6,7].

Recent extreme weather events have drawn the attention of policymakers and researchers towards the reliability of the power systems, with implications for widespread renewable energy adoption as well. Extreme weather events and weather variations affect both the energy demand and the reliability of energy systems. Numerous global cases of extreme weather events, such as heatwaves or severe winter storms, forced interruptions in the power generation, and even blackouts have been reported [8,9]. Perera et al. [10] estimated that future extreme weather events induced by climate change might lead to a

**Citation:** Kozlova, M.; Lohrmann, A. Steering Renewable Energy Investments in Favor of Energy System Reliability: A Call for a Hybrid Model. *Sustainability* **2021**, *13*, 13510. https://doi.org/10.3390/ su132413510

Academic Editor: Alberto-Jesus Perea-Moreno

Received: 4 November 2021 Accepted: 30 November 2021 Published: 7 December 2021

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drop in power supply reliability by up to 16%. Uncertainty in the power supply associated with weather variations may slow down the implementation of intermittent renewable energy technologies and may increase the dependence on fossil-based power generation. However, Perera et al. [10] demonstrated that further adoption of renewable energies is possible without compromising the resilience of energy supply systems if potential risks are appropriately quantified. In this regard, financial mechanisms, which promote the implementation of renewable energy while ensuring the energy system reliability, should be introduced. The idea of enabling market signals by channeling the system reliability needs in subsidies for renewable energy, advocated in the paper, was highlighted in previous studies as well [11].

Intermittent renewable energy is often mentioned as one of the causes of problems with energy system reliability in Europe [12]. Norway has the highest cost for maintaining electricity supply security in Europe partly because of their high share of small-scale intermittent hydrogeneration in the system [13]. In the academic literature, renewable energy sources are often treated as a threat to energy system reliability as well [14–16]. Such research normally inquires about what types of capacity mechanisms can better tackle the problem. For example, Bhafgwat et al. [15,16] ran simulations to determine what type of capacity mechanism would better protect against a high share of renewable energy sources. Lara-Arango et al. [14] came to the conclusion that no capacity mechanism can sufficiently tackle the issue because of the uncertainty in the electricity supply from renewable energy sources.

An emerging research direction reconsiders the adverse role of renewable energy sources for energy system reliability. Mastropietro et al. [17] demonstrated that some countries choose to include renewable energy sources into their capacity mechanisms because they do contribute to system reliability. In the same vein, Söder et al. [18] made an argument for including renewable energy power plants into capacity mechanisms. Peter and Wagner [19] showed that wind power generation in Europe is characterized by spatial and temporal heterogeneity. Thus, if wind farms are built in places better for system reliability instead of the most profitable locations, excessive amounts of backup capacity could be avoided. At the same time, existing energy models are often wired to add a fixed amount of backup capacity for every new unit of renewable energy [20], which makes it impossible to capture the complementarity effects of renewable energy sources and their subsequent benefits.

However, obtaining a model that accounts for those complementarities of renewable energy sources is insufficient. The value of renewable energy sources for system reliability needs to be translated into investment incentives. Such incentives would steer investments towards creating an optimal mix of technologies for system reliability and towards avoiding considerable costs for unnecessary backup capacity provisions. Thus, we need a different type of renewable energy support mechanism that can take system reliability into account. Such support can only be designed with the help of a model that can do both: capture the complementarity of renewable energy sources and simulate investors' behavior.

This paper aims to design a conceptual model that allows for bridging these two detached phenomena: renewable energy support and energy system reliability. With such a model, we can see whether, where, and under which conditions the support for renewable energy sources is better to be designed based on the system reliability needs. In future studies, when the model introduced here is expanded, we will be able to observe whether the capacity mechanisms steer the mix of renewable energy technologies well after their support is withdrawn, whether any modifications are required, and what the effects of the development of storage solutions are. Overall, such a model would provide in-depth insight for modern energy policymaking.

The remainder of the paper is structured as follows. First, we provide a short overview of existing energy modeling approaches for: (i) renewable energy support design and (ii) energy system reliability studies. Furthermore, we present the conceptual idea and design of the model, illustrate it in action with a stylized case, and describe the modifications required for the model to be applied to a real-world analysis. We conclude with an in-depth discussion of the model's applicability and possible policy implications.
