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The real challenge is going to be coming up with sustainable scheduled load-following.
I think you misread me: I'm not implying that the mechanics of load following would be a problem of consequence even at ~100% renewable penetration. That meme is nonsense. But we do need load-following power above and beyond hydro.
I don't think using bio-fuels for this is a good idea: they are limited in availability, and it would be better to reserve them, e.g., for transport, where they are hard to replace completely. One solution on the longer run would be hydrogen fuel, generated by electrolysis from peak wind/solar. This is already being studied. Besides being burned in power plants, hydrogen has some direct uses, e.g., in steel making (one example of a user that could switch off on request and use stored fuel).
This would require the installed capacity of renewables to be more than 100% of average electric power load, e.g., 150%. A tall order, but the North Sea is large enough for a big chunk of that.
I would not bet the farm on that.
http://arxiv.org/abs/1106.1401
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