The reason it is difficult to handle the load swings is that coal and nuclear plants can not be quickly turned off and on. For example, it can take a full day or two for a coal power plant to go from cold start to full power output. We do have some power plants that can react quickly, natural gas can react in a few minutes with the newest plants to an hour with the older ones. Hydro is very fast and can be switched off and on in seconds.
So take a typical grid that is getting half it's power from coal, maybe 10% from nuclear, and the rest from natural gas and hydro. Now do what Germany did and put in enough solar PV that 5% of the total energy of the year is coming from solar PV. As the previous article showed, the instantaneous peak that results from this is as high as 50% of the total demand. In Germany's case, when that happens, all the gas and hydro plants are off and all their power is coming from coal, nuclear, and solar. And there is the breaking point. If solar increases any more in Germany, when solar is peaking, they either have to start rejecting some of the solar power, the coal power, or the nuclear. The solar can not be rejected under current German law, which leaves only coal or nuclear. And those boys really can't turn off their plants very well. The result is that they push the spot price down to encourage anyone who can respond to the spot market to take power.
Germany has already experienced negative electricity prices in the spot market because of this problem.
Now imagine Germany doubles the amount of solar PV they have. This would result in them getting around 10% of their total electrical energy from solar PV. The instantaneous peaks would be as high as 100% of total demand. What is supposed to happen then? The obvious thing to do is to simply cap solar PV to an instantaneous peak of around 50% of total demand. That happens infrequently enough that Germany could still probably get 9.5% of their total energy from solar PV. That only would reject about 5% of the power the solar panels could have collected. That's reasonable technically, but illegal under current German law.
If you look at this paper, http://papers.ssrn.com/sol3/pa...
The authors introduce the concept of system-LCOE. LCOE is levelized Cost Of Energy. It is a common utility term. The idea is to sum up every single cost to produce electricity and reduce it to a single number. Historically, LCOE ignores any issues with integrating with the grid. System LCOE is meant to try to incorporate both LCOE and grid integration issues. If you look at their graph on page 19, you can see how the cost of integrating solar PV increases quite dramatically as the share of energy coming from solar increases. If their graph is correct, Germany is paying in the ballpark of 15% extra to integrate into the grid.