TODAY’S STUDY: THE FUTURE OF NEW ENERGY

Renewable Electricity Futures Study – Volume 1: Exploration of High-Penetration Trieu

Mai, Wiser, et. al., June 2012 (National Renewable Energy Laboratory and others)

Perspective

The Renewable Electricity Futures Study (RE Futures) provides an analysis of the grid integration opportunities, challenges, and implications of high levels of renewable electricity generation for the U.S. electric system. The study is not a market or policy assessment. Rather, RE Futures examines renewable energy resources and many technical issues related to the operability of the U.S. electricity grid, and provides initial answers to important questions about the integration of high penetrations of renewable electricity technologies from a national perspective. RE Futures results indicate that a future U.S. electricity system that is largely powered by renewable sources is possible and that further work is warranted to investigate this clean generation pathway. The central conclusion of the analysis is that renewable electricity generation from technologies that are commercially available today, in combination with a more flexible electric system, is more than adequate to supply 80% of total U.S. electricity generation in 2050 while meeting electricity demand on an hourly basis in every region of the United States.

The renewable technologies explored in this study are components of a diverse set of clean energy solutions that also includes nuclear, efficient natural gas, clean coal, and energy efficiency. Understanding all of these technology pathways and their potential contributions to the future U.S. electric power system can inform the development of integrated portfolio scenarios. RE Futures focuses on the extent to which U.S. electricity needs can be supplied by renewable energy sources, including biomass, geothermal, hydropower, solar, and wind.

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The study explores grid integration issues using models with unprecedented geographic and time resolution for the contiguous United States. The analysis (1) assesses a variety of scenarios with prescribed levels of renewable electricity generation in 2050, from 30% to 90%, with a focus on 80% (with nearly 50% from variable wind and solar photovoltaic generation); (2) identifies the characteristics of a U.S. electricity system that would be needed to accommodate such levels; and (3) describes some of the associated challenges and implications of realizing such a future. In addition to the central conclusion noted above, RE Futures finds that increased electric system flexibility, needed to enable electricity supply-demand balance with high levels of renewable generation, can come from a portfolio of supply- and demand-side options, including flexible conventional generation, grid storage, new transmission, more responsive loads, and changes in power system operations. The analysis also finds that the abundance and diversity of U.S. renewable energy resources can support multiple combinations of renewable technologies that result in deep reductions in electric sector greenhouse gas emissions and water use. The study finds that the direct incremental cost associated with high renewable generation is comparable to published cost estimates of other clean energy scenarios. Of the sensitivities examined, improvement in the cost and performance of renewable technologies is the most impactful lever for reducing this incremental cost. Assumptions reflecting the extent of this improvement are based on incremental or evolutionary improvements to currently commercial technologies and do not reflect U.S. Department of Energy activities to further lower renewable technology costs so that they achieve parity with conventional technologies.

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RE Futures is an initial analysis of scenarios for high levels of renewable electricity in the United States; additional research is needed to comprehensively investigate other facets of high renewable or other clean energy futures in the U.S. power system. First, this study focuses on renewable-specific technology pathways and does not explore the full portfolio of clean technologies that could contribute to future electricity supply. Second, the analysis does not attempt a full reliability analysis of the power system that includes addressing sub-hourly, transient, and distribution system requirements. Third, although RE Futures describes the system characteristics needed to accommodate high levels of renewable generation, it does not address the institutional, market, and regulatory changes that may be needed to facilitate such a transformation. Fourth, a full cost-benefit analysis was not conducted to comprehensively evaluate the relative impacts of renewable and non-renewable electricity generation options.

Lastly, as a long-term analysis, uncertainties associated with assumptions and data, along with limitations of the modeling capabilities, contribute to significant uncertainty in the implications reported. Most of the scenario assessment was conducted in 2010 with assumptions concerning technology cost and performance and fossil energy prices generally based on data available in 2009 and early 2010. Significant changes in electricity and related markets have already occurred since the analysis was conducted, and the implications of these changes may not have been fully reflected in the study assumptions and results. For example, both the rapid development of domestic unconventional natural gas resources that has contributed to historically low natural gas prices, and the significant price declines for some renewable technologies (e.g., photovoltaics) since 2010, were not reflected in the study assumptions.

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Nonetheless, as the most comprehensive analysis of U.S. high-penetration renewable electricity conducted to date, this study can inform broader discussion of the evolution of the electric system and electricity markets toward clean systems.

The RE Futures team was made up of experts in the fields of renewable technologies, grid integration, and end-use demand. The team included leadership from a core team with members from the National Renewable Energy Laboratory (NREL) and the Massachusetts Institute of Technology (MIT), and subject matter experts from U.S. Department of Energy (DOE) national laboratories, including NREL, Idaho National Laboratory (INL), Lawrence Berkeley National Laboratory (LBNL), Oak Ridge National Laboratory (ORNL), Pacific Northwest National Laboratory (PNNL), and Sandia National Laboratories (SNL), as well as Black & Veatch and other utility, industry, university, public sector, and non-profit participants. Over the course of the project, an executive steering committee provided input from multiple perspectives to support study balance and objectivity.

RE Futures is documented in four volumes of a single report: This volume—Volume 1—describes the analysis approach and models, along with the key results and insights; Volume 2 describes the renewable generation and storage technologies included in the study; Volume 3 presents end-use demand and energy efficiency assumptions; and Volume 4 discusses operational and institutional challenges of integrating high levels of renewable energy into the electric grid.

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Executive Summary

The Renewable Electricity Futures Study (RE Futures) is an initial investigation of the extent to which renewable energy supply can meet the electricity demands of the contiguous United States1 over the next several decades. This study includes geographic and electric system operation resolution that is unprecedented for long-term studies of the U.S. electric sector. The analysis examines the implications and challenges of renewable electricity generation levels—from 30% up to 90%, with a focus on 80%, of all U.S. electricity generation from renewable technologies—in 2050. At such high levels of renewable electricity penetration, the unique characteristics of some renewable resources, specifically geographical distribution and variability and uncertainty in output, pose challenges to the operability of the U.S. electric system. The study focuses on some key technical implications of this environment, exploring whether the U.S. power system can supply electricity to meet customer demand with high levels of renewable electricity, including variable wind and solar generation. The study also begins to address the potential economic, environmental, and social implications of deploying and integrating high levels of renewable electricity in the United States.

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RE Futures was framed with a few important questions:

• The United States has diverse and abundant renewable energy resources that are available to contribute higher levels of electricity generation over the next decades. Future renewable electricity generation will be driven in part by federal incentives and renewable portfolio standards mandated in many states.2 Practically, how much can renewable energy technologies, in aggregate, contribute to future U.S. electricity supply?

• In recent years, variable renewable electricity generation capacity in the United States has increased considerably. Wind capacity, for example, has increased from 2.6 GW in 2000 to 40 GW in 2010, while solar capacity has also begun to grow rapidly. Can the U.S. electric power system accommodate higher levels of variable generation from wind or solar photovoltaics (PV)?

• Overall, renewable energy contributed about 10% of total power-sector U.S. electricity supply in 2010 (6.4% from hydropower, 2.4% from wind energy, 0.7% from biopower, 0.4% from geothermal energy, and 0.05% from solar energy).3 Are there synergies that can be realized through combining these diverse sources, and to what extent can aggregating their output over larger areas help enable their integration into the power system?

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Multiple international studies4 have explored the possibility of achieving high levels of renewable electricity penetration, primarily as a greenhouse gas (GHG) mitigation measure. RE Futures presents systematic analysis of a broad range of potential renewable electricity futures for the contiguous United States based on unprecedented consideration of geographic, temporal, and electric system operation aspects.5

RE Futures explores a number of scenarios using a range of assumptions for generation technology improvement, electric system operational constraints, and electricity demand to project the mix of renewable technologies—including wind, PV, concentrating solar power (CSP), hydropower, geothermal, and biomass—that meet various prescribed levels of renewable generation, from 30% to 90%. Additional sensitivity cases are focused on an 80%-by-2050 scenario. At this 80% renewable generation level, variable generation from wind and solar technologies accounts for almost 50% of the total generation.

Within the limits of the tools used and scenarios assessed, hourly simulation analysis indicates that estimated U.S. electricity demand in 2050 could be met with 80% of generation from renewable electricity technologies with varying degrees of dispatchability, together with a mix of flexible conventional generation and grid storage, additions of transmission, more responsive loads, and changes in power system operations.6 Further, these results were consistent for a wide range of assumed conditions that constrained transmission expansion, grid flexibility, and renewable resource availability. The analysis also finds that the abundance and diversity of U.S. renewable energy resources can support multiple combinations of renewable technologies that result in deep reductions in electric sector greenhouse gas emissions and water use. Further, the study finds that the incremental cost associated with high renewable generation is comparable to published cost estimates of other clean energy scenarios. Of the sensitivities examined, improvement in the cost and performance of renewable technologies is the most impactful level for reducing this incremental cost.

While this analysis suggests such a high renewable generation future is possible, a transformation of the electricity system would need to occur to make this future a reality. This transformation, involving every element of the grid, from system planning through operation, would need to ensure adequate planning and operating reserves, increased flexibility of the electric system, and expanded multi-state transmission infrastructure, and would likely rely on the development and adoption of technology advances, new operating procedures, evolved business models, and new market rules.

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Key results of this study include the following:

• Deployment of Renewable Energy Technologies

o Renewable energy resources, accessed with commercially available generation technologies, could adequately supply 80% of total U.S. electricity generation in 2050 while balancing supply and demand at the hourly level.

o All regions of the United States could contribute substantial renewable electricity supply in 2050, consistent with their local renewable resource base.

o Multiple technology pathways exist to achieve a high renewable electricity future. Assumed constraints that limit power transmission infrastructure, grid flexibility, or the use of particular types of resources can be compensated for through the use of other resources, technologies, and approaches.

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o Annual renewable capacity additions that enable high renewable generation are consistent with current global production capacities but are significantly higher than recent U.S. annual capacity additions for the technologies considered. No insurmountable long-term constraints to renewable electricity technology manufacturing capacity, materials supply, or labor availability were identified.

• Grid Operability and Hourly Resource Adequacy

o Electricity supply and demand can be balanced in every hour of the year in each region with nearly 80% electricity from renewable resources, including nearly 50% from variable renewable generation, according to simulations of 2050 power system operations.

o Additional challenges to power system planning and operation would arise in a high renewable electricity future, including management of low-demand periods and curtailment of excess electricity generation.

o Electric sector modeling shows that a more flexible system is needed to accommodate increasing levels of renewable generation. System flexibility can be increased using a broad portfolio of supply- and demand-side options, and will likely require technology advances, new operating procedures, evolved business models, and new market rules.

• Transmission Expansion

o As renewable electricity generation increases, additional transmission infrastructure is required to deliver generation from cost-effective remote renewable resources to load centers, enable reserve sharing over greater distances, and smooth output profiles of variable resources by enabling greater geospatial diversity.

• Cost and Environmental Implications of High Renewable Electricity Futures

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o High renewable electricity futures can result in deep reductions in electric sector greenhouse gas emissions and water use.

o The direct incremental cost associated with high renewable generation is comparable to published cost estimates of other clean energy scenarios. Improvement in the cost and performance of renewable technologies is the most impactful lever for reducing this incremental cost.

• Effects of Demand Growth

o With higher demand growth, high levels of renewable generation present increased resource and grid integration challenges.

This report presents the analysis of some of the technical challenges and opportunities associated with high levels of renewable generation in the U.S. electric system. However, the analysis presented in this report represents only an initial set of inquiries on a national scale. Additional studies are required to more fully assess the technical, operational, reliability, economic, environmental, social, and institutional implications of high levels of renewable electricity generation, and further explore the nature of the electricity system transformation required to enable such a future.

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Study Organization and Report Structure

RE Futures was led by a team from the National Renewable Energy Laboratory (NREL) and the Massachusetts Institute of Technology (MIT). The leadership team coordinated teams of subject matter experts from U.S. Department of Energy (DOE) national laboratories, including Idaho National Laboratory (INL), Lawrence Berkeley National Laboratory (LBNL), NREL, Oak Ridge National Laboratory (ORNL), Pacific Northwest National Laboratory (PNNL), and Sandia National Laboratories (SNL), as well as Black & Veatch and other utility, industry, university, public sector, and non-profit participants. These expert teams explored the prospects for large-scale deployment of specific renewable generation and storage technologies, along with some of the issues and challenges associated with their integration into the electric system.

In total, this report is the culmination of contributions from more than 110 individuals at more than 35 organizations (Appendix D lists the contributors to the study). Over the course of the project, an executive steering committee provided input from multiple perspectives to support study balance and objectivity. Technical reviewers from the renewable technology and electric sector industries, universities, public sector, non-profits, and other entities commented on a preliminary version of this report.

Most of the analysis informing the study, particularly the scenario assessment, was conducted in 2010. As a result, study assumptions concerning technology cost and performance and fossil energy prices were generally based on data available in late 2009 and early 2010. Where possible, more recent published work has been referenced; however, the implications of these publications may not have been fully reflected in the RE Futures study assumptions. For example, both the rapid development of domestic unconventional natural gas resources that has contributed to historically low natural gas prices, and the significant price declines for some renewable technologies (e.g., photovoltaics) since 2010, were not reflected in the study assumptions. Finally, the technology projections presented in RE Futures do not necessarily reflect the current DOE estimates.

RE Futures is documented in four volumes of a single report: This first volume—Volume 1—describes the analysis approach and models, along with the key results and insights. Volume 2 describes the renewable generation and storage technologies included in the study; Volume 3 presents 2050 end-use demand and energy efficiency assumptions; and Volume 4 discusses some operational and institutional challenges of integrating high levels of renewable energy into the electric grid…

…More than two dozen scenarios were modeled and analyzed in this study…Low-Demand Baseline Scenario…High-Demand Scenarios…Alternative Fossil Scenarios…

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Renewable Resources Characterization

The United States has diverse and abundant renewable resources, including biomass, geothermal, hydropower, ocean, solar, and wind resources. Solar and wind are the most abundant of these resources. These renewable resources are geographically constrained but widespread—most are distributed across all or most of the contiguous states (Figure ES-2). Within these broad resource types, a variety of commercially available renewable electricity generation technologies have been deployed in the United States and other countries, including stand-alone biopower, co-fired

• Biomass power (Chapter 6, Volume 2) is generated by collecting and combusting plant matter and using the heat to drive a steam turbine. Biomass resources from agricultural and forest residues, although concentrated primarily in the Midwest and Southeast, are available throughout the United States. While biomass supply is currently limited, increased supply is possible in the future from increased production from energy crops and advanced harvesting technologies. DOE (2011) provides an estimate of 696–1,184 million annual dry tonnes of biomass inventory potential (of which 52%–61% represents dedicated biomass crops) in 2030.21 The estimated biomass feedstocks correspond to roughly 100 GW of dedicated biopower capacity. Biopower can be generated from stand-alone plants, or biomass can be co-fired in traditional pulverized coal plants.

• Geothermal power (Chapter 7, Volume 2) is generated by water that is heated by hot underground rocks to drive a steam turbine. Geothermal resources are generally concentrated in the western United States, and they are relatively limited for hydrothermal technologies (36 GW of new technical resource potential), which rely on natural hot water or steam reservoirs with appropriate flow characteristics. Only commercially available hydrothermal technologies were included in the modeling analysis. Although not modeled, emerging technologies, including enhanced geothermal systems, engineered hydrothermal reservoirs, geopressured resources, low temperature resources, or co-production from oil and gas wells, could expand the geothermal resource potential in the United States by more than 500 GW.

• Hydropower (Chapter 8, Volume 2) is generated by using water—from a reservoir or run-of-river—to drive a hydropower turbine. Run-of-river technology could produce electricity without creating large inundated areas, and many existing dams could be equipped to generate electricity. The future technical potential of run-of-river hydropower from within the contiguous United States is estimated at 152–228 GW. Only new run-of-river hydropower capacity was considered in RE Futures modeling, and existing hydropower plants were assumed to continue operation. Other hydropower technologies, such as new generation at non-powered dams and constructed waterways, have the potential to contribute to future electricity supply, but they were not modeled in this study.

• Ocean technologies (Chapter 9, Volume 2) are not broadly commercially available at this time, and therefore were not modeled in this study, but both U.S. and international research and development programs are working to reduce the cost of the technologies. Ocean current resources are best on the U.S. Gulf and South Atlantic Coasts; wave energy resources are strongest on the West Coast. All resources are uncertain; preliminary estimates indicate that the U.S. wave energy technical potential is on the order of 2,500 TWh/yr. Other ocean technologies, including ocean thermal energy conversion technologies and tidal technologies, may also contribute to future electricity supply.

• Solar resources (Chapter 10, Volume 2) are the most abundant renewable resources. They extend across the entire United States, with the highest quality resources concentrated in the Southwest. The technical potential of utility-scale PV and CSP technologies is estimated to be approximately 80,000 GW and 37,000 GW, respectively, in the United States. Distributed rooftop PV technologies are more limited, with approximately 700 GW available. PV technologies convert sunlight directly to electricity while CSP technologies collect high temperature heat to drive a steam turbine.

• Wind resources (Chapter 11, Volume 2) on land are abundant, extending throughout the United States, and offshore resources provide additional options for coastal and Great Lakes regions. Onshore and fixed-bottom offshore technologies are currently commercially available.22 Floating platform offshore wind technologies that could access high-quality wind resources in deeper waters are less mature and were not considered in the modeling. Wind technical resource estimates exceed 10,000 GW in the contiguous United States…

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Conclusions

The RE Futures study assesses the extent to which future U.S. electricity demand could be supplied by commercially available renewable generation technologies—including wind, utility-scale and rooftop PV, CSP, hydropower, geothermal, and biomass—under a range of assumptions for generation technology improvement, electric system operational constraints, and electricity demand. Within the limits of the tools used and scenarios assessed, hourly simulation analysis indicates that estimated U.S. electricity demand in 2050 could be met with 80% of generation from renewable energy technologies with varying degrees of dispatchability together with a mix of flexible conventional generation and grid storage, additions of transmission, more responsive loads, and foreseeable changes in power system operations. While the analysis was based on detailed geospatially rich modeling down to the hourly timescale, the study is subject to many limitations both with respect to modeling capabilities and the many assumptions required about inherently uncertain variables, including future technological advances, institutional choices, and market conditions…

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