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    Monday, March 16, 2015


    Power System Flexibility Strategic Roadmap; Preparing power systems to supply reliable power from variable energy resources

    Ken Dragoon and Georgios Papaefthymiou, February 25, 2015 (EcoFys)


    The need for a Flexibility Roadmap The need for reducing reliance on fossil resources is gaining currency around the world. Falling prices for renewable energy make the transition to societies based solely on renewable energy sources increasingly likely. Wind and solar energy are among the fastest growing sources of electric power generation today, and have already become competitive with conventional generation in some circumstances1 as illustrated in Figure 1.

    Relying almost entirely on energy from variable renewable resources will require a transformation in the way power systems are planned and operated. The power system roadmap presented here explores how power systems driven primarily by renewable resources can work, and provides a path forward to facilitate the transition.

    Power systems evolved over time based on utility companies responding to changing and somewhat unpredictable demand by controlling the output of a few relatively large utility-owned generators. Most conventional power generation today is derived from fossil-fuelled power plants that have been identified as major sources of carbon dioxide, a leading contributor to potentially devastating climate change. As a result, many regions are increasingly reliant on low-carbon solar and wind energy. Although originally touted for their environmental benefits, in recent years solar and wind power have become increasingly competitive (see Figure 1).

    Wind and solar resources are also called variable resources (VER) because their output is dependent on the availability of wind and sun, which vary somewhat unpredictably in time. Power systems relying on just a few percent of their energy from variable resources can treat them largely the same way as demand—by adjusting the large controllable conventional generators to meet the net effect of demand minus the variable generation.

    This approach has obvious limits. For example, if variable resources are capable of supplying all the demand at a particular moment, all conventional resources may be turned off—there would be no conventional controllable power plants to adjust as needed when the demand or variable resource output changes. Broadly speaking, the ability to make adjustments necessary to balancing supply and demand and maintain system reliability is termed flexibility.

    The importance of reducing power system carbon emissions, combined with the relative cost effectiveness of solar and wind resources calls to question whether a power system can provide the flexibility needed when variable resources are the primary power source. This report identifies the sources of flexibility needed by a power system based on variable resources, and outlines the needed steps to acquire them. The work is largely a synthesis of the many reports and studies on this subject. It seeks to summarize that body of work for a less technical audience that will need to put in place the policies, technical changes, and institutional systems necessary to make the power system of the future a reality.

    Power Systems Flexibility Strategic Roadmap outlines steps for overcoming the challenges in creating power systems with the flexibility needed to maintain system stability and reliability while relying primarily on variable energy resources. The roadmap envisions a transformation performed over three phases or regimes:

    • An initial phase with variable generation contributing up to about 10% of the energy demand, characterized by relatively mild changes to conventional power system operations and structures;

    • A dynamic middle phase up to about 50% penetration by variable resources characterized by phasing out conventional generation and a concerted effort to wring flexibility from existing infrastructure; and

    • The high penetration phase that inevitably addresses how power systems operate over longer periods of weeks or months when variable generation will be in either short supply, or overabundant supply.

    Although the roadmap lays out a decades-long and incremental path, it should not be concluded that the end result is some far off place that needn’t be of immediate concern. The needed policies, research, demonstration projects, and institutional changes need to start now exactly because the path is relatively long and the need so great.

    Power System Flexibility in a nutshell

    Electric power production and consumption occur simultaneously. Mismatches between electric power production and demand risk wide-scale power system outages. Balancing supply and demand has historically been accomplished by adjusting the output of certain controllable power plants to maintain the system frequency in some predefined acceptable band. This practice largely continues today, except that the variable output of wind and solar plants increases the need for flexibility in the power system to respond.

    Broadly speaking, flexibility is the ability of controllable power system components to produce or absorb power at different rates, over various timescales, and under various power system conditions. Historically, controllable power plants used to address load variability have done double-duty to cover the additional variability from renewable resources. The stresses from this business-as-usual approach are already being felt as conventional generators become unable to provide the needed flexibility. Although it is tempting to think that the solution to this issue is energy storage, the tableau of solutions is much broader (and less expensive!) than simply adding batteries or other storage technologies.

    Moving toward a low carbon economy implies a transformation in how power grids operate, with much greater emphasis on accommodating the unique characteristics of wind and solar power. It is perhaps not surprising that power systems optimized to use flexible generation to meet variable demand are not optimally designed in the case where both demand and supply are variable. Despite the apparent challenges, sources of power system flexibility are available to accommodate very high levels of variable renewable generation at modest costs. This report explores the flexibility options necessary to usher in the new low carbon energy world.

    Flexibility Today – Making more efficient use of it

    Given that the variability of added renewable resources can equal or exceed the variability of demand, new strategies for accommodating those resources are needed. At these larger renewable penetration levels, several challenges become apparent, including: rapid changes in wind due to the passage of large-scale weather fronts that can outstrip controllable generators’ ability to respond quickly enough; rapid changes of solar output in large penetration areas on partly cloudy days that could harm distribution system equipment; so-called “hot spots” of generation in geographic areas where available transmission might not be sufficient to move the power out; and generation of large amounts of power when demand is low, causing energy to be dumped as unusable. Additional flexibility is needed to address these challenges…

    A wide range of actions can be taken in most power systems to better accommodate variable renewable resources. These actions fall into four categories:

    1. Supply options include making better use of conventional generation. In many systems only a fraction of available controllable resources are used to provide flexibility, or may be limited to providing flexibility in hourly increments. Changes in power system operating rules and markets may be needed to bring all available flexibility into play. Surprisingly, variable resources themselves are often treated as uncontrollable, but sophisticated controls (e.g., limiting output under selected circumstances) can reduce the need for flexibility from other sources. In many systems, markets can be augmented to better recognize the value of flexibility and reflect that value to a wider range of conventional resources (e.g., sub-hourly dispatch of baseload and mid-load generators).

    The specific characteristics of variable resources also affect the need for flexibility. Generally, wind and solar resources spread over larger geographic areas tend to result in less flexibility burden than the same resources co-located with one another. The reason for that is that fluctuations in output across more distantly located resources tend to cancel one another more than resources located close to one another. Few systems today offer any economic incentives relating to the inherent diversity of new variable resources.

    2. Demand side flexibility options include controlling demand, especially in applications that have a storage component. Opportunities for controlling demand exist in many energyintensive industrial processes, irrigation and municipal water pumping, wastewater treatment, air and water heating and cooling (HVAC) systems, and electric vehicle charging. Energy efficiency can also be an important source of flexibility by freeing up traditional resources to contribute flexibility. Utilities have traditionally perceived end users as paying customers and not partners in supplying services to the grid, so new relationships must be formed to accomplish this change in a mutually satisfactory way. Demand-Side Management (DSM) is receiving increased focus as a potential source for low cost flexibility.

    3. Network: Power system transmission and distribution networks allow the sharing of flexibility resources between and among different regions. Although large-scale investment in new transmission infrastructure is one avenue for enhancing flexibility, more flexibility can be obtained from the existing transmission system. For example, in many power grids the maximum allowed power transfer capability is computed based on assumed conditions— situational awareness allows real-time dynamic assessments of transmission capability, potentially increasing the ability to transfer power over the existing network. Other enhancements include dynamic reactive control needed to accommodate rapidly changing transmission loading, and power flow control technologies that allow grid operators the ability to better direct power flows over the network.

    4. System Operation and Markets options include a number of important changes that may have significant potential to improve power grids’ ability to accommodate variable resources.

    These include automating market trading at the sub-hourly (e.g., 5-minute) level, opening markets for grid support services2 to all resources and loads; so-called “capacity payments” to resources for their ability to provide needed grid support services; and other technical market issues such as “gate closure times” that can help access available flexibility, or reduce the need for it. One feature of large penetration renewable energy systems is occasional large supplies of renewable energy that drive wholesale electric market prices near, or below, zero. These events need to be reflected at the retail level so that markets can develop around making more efficient use of the sporadic availability of low or no cost electric energy (e.g., to displace fossil boilers).

    Generally, accessing the untapped flexibility in today’s grid is a far lower cost means of accommodating variable resources than other infrastructure investments. For most systems, these adjustments will likely be sufficient to accommodate penetration levels efficiently up to 40-70% of electric power coming from variable renewable resources.

    Power System Flexibility Vision

    Vision Elements Ultimately, the transition to reliable, low-cost power systems dependent primarily on variable renewable resources involves a transformation in how power systems are planned and operated. How that transformation unfolds will depend on the conditions of the specific power system—the available renewable resources, availability of energy storage opportunities, composition of demand, interconnectedness to other power grids, etc. Nevertheless, there are certain characteristics that are likely common to all

    • Flexibility and energy storage inherent in demand will be more fully exploited, with today’s power consumers becoming power system partners.

    • Wholesale and ancillary services power markets will become more liquid, operating closer to real-time and their geographic reach will be expanded in order to access existing sources of flexibility and exploit the diversity of distant variable resources.

    • Variable renewable generators will be controlled to provide grid support services and to reduce variability and uncertainty deriving from uncontrolled renewable resources.

    • Price incentives or other mechanisms will be instituted that appropriately reflect diversityrelated benefits in the development of new variable resources.

    • Bulk energy storage will be instituted to cover longer periods (weeks to months) of low renewable energy supply.

    • More sophisticated communication and controls will be instituted to coordinate flexible resources across supply and demand, and across transmission and distribution grids—the “smart grid.”

    • New electric energy uses will arise to capitalize on the occasional, but increasingly frequent surplus energy events.

    The relative importance of these features will vary from system to system depending on local conditions, but each of them represents an important contribution to developing systems capable of functioning efficiently and reliably on variable renewable resources.

    It is important to recognize the role these features have to play because they cannot be instituted overnight. The history of renewable resource development has generally been somewhat nearsighted, focusing on establishing markets, technologies, and incentives to maximize energy production. The strategy of implementing production-based incentives has largely succeeded in encouraging the development of renewable resources. However, different strategies need to be pursued if the end goal is to produce more than 10-20% of power from variable resources.

    Reaching higher penetration levels requires creating a solid foundation in the early stages of resource development. This vision is intended to present an outline of that foundation, explaining the role and importance of each of its components…


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