TODAY’S STUDY: HOW THE GRID WILL EASILY HANDLE MORE NEW ENERGY
Integrating Renewable Energy into the Electricity Grid; Case studies showing how system operators are maintaining reliability
Jurgen Weiss and Bruce Tsuchida, June 2015 (The Brattle Group)
A number of factors are contributing to increases in renewable energy production in the United States (and beyond). These factors include rapidly declining costs of electricity produced from renewable energy sources, regulatory and policy obligations and incentives, and moves to reduce pollution from fossil fuel-based power generation, including greenhouse gas emissions. While not all renewable energy sources are variable, two such technologies – wind and solar PV – currently dominate the growth of renewable electricity production. The production from wind and solar PV tries to capture the freely available but varying amount of wind and solar irradiance. As the share of electricity produced from variable renewable resources grows, so does the need to integrate these resources in a cost-effective manner, i.e., to ensure that total electricity production from all sources including variable renewable generation equals electricity demand in real time. Also, a future electric system characterized by a rising share of renewable energy will likely require concurrent changes to the existing transmission and distribution (T&D) infrastructure. While this report does not delve into that topic, utilities, grid operators and regulators must carefully plan for needed future investments in T&D, given the lead times and complexities involved.
Rather, this report focuses on the fact that variable renewable generation adds a different new component to the challenges facing system operators in maintaining system reliability. For example, the decline in solar production at the end of the day can lead to significant ramping needs for grid operators. Dispatchable non-solar resources (existing fossil and hydro generation but also potentially demand resources) must be rapidly deployed to make up for the decline in solar PV generation at the same time that residential electricity demand is rising at the end of the day. Similar challenges can arise as a consequence of deviations in output from wind or solar facilities relative to weather forecasts over time periods ranging from minutes to hours.
The question of integrating higher levels of variable renewable generation has recently been highlighted in the context of the U.S. Environmental Protection Agency’s proposed Clean Power Plan. An Initial Reliability Review (IRR)1 of the Clean Power Plan conducted by the North American Electric Reliability Corporation (NERC) raised concerns about the levels of renewable energy generation incorporated into EPA’s assumptions about what states could be expected to do to reduce greenhouse gas emissions. In an assessment of that IRR prepared for the Advanced Energy Economy Institute (AEEI), we found that NERC’s reliability concerns related to renewable energy integration were likely overstated, given the levels of renewable energy penetration already managed with no measurable compromise of reliability in some parts of the United States as well as in Europe.2 As a follow-up to that assessment, we have been asked by AEEI to provide an overview of what utilities and independent system operators (ISOs) with relatively high shares of variable renewable generation are doing to integrate those resources into their systems without compromising reliability.
A survey of integration efforts in the United States and abroad reveals that the last decade has seen both a rapid increase in the deployment of variable renewable generation and improvements in their integration. 3 ISOs and utilities have at their disposal a large and increasing portfolio of options to accommodate large and growing shares of renewable generation while maintaining high levels of reliability. The options range from purely operational changes to possibilities that become available as a consequence of advancements in technology unrelated to renewable energy. Examples of the former include enhancing the coordination between balancing areas (including increasing their size), reinforcing the transmission system, and increasing participation of demand response. Examples of the latter include technological advances in weather forecasting, which, together with better data on historical performance of renewable energy, allows significantly improved forecasting accuracy of renewable generation; the proliferation of smarter infrastructure, much of it deployed at the customer site (smart meters, smart thermostats, smart appliances, all enabled by smarter software), enabling participation of increasing amounts of demand in activities that help mitigate the variability of renewable generation; and technological advances of renewable and complementary technologies (inverters, batteries) that allow renewable generators themselves to contribute to maintaining reliability.
In this report, we provide two in-depth case studies, of the Electric Reliability Council of Texas (ERCOT) and Xcel Energy Colorado (a.k.a. Public Service Company of Colorado, or PSCo), to show how they integrate high shares of variable renewable energy. ERCOT (and the distribution utilities in ERCOT) and Xcel Energy Colorado have managed to successfully integrate increasing amounts of variable renewable energy resources at costs that have generally been small to modest.4 For example, ERCOT estimated the cost of integrating its first 10,000 MW of wind, approximately the capacity currently deployed, to be about $0.50 per MWh of wind generation.5 These organizations have used well-established and widely available methods and technologies such as:
o changes in ancillary services, which manage short-term mismatches between electric supply and demand, with fast-ramping gas-fired generation, demand response, storage, and other technologies
o improved forecasting of production from wind,
o increased flexibility of fossil power plants on the system,
o evolving capabilities of renewable generation itself to contribute to reliability,
o expansion of transmission infrastructure (even though not an “integration measure” according to our use of the term), and
o newer approaches under development, which include utilizing large-scale storage, dynamically managing the capacity of transmission lines, and allowing demand response to play a bigger role in managing system variability (and emergency situations).
The success to date of ERCOT and Xcel Energy Colorado shows that integrating variable renewable energy at penetration levels of 10-20% on average and at times above 50% – i.e., high relative to the current levels in most of the United States – is possible. Integration challenges in other parts of the United States will differ due to both the mix of renewable resources and the make-up of the existing electric system. Nonetheless, by adopting approaches similar to those used (or planned) in ERCOT and Xcel Energy Colorado, ISOs/RTOs and utilities in other states should be able to integrate increasing shares of variable renewable generation using wellestablished tools and technologies. While infrastructure changes will likely be necessary in the longer term, the shorter-term integration challenges in many cases can be addressed with modest operational changes.
Ongoing technological progress and ongoing learning by utility and ISO/RTO managers about best practices of managing the operations of electric systems with high renewable shares will likely allow the integration not only of the levels of variable renewable energy capacity now in places like Texas and Colorado but even larger amounts in the future. Specifically, integration of variable renewable energy at levels of penetration as high as those reliably managed by ERCOT and Xcel Energy Colorado, if not higher, should not be seen as a significant technical obstacle to compliance with EPA’s proposed Clean Power Plan. Rather, carefully examining the lessons learned in states and regions such as the ones examined here should help ISOs and utilities ensure that significantly larger amounts of variable renewable energy can be integrated at small to modest costs while maintaining high levels of reliability…
In this report, we highlighted how a few ISOs and utilities with material shares of renewable generation already have changed their operations to accommodate the forecasting challenges and short-term performance variability that can increase with growing shares of variable renewable generation. To date, these integration efforts have been largely relying on well-established technologies, indicating that lack of technology cannot be considered a major barrier to being able to integrate amounts of variable renewable generation significantly in excess of current average U.S. levels. Though new technologies are being explored and becoming more promising, particularly storage, it is not necessary to have large amounts of such new resources to incorporate meaningful quantities of renewables onto a system and preserve its security and reliability.
As these case studies show, ISOs and utilities can deploy a large and increasing portfolio of options to accommodate large and growing shares of renewable generation while maintaining high levels of reliability. The options range from purely operational changes to possibilities that become available as a consequence of advancements in technology unrelated to renewable energy. Examples of the former include increasing the coordination between balancing areas (including increasing their size), reinforcing the transmission system, and increasing participation of demand response. Examples of the latter include technological advances in weather forecasting which, together with better data on historical performance of renewable energy, allows significant improvements in forecasting accuracy of renewable generation; the proliferation of smarter infrastructure, much of it deployed at the customer site (smart meters, smart thermostats, smart appliances, all enabled by smarter software), enabling participation of increasing amounts of demand in activities that help mitigate the variability of renewable generation; and technological advances of renewable and complementary technologies (inverters, batteries) that allow renewable generators themselves to contribute to maintaining reliability.
Numerous renewable integration studies have estimated the cost of using this wide portfolio of options to represent a relatively small portion of the overall cost of the electric system. Our case studies indicate that deploying new and innovative solutions can further mitigate the challenges of integrating variable renewable generation, at least in some cases (such as using state-of-the-art wind and solar forecasts) with significant cost savings compared to traditionally used integration approaches. Continued strong growth of renewable generation will require continued significant planning and effort, as well as investment in the electric infrastructure – in transmission infrastructure to bring electricity from renewable resource rich locations to load centers, and in distribution infrastructure as the share of distributed resources grows. Bringing additional renewable resources to market will thus likely be an important additional driver of planning and building a 21st century grid, which is also driven by changes on the demand side of the market (including distributed generation, but also new sources of demand and options for demand-side flexibility), changing population densities, the desire to further increase inter-regional interconnections, cybersecurity concerns, the aging of existing transmission and distribution infrastructure, etc.
The good news, however, is that there is substantial evidence that accommodating these increasing levels of variable renewable generation in ways that preserve high levels of reliability should be possible at a cost (excluding the cost of any incremental transmission) that represents a modest share of the total cost of the electric system. Specifically, integration of variable renewable energy at levels of penetration as high as those reliably managed by ERCOT and Xcel Energy Colorado, if not higher, should not be seen as a significant obstacle to compliance with EPA’s proposed Clean Power Plan.