QUICK NEWS, 4-28: DOES THE GRID SNUB WIND?; GA UTILITY GOES FOR MORE SUN; BIG GEOTHERMAL BUY; DR, THE RX FOR EFFICIENCY
DOES THE GRID SNUB WIND?
Do the Rules of the Nation's Electric Grid Discriminate Against Wind Power?
Peter Behr, April 27, 2010 (NY Times)
"…[C]hanges in the way the grid works -- if they occur – hinge…on what happens at the Federal Energy Regulatory Commission, where a set of central policy issues are on the table…[FERC is investigating ] whether the grid's current operating rules discriminate unduly against wind power, and if so, what should be done about it. The inquiry focuses on possible rule changes in how wind power forecasts are handled, how backup generation for wind is priced, and whether wind generation should be coordinated more widely across grid regions to dampen the impact of sudden wind shifts…[C]omments fill 2,800 pages, and the commission has set no timetable for taking action…
"…FERC [and] Chairman Jon Wellinghoff…[see] plenty of reason for concern about the prospects for wind and solar power based on the way the grid is run today…[This is] another front in the continuing, behind-the-scenes struggle between the renewable power sector and some of the electricity industry's old guard, whose historic ways of doing business are now under challenge…[T]here are fundamental disputes within the power industry over how the grid should be planned, who should pay to expand it, and how wind and solar power's climate benefits should figure in future transmission projects' costs. What FERC's staff will propose, and what its commissioners will ultimately do, on this proceeding remains unclear."
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"The wind industry has seized on FERC's invitation in the wind inquiry to level charges of discrimination against competitors and grid operators…[T]he continued growth of wind energy is threatened on many fronts -- by low natural gas prices, a patchwork of uncertain government policies, and industry bias and favoritism against wind resources…Wind power's obvious liability is its fickle nature, which requires grid operators to keep other generation reserves operating on standby. That comes at a cost…When wind ramps steeply down after a front passes, the drop is often relatively gradual and could be dealt with by calling on backup generation that can respond in 10 to 30 minutes…This is the cheapest source of standby power…Typically, however, dispatchers make up for a drop in wind power by calling on "regulation" generation reserves that can respond in minutes -- a far more expensive option…It is unfair to saddle wind generators with those higher costs…
"…Most wind generators don't offer to supply power for the following day -- the "day ahead" market featured in many competitive wholesale markets. The reason is the risk of financial penalties if they can't deliver on scheduled deliveries because the wind dies…These rules were created to accommodate coal and gas generators…More subtle discrimination involves policy-setting industry committees…More than 600 such stakeholder meetings were held in one recent year, and smaller wind generators can't afford the time or cost of attending and voting…"
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"…FERC asked whether it should require regions of the grid that schedule an hour or more in advance to move to shorter, inter-hour scheduling, since the shorter the lead time, the easier it is to forecast wind speed -- lessening the risk of penalties…Wind generators' output can vary by large amounts over an hour, but can be relatively constant when looking five or 10 minutes ahead…[S]tudies show that backup costs for wind could be cut by 80 percent by shortening hourly scheduling intervals…
"…Wind generators and their rivals also fell out on another question FERC posed -- whether it would help expand wind generation if scores of small grid dispatch regions or "balancing areas" in the southeastern and central United States were combined into a few large regional ones…To avoid blackouts, engineers running the grid must always keep power supply matched to demand…The larger the area where dispatchers can match generation with demand, the easier it is to deal with variable wind power: If the wind is still in one area, it's apt to be blowing in another in the same region…The National Renewable Energy Laboratory reported this year that the Eastern grid interconnection could rely on wind for 20 to 30 percent of its electricity supply by 2024 with a large-scale expansion of transmission…[T]he current grid operating structure, decades in the making, is embedded with rules and practices that affect reliability, planning and markets. Changing the system won't happen quickly, or without a fight…"
GA UTILITY GOES FOR MORE SUN
Georgia Power's Green Energy Program Redesigned to Include More Solar Power
April 27, 2010 (PR Newswire)
"Georgia Power received approval…from the Georgia Public Service Commission (PSC) to modify its Green Energy program, giving customers more solar options [effective June 1].
"At the request of PSC Commission Chair Lauren "Bubba" McDonald, the program has been redesigned to include…Premium Green Energy…[an option with] 50 percent solar energy at a cost of $5 per 100-kilowatt-hour (kWh) block. The option previously cost $4.50 per 100 kWh block and contained 10 percent solar energy…[T]he Standard Green Energy, Large Volume Purchase and Special Events Purchase options remain unchanged."
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…[T]he PSC also approved Georgia Power raising the solar capacity cap under its Renewable Non Renewable (RNR) tariff from 1.5 megawatts (MW) to 2.5 MW. The company will now purchase solar energy from customers through this tariff at a new price of 17 cents per kWh."
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"Georgia Power and the Commission worked together to develop a new mechanism that will automatically raise the solar capacity cap as participation in the Green Energy program grows. Under this mechanism, for every 219 blocks of Premium Green Energy that are purchased by customers, Georgia Power will purchase an additional 100 kW of solar energy through the RNR tariff…
"Electricity generated for the Green Energy program helps grow the renewable resource base in Georgia and the Southeast and expand the market for renewable energy credits (RECs). RECs are created when a renewable energy facility generates electricity or uses renewable fuel. Customers who purchase RECs through the Green Energy program are paying for the benefit of displacing other non-renewable sources from the electric grid…"
BIG GEOTHERMAL BUY
Sacramento Municipal Utility District to Buy Geothermal-sourced Clean Power from Vulcan Power Company
27 April 2010 (Business Wire via EarthTimes)
"The Sacramento Municipal Utility District (“SMUD”) has signed a 21-year contract with Patua Project, LLC, a subsidiary of Vulcan Power Company (“Vulcan”), a developer of geothermal energy projects, for the purchase of up to 132 megawatts (MW) of baseload renewable energy from the Patua geothermal plant to be constructed in northern Nevada…
"Vulcan’s Patua geothermal energy project site, located near Fernley, Nevada, will be built in three phases and is expected to be the company’s first geothermal power plant. Phase I drilling recommenced in February 2010 and construction of a 60-MW power plant is projected to begin in January 2011. The project will produce electricity around the clock with power deliveries projected to occur as early as the first quarter of 2012, continuing through 2033…"
Schematic of geothermal power plant (click to enlarge)
"The project initially will provide 500 gigawatt hours (GWh) per year, eventually ramping up to 1,000 GWh per year. These gigawatt hours will count towards SMUD’s aggressive goal of 33 percent renewable energy by 2020. Last year, renewable energy accounted for approximately 19 percent of SMUD’s power supply and will reach 20 percent by the end of 2010…
"Geothermal energy is a renewable power source by which naturally occurring hot water reservoirs are drilled, producing geothermal fluids that can be used as a clean alternative to fossil fuels burned to generate electricity. Geothermal reservoirs are replenished by injecting the produced water back into the reservoir, establishing a long-term renewable energy resource without any emissions of greenhouse gases."
DR, THE RX FOR EFFICIENCY
Demand Response; Commercial, Industrial, and Residential Applications for Peak Demand Load Management
Jevan Fox and Clint Wheelock, 2Q 2010 (Pike Research)
"The Demand Response (DR) sector is growing quickly and will experience major changes over the next few years…The National Institute of Standards and Technology (NIST) is working to determine industry standards, and the Energy Independence and Security Act of 2007 (EISA 2007) requires both FERC and NIST to have the roadmap for demand response to be defined by June 2010.
"DR reduces the need for energy from expensive peak resources…[A]t its core, DR is a function of peak demand: as peak demand increases, the need for DR increases. There are significant environmental and social benefits from reducing energy demand, yet DR’s primary goal is to decrease capital expenditures (capex) on both sides of the meter. DR cuts costs for utilities so that they will not have to build a coal-fired peaking plant for $2,500 per kWh with a 30-year return-on-investment (ROI)…[T]he utility can implement DR at a fraction of the cost. The rising costs and longer lead times in building additional sources of traditional generation are a key driver for DR…[E]nd-users can curtail energy use, thus saving capital…"
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"Demand response is inherently an energy efficiency application. It strives to shed, curtail, or eliminate energy usage through technologies, solutions, and programs that manage customer demand for electricity in response to price signals, incentives, and directions from grid operators…The U.S. Department of Energy (DOE) segments DR into two motivating programs…Price-based DR such as real-time pricing (RTP), critical-peak pricing (CPP), and time-of use (TOU) tariffs…[an] Incentive-based DR programs are triggered by a grid reliability problem or high electricity prices…
"There are a number of significant DR market growth drivers, the most significant of which is the growing demand for electricity amidst increasing energy costs, especially during periods of peak demand…[S]mart grid technologies, mainly smart meters, are a major driver for DR and will be a catalyst for DR programs…[but] Pike Research does not believe the residential market will gain significant traction in the near term…"
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"The [commercial and industrial (C&I)] sectors are the low hanging fruit of the industry. Our analysis indicates that DR vendors with deep vertical integration will continue to secure an increasing amount of megawatts (MW) under contract…Pure-play DR companies, or Curtailment Service Providers (CSPs), are presently in a good position…[and] legislation will boost revenues for CSPs with commercial and industrial solutions, as the drive to make U.S. commercial buildings more energy efficient…
"Pike Research believes that DR will become an application within a company’s energy efficiency (EE) suite…Energy Service Companies (ESCOs) will be increasingly attracted to DR because it is an energy efficiency measure they can provide in their turnkey building efficiency plan…At its essence, demand response represents a convergence of information technology (IT) with energy management…Pike Research believes that telecommunications and networking companies will increasingly strive to have a play in the energy efficiency industry…DR revenues will grow to almost $3 billion in 2015 in our “average” scenario…"