TODAY’S STUDY: SHOOTING DOWN THE DUCK (CURVE)

Flattening the Duck; Facilitating Renewables for the 21st Century Grid’

Craig Lewis, 11 February 2014 (Clean Coalition)

This presentation will focus on integrating renewables with cost-effective intelligent grid solutions, including demand response, storage, and advanced inverters. The presentation will show how to address grid reliability challenges (steep ramps, over-generation, voltage control, and minute-to-minute fluctuations) with preferred resources, staying aligned with California goals.

Wholesale Distributed Generation or WDG is the market segment that makes this transition possible. The retail DG – behind the meter – and central generation renewables – out in the desert, most of the time – are both part of the equation, but WDG has enough potential and uses economies to scale that will really change the game.

When we refer to DG, we mean a generating resource that is located on the distribution grid and the generated electricity does not feed back onto the transmission grid. WDG, therefore, is DG that sells all of its generation to the utility (or other purchaser). In future slides, I will refer to the distribution grid as the d-grid.

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*National policies focus on removing barriers for large-scale renewable power facilities and infrastructure. *State and local net-metering policies promote small-scale renewables: ---Net-metering is designed to reduce a utility customer’s electric bills ---Net-metering is not designed for owners of commercial and multi-tenant properties (where tenants pay the utility bills) ---Annual on-site energy use generally caps net-metering project size ---Investors and lenders find a utility customer’s energy savings from net-metering far less attractive than a revenue stream from a stable utility

Germany is the best example we currently have to show the efficacy of CLEAN Programs and the WDG market. If there is any confusion, Germany is in green and California—known as the leading market it the U.S.–is in red. It is astonishing that Germany is adding 11 times more solar than California even though California has a 70% better resource. Rooftop solar in Germany today is priced at the California-equivalent of 7-10 cents/kWh, which would be the most cost-effective resource deployed in California.

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Ground-based solar projects typically generate about 25% more kWh/W than rooftop projects, because they use tracking, which allows the panels to follow the sun throughout the day. The net result is that ground-based projects are generally about 20% more cost-effective than rooftop projects. The difference between the 25% and the 20% is that the O&M costs for ground-based projects are a bit higher due to their moving parts. Although renewables are often said to cause reliability issues, global experience proves this untrue. The German power system, which incorporates enough rooftop solar to meet half the country's midday energy needs, set a global reliability record in 2011 with only 15.31 minutes of downtime. What's even more impressive is that Germany -- the world's fourth largest economy and home to a heavy industrial base -- demands enormous amounts of reliable power, and distributed renewables have delivered…

Significant amounts of PV can cause the grid to de-stabilize due to overvoltage in the system. In this example, 20MW of PV causes overvoltage at noon. However, using DG +IG solutions, including storage and advanced inverters to help regulate voltage, the grid is stabilized even though the 20MW of PV is producing at a high capacity level.

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The California Independent System Operator (CAISO) created the “Duck Chart” to show how high levels of solar could result in system balancing issues starting in 2015 as California approaches the 33% RPS in 2020. CAISO has proposed procurement of “flexible capacity”, especially natural gas, to address the steep ramps and over-generation issues that may occur in the shoulder months as solar comes online in the mornings and tapers off in the evenings.

However, integrating renewables with natural gas is a step backwards from California’s clean energy and GHG goals. Further, the Loading Order requires California to procure low carbon resources before fossil resources.

NOTES: The Duck Chart shows a typical March day, with each line representing a different year, from 2012 – 2020.

The bottom x-axis represents time of day, starting at midnight and ending at midnight. The left y-axis shows net load in MW, meaning load minus wind and solar generation. The chart shows that the shape of the net load curve begins to shift dramatically in 2015 due to increasing solar generation. Potential over-generation shown starting in 2018 in the afternoon as net demand within CAISO territory would be lower than supply of inflexible, conventional base-load resources that are expensive to turn off – such as nuclear and less flexible natural gas…

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The Clean Coalition has developed a model to illustrate how California can integrate renewables in 2020 with dynamic grid solutions.

The red line shows the 2020 net load curve, while the orange dotted line shows the 2013 net load for comparison.

Please note that while the projections of net load on this chart are from the CAISO Duck Chart, the following slides show Clean Coalition’s projections of potential solutions…

First it’s important to remember that the original CAISO chart only includes net load for CAISO territory. Once you remove this limitation, the picture looks much less extreme.

The new Energy Imbalance Market will help to facilitate exports, but we still need a study to determine how much California can rely on exports for resource planning purposes.

NOTES: From CAISO/NERC 2013 report: The potential to export excess generation to neighboring BAs during low system demand periods may be feasible but impractical, because other BAs may need to keep a portion of their dispatchable resources on-line to meet load changes and comply with mandatory control performance standards.

The purple dashed line shows imports/exports of renewables in MWs reflected on the scale to the right.

The dotted red line shows the old net load curve, while the new red line shows how Import/Export helps smooth the ramps in MWs reflected on the scale to the left. Demand response programs can incentivize customers to shift power consumption away from high net demand periods (flattening the head of the duck) and towards low net demand periods (lifting the belly of the duck). The blue dashed line shows demand response in MWs reflected on the scale to the right. The dotted red line shows the old net load curve, while the new red line shows how DR helps smooth the net load profile.

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We recommend that policymakers prioritize identifying DR resources available to address these needs and the necessary pricing to incentivize customer participation. This is necessary since it’s not immediately obvious to policymakers or aggregators which commercial and industrial loads will be available to shift away from the early evenings and towards mid-day hours, and what price signals will be necessary.

For example, electric vehicles can act as a combination of distributed storage and demand response, responding to pricing signals to charge during hours of low net demand and dispatching energy to address high net demand. Since Governor Brown issued an Executive Order that established a target of 1.5 million zero-emission vehicles on the road in California by 2025, the CPUC has found that sending the right price signals to EV owners will be critical. The next step is for California agencies to determine how much demand response with EVs and other loads can modify the net load profile and what programs and pricing will be necessary to accomplish this task.

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Energy storage can similarly charge during hours of low net demand and dispatch energy to the grid when desirable to address high demand, as illustrated by the dashed pink line. It is also an ideal resource for addressing minute-by-minute balancing needs

The dotted red line shows the old net load curve, while the new red line shows how ES helps smooth the net load profile…

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At times, it may be cost-effective to strategically curtail some solar generation to reduce the steep angle of the change in net demand. First, curtail baseload, schedule maintenance during shoulder months.

Solar curtailment costs include increasing solar procurement to make up for curtailed energy to comply with an RPS…

With all solutions in place, the changes in net demand are very manageable.

The dotted red line is the original net load curve, and the solid red line is the new curve once all solutions are delivered. The orange dashed line is the 2013 net load for comparison…

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