RENEWABLE ENERGY INTEGRATION: LESSONS FROM ISLAND GRIDS

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American Bar Association/New Jersey State Bar Association

Panel Discussion

September 24, 2013

Clinton Climate Initiative: Islands Diesel Reduction Program

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Free advisor to governments to support implementation of renewable energy projects

Provide commercial, financial and legal advice

Supporting geothermal, solar, wind, biomass, distributed generation and efficiency projects

Working with 20 island governments worldwide, including the Pacific and African/Indian oceans

Islands at the Forefront: Power Prices & Climate Vulnerability

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POWER PRICES

90-100% of power generated from diesel

Power price typically ~ $0.40/kWh; can be over $1.00/kWh

Power costs are prohibitive for many businesses

Contribute to crippling levels of national debt – 140% of GDP in Jamaica

CLIMATE VULNERABILITY

Sea-level rise threatens low-lying islands

Hurricane Ivan (2004) destroyed nearly 90% of housing stock in Grenada

Ocean acidification impacting ocean-based industries

Islands also at the forefront of demonstrating renewable energy penetration

Kiribati, Image by Ciril Jazbec

Vision: High Renewable Penetration

October 2012: Tokelau became 100% powered by renewables

1MW of solar coupled with storage

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Renewable energy: “The 4th Industrial Revolution”

Objectives of Renewable Energy Integration Achieve high penetration of renewables with consideration for cost, efficiency, and existing infrastructure

Successful integration of intermittent renewables will maximize use of renewable and traditional assets:

- Renewable generation is used – not curtailed or dumped

- Traditional assets not required to do expensive idling or ramping

- Use most efficient “tool in the toolbox” for required services

Storage as a solution for intermittent resource integration:

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Service Storage application

Frequency regulation Battery projects under development provide frequency regulation in PJM

Ramp control Technical requirements in Puerto Rico require PV facilities to limit ramping to 10% of nameplate capacity per minute, requiring energy storage

Load (supply) shifting Batteries in Tokelau allow use of solar power at night

Case Study: Bonaire’s wind, battery and diesel system

Challenge

Generators destroyed by a fire in 2004

Government goal to generate power 100% from renewable sources

Population: ~16,000

Peak demand: ~12MW

Annual load: ~80,000MWh

Solution

International tender in 2006 for whole-island system including >50% wind penetration

Installed wind, diesel, battery system in 2010:

- 10.8MW wind (Enercon)

- 14MW diesel (5x 2.8MW generators)

- 3MW battery (Nickel-Cadmium, Saft Batteries)

Wind penetration typically near 75%

System of cost of $60mm; expected reduction in power prices by 10-20%

Battery provides:

- Frequency regulation (50hz system)

- Ramp control: can provide 3MW for up to 2 minutes to allow diesel to come online

- “Dump load” management: kept at 90% charge to allow it to absorb and dissipate excess generation as needed

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Case Study: Hawaii, US Leader in Renewable Energy Integration

Challenge

Most oil dependent state in the nation: Imported oil supplies 90% of energy (transport and electricity)

Spend $7bn per year outside of Hawaii to meet energy needs

Excellent endowment of intermittent renewable resources, particularly wind

Solution

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Resource Optimization Underway

Maui Electric currently using 91% of available wind energy, up from 72%

Higher levels can achieved with changes to utility equipment and operating practices (NREL):

- June 2013 PUC order requires Maui Electric to lower fuel costs and reduce curtailment of wind

- Maui Electric plans to achieve 95-98% available wind energy utilization

Hawaii Clean Energy Initiative goal of 70% clean energy by 2030, 40% from renewables

Maui has achieved renewable integration success:

- 200MW daily average peak load

- 72MW of wind capacity with 23MW of fully incorporated battery storage that provide frequency regulation and ramp control

- 37MW of distributed PV

- Three smart grid demonstration projects underway with $64mm of funding

- Renewables represented 21% of Maui Electric’s generation at the end of 2012

Select North American RTO Activities on Storage CAISO

- CPUC proposes to require 1.3GW of storage by 2020 from IOUs

- Proposes to use a reverse auction for procurement

ERCOT

- Wind made up 7.4% of generation in Texas in 2012; panhandle wind is typically off-peak, shoulder

- Currently rely mostly on wind forecasting and generator ancillary services for integration

- Duke’s 36MW Notrees Wind Storage Demonstration project commissioned in March 2013

Ontario

- Low carbon energy mix: 56% nuclear, 22% hydro, 15% gas, 3% wind and 3% coal generation in 2012

- Advocacy groups seeking to have storage incorporated into long-term planning to optimize grid

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The Atlantic Wind Connection and PJM Atlantic Wind Connection impact

Would be able to connect 7GW of offshore wind to PJM, or 3.8% of the 2012 PJM capacity

60GW of offshore wind potential on Mid-Atlantic outer continental shelf, or nearly one third of 2012 PJM capacity

Possible PJM approach:

Embrace energy storage as a versatile and efficient technology solution for renewable energy integration

Take early-mover position in an emerging sector that stands to revolutionize the power industry in the low-carbon market

Continue to optimize market for ancillary services provided by storage projects

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Thank you!

Libby DeLucia

Associate | Clinton Climate Initiative

Clinton Foundation

77 Water Street, New York, NY 10005

Direct: 917-720-0279 | Mobile: 857-939-6446

edelucia@clintonfoundation.org | www.clintonfoundation.org

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Tokelau, www.tourist-destinations.com