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Fernando L. Alvarado Palo Alto, November 7, 2002 PSERC
1
The Impact of a SuperGrid The Impact of a SuperGrid on the Existing Gridon the Existing Grid
Fernando L. AlvaradoThe University of Wisconsin
Workshop on a National SuperGridNovember 8, 2002
Palo Alto, California
Historical Basis for TransmissionHistorical Basis for Transmission
Renewable resources remote from loadHydroelectricity
Thermal generation economies of scale
Reduced transportation (“coal by wire”)
Reliability (pooling of resources)
Interregional exchanges (seasonal, daily)
Jeff Dagle, PNNL
The key questionsThe key questions
What is a SuperGrid?How much transmission do we need?
Why a “Super” Grid?Can’t “conventional” grid expansion be made to
work?
Won’t distributed generation do the job?Won’t proper price signals to generators do the job?
How much will the SuperGrid cost?Who will pay for it and how?What will be the impact on markets?
What technical problems will it solve/create?Will it solve the wrong problem?Will it create new problems?
Fernando L. Alvarado Palo Alto, November 7, 2002 PSERC
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What is a SuperGrid?What is a SuperGrid?
A high capacity transmission network “overlay” over the existing grid
Interface to HV only / at the substation / to the home
using new technologySuperconducting HVDC, MVDC (50 kV range), or
LVDC cables, or AC cables
(DC lines and cables with new converters)
(Compact overhead line designs)
(Low capacitance AC cables)
and grid-arranged for reliability reasonsFlow control issues with DC grids!
Fernando L. Alvarado Palo Alto, November 7, 2002 PSERC
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The “ideal” SuperGridThe “ideal” SuperGrid
would never congest.
would be invisible.
would be lossless.
would cost nothing.
would solve all problems and would create no new problems.
Fernando L. Alvarado Palo Alto, November 7, 2002 PSERC
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In other words it would be…In other words it would be…
an Interstate Highway system for electricity suitable for Interstate commerce Pros of the I-system:
• Faster transportation by car and truck• Increased commerce by truck• Increased safety
Cons of the I-system:• It was expensive to build• It created new types of insidious congestion• It precluded alternative solutions (e.g., trains)
• It increased “dependency on oil” and pollution?• It encouraged urban sprawl• It affected neighborhoods, farms, towns
Fernando L. Alvarado Palo Alto, November 7, 2002 PSERC
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How would the SuperGrid differ from How would the SuperGrid differ from the Interstate Highway system?the Interstate Highway system?
Electricity is fungibleIt can be produced locally
It does not have to be transported
Goods and people are not as fungibleWhen you use the highways to transport a
grandmother, you must deliver the same grandmother at the other end (Shmuelism)
The SuperGrid is only for electricityHighways carry food, people, goods, etc.
The Internet carries voice, pictures, data, etc.
Fernando L. Alvarado Palo Alto, November 7, 2002 PSERC
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How much transmission is How much transmission is needed?needed?
This is the wrong question!
How much transmission makes sense?This is the right question!
Can generation replace transmission?Distributed generation will reduce the need
Deregulation and proper price signals help
Why is “need” a bad question?Why is “need” a bad question?
Need assumes no response to priceNothing is insensitive to price
Other bad questions:How much energy do we need?
How much reliability do we need?
How many cars do we need?
How much health care do we need?
Sure there are minimums to all the above to be able to sustain an adequate human level of comfort, but we must either ask about price or restrict the supply.
Fernando L. Alvarado Palo Alto, November 7, 2002 PSERC
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Justifying transmissionJustifying transmission
There is also uncertainty in cost
Project size
Cost
Benefit
Low costHigh benefitSome risk Medium cost
Medium benefitLow risk
High costNegative benefitMedium risk
Co
st/
be
ne
fit
Fernando L. Alvarado Palo Alto, November 7, 2002 PSERC
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The distribution of benefitsThe distribution of benefits
Not everyone benefits equallyNot everyone benefits!
Fernando L. Alvarado Palo Alto, November 7, 2002 PSERC
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Distribution of benefitsDistribution of benefitsCost
Total Benefit
Individual Benefit
Three parties benefit
One party loses
Co
st/
be
ne
fit
Specifics of benefitsSpecifics of benefits
For consumers on fixed ratesBenefit means a lower (sustainable) tariff for a given
level of consumption*This is not an optimal way to assess benefit
For consumers on real time pricesBenefit means total integrated surplus*
For producersBenefit means an increase in surplus*
Benefit means incentives for expansion
For traders ensuring liquidity and efficiencyBenefit means a sufficient profit to stay in business
(*) Depends on location
Do
Tra
ve
loc
ity
an
d O
rbit
z se
rve
a u
sefu
l pu
rpo
se?
Locational price duration curveLocational price duration curveP
ric
e
Time at price level
And there is a lot ofuncertainty about bothprices and durations!
Average price
Fixed tariff customerssee a benefit only if theaverage price is lower
Impact on consumer surplusImpact on consumer surplusP
ric
e
Time at price level AND percent of low vs. high valued energy
ConsumersurplusHighest
valuedenergy
Lowervaluedenergy
Low valued energy use during high price period will disappear and improve surplus if price signal is given
Fernando L. Alvarado Palo Alto, November 7, 2002 PSERC
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Is a locationally uniform price Is a locationally uniform price the objective of a SuperGrid?the objective of a SuperGrid?
Should electricity cost the same everywhere?
Should gas prices be the same everywhere?
Should real estate cost the same everywhere?
Should all airline tickets cost the same?
I don’t think so
Can generation replace Can generation replace transmission?transmission?
In many cases, yes!Reliability may increase
Voltage regulation may improve
Competition may increase
Transmission siting problems may diminish
Spatial price differences are essentialA completely uniform price at all times:
will ensure a bad spatial distribution of supply
is a signal that we have overbuiltEliminating all congestion would be a very expensive policy
Fernando L. Alvarado Palo Alto, November 7, 2002 PSERC
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Presumed pros of a SuperGridPresumed pros of a SuperGrid
Enable national-level competitionEliminate or greatly reduce market power
Eliminate transmission bottlenecksReduce the impact of bottlenecks is better
Increase system reliability
Fernando L. Alvarado Palo Alto, November 7, 2002 PSERC
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Alleged cons of the SuperGridAlleged cons of the SuperGrid
The costs will be socializedThere will be large cross-subsidies
It will distort markets
It will create new problemsAnd will fail to solve many current problems
It will not generate more power
It will reduce reliability
Do we want the government running the power grid?
Fernando L. Alvarado Palo Alto, November 7, 2002 PSERC
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Why a SuperGrid?Why a SuperGrid?
We have to do something!Transmission is not being builtThe government must help
There are economies of scale and lumpinessMarkets don’t work well in these cases
There is the tragedy of the commonsSome spend, all benefit
There are the jurisdiction issuesNIMBY syndrome
There are market power issuesA SuperGrid would eliminate market power (maybe)
Fernando L. Alvarado Palo Alto, November 7, 2002 PSERC
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Grid utilization trend in New YorkGrid utilization trend in New York
Central East Total East Year
Flow>75% of the time
% of time within 200MW of limit
Flow>75% of the time
% of time within 200MW of limit
1999 1697MW 26% 3375MW 1% 1998 1549MW 35% 3493MW 3% 1997 2285MW 85% 4800MW 7% 1996 2365MW 90% 4800MW 2%
Transmission use appears to be on the declineHowever, not always so in other cases
More “intra-regional” problems surfacingThe supergrid will not address inter-regional issuesLoad pockets, load pockets, load pockets
“Grid utilization” is a bad metric!
Fernando L. Alvarado Palo Alto, November 7, 2002 PSERC
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The persisting need for The persisting need for transmissiontransmission
The historical basis for transmission need remains intact:
Sustainable resources remote from load
(Some) generation economies of scale
Reduced transportation (“coal by wire”)
Reliability (pooling of resources)
Interregional exchanges (seasonal, daily)
Our sustainable resourcesOur sustainable resources
Nuclear
Coal
Hydro
Photovoltaic
Wind
Biomass
Geothermal
Gas turbines/Fuel cells
Spent fuel, safety
Emissions
Environmental impact
Cost, intermittency
Low density
Very low density
Limited sites
Needs hydrogen source
Issues and concernsTechnology
Transmission needs by technologyTransmission needs by technology
Technology Economies Remoteness Fuel transport
Reliability Inter-region
Nuclear Scale Yes Inexpensive Maintenance Yes Coal Scale Yes Expensive Maintenance Yes
Hydro Custom Yes Impossible Water Yes Photovoltaic Production It depends Impossible Insolation Yes
Wind Production Yes Impossible Wind Yes Biomass Custom Yes Expensive Maintenance Yes
Geothermal Custom Yes Impossible Maintenance Yes Fuel cells Production No Pipelines Maintenance No
DERDER
DER can offset local adequacy constraints
Grid security can be enhanced through proper design and operation of DER
Safety considerations properly addressed
Localized voltage support, stability enhancement
Planning takes on a whole new dimensionGrid utilization factors may decrease
Jeff Dagle
Deregulation & markets Deregulation & markets
Deregulation changes grid utilizationCongestion pricing limits peak flows
Flow control (PAR, FACTS, DC) increase use
Inter-regional price differences are the result of grid congestion (and losses)
Nodal pricing makes results unintuitive but efficient
Reliability has become a concern
Regulatory and governmental stability essential to foster investment
“Tragedy of the commons” issues
Fernando L. Alvarado Palo Alto, November 7, 2002 PSERC
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Impact on the current gridImpact on the current grid
It will depend on specific features and SuperGrid technology details
Are flow controls possible/easy?
What is the consequence of a fault?
What is the effect of a component failure?
How likely is a component failure?
Can failures cascade?
Will it allow us to “split the grid”?
Replace (yes, replace) many HVAC lines with newtechnology superconducting high capacity linesand split the system into separate AC islands?
Fernando L. Alvarado Palo Alto, November 7, 2002 PSERC
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Likely Supergrid FeaturesLikely Supergrid Features
Large capacity
True grid (vs. point to point) but with few large interconnection points
Limited redundancy due to high cost
Underground – failures could persist for extended periods
Less likely to congest, butDid Interstate roads eliminate congestion?
Fernando L. Alvarado Palo Alto, November 7, 2002 PSERC
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SuperGrid “Limitations”SuperGrid “Limitations”
Each connection point equivalent to a large power plant or a large load
“Load pockets” are complex, nested and interacting
The SuperGrid is unlikely to resolve all load pocket issues
DER can help with load pockets
Targeted projects can also help (Neptune?)
Proper price signals help with load pockets!
Fernando L. Alvarado Palo Alto, November 7, 2002 PSERC
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Other current-grid issuesOther current-grid issues
Impact on short-circuit duties and stability must be considered
Common-mode failure possibilities must be considered
Since electricity prices are not the primary determinant of (most) personal and business activities, the possible impact of shifting patterns must be considered
Fernando L. Alvarado Palo Alto, November 7, 2002 PSERC
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Additional technical issuesAdditional technical issues
What will it really look like, in detail?Inter-regional island connectivity only?
Will it be an overlay or a replacement?
Will it be used for high capacity lines only?
Will it be used all the way to substations?
Will it be used all the way to customers?
How do we design the “connection points” for the SuperGrid?
Inverters/rectifiers into a synchronous grid?
Converters into radial parts of the system?
Are connection points bidirectional by design?
Fernando L. Alvarado Palo Alto, November 7, 2002 PSERC
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Additional concernsAdditional concerns
“Big brother” issues
It will produce no new MWs
Congestion will just move around
It will not solve the load pocket problem
Will it increase or lower reliability?
And the most important question of all:
who pays for it and how
ConclusionsConclusions
Traditional reasons for a grid still herePooling resources, interregional exchanges, etc.
Central generation (coal, nuclear) and renewable (hydro) key to the supply portfolio beyond 2020
SuperGrid economic justification is essentialGoldplating will result in inter-regional subsidies
Subsidies lead to inefficiencies
The design details are important and need study
Load pockets and other problems will persistEconomic signals needed to deal with them