Connecting Renewable Generation To A Transmission Grid

A New Market Structure for Integrating Stochastic Renewable Generation in a Transmission Grid

Stephen Lee

Senior Technical Executive

Power Delivery & Utilization, EPRI

[email protected]

November 2008

2© 2008 Electric Power Research Institute, Inc. All rights reserved.

Outline

• Mandatory penetration of wind power may not be economical

• High penetration of wind power will create higher risk of blackouts

• How to prevent these problems? A New Market Structure

• Port of Entry + Storage

• Virtual Service Aggregator Balancing Authority

• CO2 Charge and Public Benefit Funds

• Conclusions


United States Renewable Mandates

Solar water heating (SWH) eligible


Mandatory penetration of wind power may not be economical

• Utilities are forced to buy whatever amount of wind energy produced under the mandate

• No cost penalty is placed on wind power for backup capacity, load following, operating reserve, frequency regulation

• Transmission companies have no incentive to build new transmission to integrate wind power

• Storage plants are considered power plants and are not profitable to build

• Transmission companies have no incentive to build storage plants


Existing 765 kV

New 765 kV

AC-DC-AC Link

Our Nation’s Future Requires an EHV Interstate Transmission System.


High penetration of wind power will create higher risk of blackouts

• Raw wind power entering the grid at many entry points will create widely varying power flows across the grid

• Extensive system frequency excursions and unusual flow patterns will create more blackouts

Source: California ISO

Tehachapi Wind Generation in April – 2005

0

100

200

300

400

500

600

700

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Hour

MW

Average

Each Day is a different color.

Day 29

Day 5 Day 26

Day 9

Could you predict the energy production for this wind park either day-ahead or 5 hours in advance?


Impacts on Spinning Reserves and Ramping Requirements

• E. ON Netz operates German transmission network

– 7+ GW installed wind capacity

– 21+ GW peak system load

Source: E. ON Netz 2004 Wind Report

Source: E. ON Netz 2005 Wind Report

Dec. 24, 2004 – aggregate wind power falls from 2004 max 6,024MW to <2,000MW in 10 hrs (avg. 7 MW/min).

Nov. 19, 2004 – aggregate wind power drops 3,640 MW in 6 hrs (10 MW/min.)


Load Following, Operating Reserve, Unloadable Generation

Installed Wind Capacity

Need Operating Reserve

Need Unloadable Generation

Need Unloadable Generation

Need Operating Reserve

0 Time

? MW/hr


Methods of Coping with Wind Uncertainty

• Short-Term– Better wind forecasting– Carry more operating/spinning

reserve and unloadable generation to handle up and down ramps of wind output

– Rapid coordination with demand response and energy storage

• Long-Term– Build more energy storage, e.g.,

Compressed Air Energy Storage (CAES)

– Controllable demand response– Holistic planning of transmission,

generation and demand

0

50

100

150

200

250

300

350

Sep06 1

2:0

0

Sep06 1

4:2

4

Sep06 1

6:4

8

Sep06 1

9:1

2

Sep06 2

1:3

6

Sep07 0

0:0

0

Sep07 0

2:2

4

1-min MW

fcst 1

fcst 2

fcst 3

Potential wind curtailment

CAES


Large Scale Renewable Integration in Free Market and Mandate Environment

Grid Operations & Planning(Visualization, tools, monitoring, reliability assessment methods)

Balancing Resources

(Energy Storage, Demand Response, Fast

Acting CT, Hydro etc.)

Transmission Technologies

(Adv. Conductors, HVDC for wind, Advanced

FACTS)

Grid Interface Technologies

(Interface, Control, Ride Through Technologies)

Reliably and Cost Effectively Integrate High Penetration of Intermittent Generation with the Grid


Port of Entry for Large Scale Renewables

• Restrict large scale renewables to connect to the grid only through ports of entry

• Provide large scale energy storage at ports of entry

• Dispatch storage to maintain steady power flow into the grid

• This reduces transmission investment

End-uses & DR

Distribution SystemTransmission System

Energy Storage

Power Plants

Renewable Plants


Potential Role of the Virtual Service Aggregator Balancing Authority

TraditionalPower Plants

TraditionalPower Plants

RenewableResources

RenewableResources

EnergyStorage

EnergyStorage

TransmissionGrid

TransmissionGrid

Real RegionalControl Center

Real RegionalControl Center

VirtualService

Aggregator

Σ

VirtualService

Aggregator

Σ

End Usesand

DistributedResources

End Usesand

DistributedResources

FinancialSettlement ofNet Difference

Power Flow

FinancialTransaction

• Owns or contract for:

• Portfolio of renewablesstorage, or traditionalpower plants

• Portfolio of customerswith distributed resources

• SCADA and Area Control


Virtual Service Aggregator Balancing Authority

• Direct measurements and control of

– All generation and storage sources in its portfolio

– All customer demand in its portfolio

– All distributed generation or storage in its portfolio

• Maintenance energy balance like a Control Area

• Area Control Error charged by the ISO/RTO

• Separate SCADA and control system

• Integrated with the main EMS of ISO/RTO


UDi-ism (Unity in Diversity)

• Diversity means the exercise of an individual’s right of free choices.

• Unity in Diversity means creating unity while preserving diversity, or allowing diversity to achieve unity

• Hypothesis –

– Align an individual’s selfish incentive more with the socially optimal objective

– Then the creative energy of individuals would achieve the social objective.

“An Effective Pricing and Financial Method to Significantly Reduce CO2Emissions from Electricity Production – An Application of the Third WayEconomic System of Unity-in-Diversity”, IEEE PowerCon 2006, Chongqing


CO2 Price Sensitivity of Electric Generation Market Shares with Oil Price at 60 $/bbl, Coal Price at 4 $/MBTU and

Wind/Solar w Storage at 5000 $/kW

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

$-

$5

$10

$

15

$20

$

25

$30

$

35

$40

$

45

$50

$

55

$60

$

65

$70

$

75

$80

CO2 Cost ($/ton)

Mar

ket

Sh

are

Wind/Solar w Storage

CT

IGCC

Comb Cycle

COAL

Nuclear



Flow of Money for Cap and Trade System

Green Power Plant Non-compliant Power Plant

Exchange

$

Allowance Certificates

$

Electricity ConsumersElectricity

$$

Electricity


Exchange

$

Allowance Certificates

$


$$

Electricity

Another potential financial bubble


Flow of Money for UDI-ism CO2 Charge


Trustee ofCO2 Charge

0 or Low $ High $


$$

Accountable to International Agreements

Electricity

Rebate incentives and Electricity subsidies


Trustee ofCO2 Charge

0 or Low $ High $


$$

Accountable to International Agreements

Electricity

Rebate incentives and Electricity subsidies


How Is It Different from a Carbon Tax?

• Global CO2 emissions would drop from today’s 13,000 million tons per year to less about 4,000 million tons, when the optimal generation mix is finally achieved for the CO2 cost of $30/ton

• The CO2 charge would be based on scientific or market value for the social cost of CO2 - not a fixed or static tax rate

• Revenue from the CO2 charge goes into a Public Benefit Fund.

– Managed by independent trustees

– Can assist low income electricity customers

– Can be used to clean up environment

– Can be treated as an investment account in the name of the electricity customers, which grows in value

– Money may become a social safety net for unemployment and retirement


Conclusions

• Free market capitalistic countries

– May not allow the restriction of a Port of Entry

– Will likely allow virtual service aggregator

– May not force virtual service aggregator to be balancing authority

– Will likely adopt Cap and Trade

• Would a more economical and more reliable power system result from:

– Ports of Entry

– Virtual Service Aggregator Balancing Authority

– CO2 charge with Public Benefits Funds


Industry Demonstration 2008-2012: CAES

CT Module

Exhaust

Air

Compressor

Combustion Turbine

Motor

• Storage

Air

Intercoolers Recuperator

Fuel

Expander

Storage

Heat RateEnergy Ratio

38100.70

Constant Output Pressure Regulation Valve

Demonstration and Validate Performance of Advanced Design Underground and Above Ground CAES Plant


Underground and Above Ground CAES

Underground CAES

– Assess and Demonstrate Porous Rock/Aquifer Storage

– Plant Size: Above 300 MW

Above-Ground CAES

– Assess Economic Feasibility of Pipe- and/or Vessel-Based Above- Ground Air Storage

– Assess corrosion impact of cycling temperature and pressure

– Plant Size: 10-20 MW with 2-3 hours of storage

Demonstrate advanced design and assess its performance for under- and above-ground CAES

Technology

Connecting Renewable Generation To A Transmission Grid