Improving the Integration of Renewable Energy

1. Improving the Integration of Renewable Energy Jay Apt Michael Dworkin Carnegie Mellon University Vermont Law School NARUC Committee on Energy Resources and the Environment July 22, 2013

2. Who we are and why we are here • Prof. Michael Dworkin, Professor of Law and Director of the Institute for Energy & the Environment, Vermont Law School and former General Counsel (1988-1995) and Chair of the Vermont Public Service Board (1999-2005). • Prof. Jay Apt, Professor and Director of the Carnegie Mellon Electricity Industry Center, Carnegie Mellon University; Director of the RenewElec Project. Commissioner Fox has asked us to brief the Committee on results from our 3-year RenewElec project.

3. The RenewElec Project • A dispassionate systems approach to the issues surrounding a much expanded role for variable & intermittent renewables. • Considers and anticipates the many changes in power system design and operation that will be required to make high market penetration possible. • A broad consideration of the technical and regulatory responses to those issues.

4. Paul Hines Michael Dworkin Jay Apt Paulina Jaramillo Granger Morgan Paul Fischbeck Gabriela Hug Stephen Rose Funding: Doris Duke Charitable Foundation RK Mellon Foundation Department of Energy Electric Power Research Institute Heinz Endowments National Science Foundation Image: Google Earth

5. Historical Electricity Generation

6. Renewable Electric Generators • Wood: largely in pulp & paper mills as co-generation from the chemical process used to make paper. • Other biomass: • mill wood waste, used along with coal in 9 US power plants. • Municipal solid waste-to-energy. • Landfill methane. • Geothermal: heated water from underground magma piped to the surface and used in steam generation of electricity.

7. Renewable Electric Generators • Wind: at 7 to 9 cents per kWh, one of the least costly low-pollution electric generators. • Solar: • Photovoltaic (solar panels) • Solar thermal (concentrated solar with mirrors to heat a fluid that then heats water to steam used in a generator) • Utility-scale PV produces power at 15-20 cents per kWh. • If installed prices fall 40%, PV can match the current price of wind.

8. Can Renewable Portfolio Standards be met?

9. Solar

11. Can Renewable Portfolio Standards be met? The vertical scale is 20 times smaller than in the wind figure Green and red markers indicate the status of the Federal production tax credit (PTC) supporting wind projects and the investment tax credits (ITC) supporting solar projects.

12. Can Renewable Portfolio Standards be met?

13. The Character of Wind & Solar Generation 10 Days output of 6 Wind Turbines

14. The Character of Wind & Solar Generation 10 days output of 1,500 Wind Turbines

15. The Character of Wind & Solar Generation A utility-scale solar PV plant (10 second time resolution data)

16. What we have learned that can improve grid integration of wind & solar

17. Wind and solar plants’ variability is notequally strong at short & long times. • If it were, the grid would need a lot of very fast-adjusting power to compensate. • But, we found that the fluctuations are a thousand times larger at long periods than at short, so slow fossil fuel plants can compensate, and very few batteries are needed. Wind Solar PV

18. What frequencies are present, and at what strength?

19. We can learn some importantthings from the power spectrum

20. Smoothing by Adding Wind Farms

21. Smoothing by Adding Wind Farms

22. Smoothing by Adding Wind Farms Source: Katzenstein, W., E. Fertig, and J. Apt, The Variability of Interconnected Wind Plants. Energy Policy, 2010. 38(8):4400-4410.

25. Two implications from this • When we talk about smoothing, the time scale is very important: 12 hours has much less smoothing than 1 hour. • The point of diminishing returns from connecting wind plants together is quickly reached.

26. Smoothing by adding wind farms in ERCOT… has diminishing returns Source: Katzenstein, W., E. Fertig, and J. Apt, The Variability of Interconnected Wind Plants. Energy Policy, 2010. 38(8):4400-4410.

27. Larger areas BPA MISO CAISO ERCOT

28. Large-scale transmission is not required to smooth wind’s variability • Connecting many states together does increase the firm power capacity provided by wind, but the transmission construction costs are higher than building a natural gas plant to get the same benefit.

29. Wind and solar thermal are much less expensive to integrate than PV • Concentrating solar thermal systems have much lower variability than do solar PV systems, and so compensating for their fluctuations is less expensive. Photo: Solar Industries Association

30. Wind Forecasts • Forecasts of wind power under-predict wind during periods of light wind, and over-predict when the wind blows strongly. • We developed a simple mathematical model that allows grid operators to accurately and easily account for wind power forecast uncertainty

31. Day-Ahead Reserves Required by Wind We have developed methods to compute the additional generation that must be standing by in case the wind does not follow its forecast. (ERCOT wind forecast errors are less than in MISO)

32. Storage A very small complement of batteries can remove a great deal of variability from wind power. A few batteries can greatly increase the amount of wind that can be integrated economically.

33. Batteries

34. Storage Flywheels and super capacitors could also support the integration of variable resources in small grids.

35. Large-Scale Storage (example: PJM) • Storage benefits customers by • Reducing costs at high-load hours. • Allowing some peakers to be decommissioned, lowering capacity market prices. • Total consumer benefits approach $4 billion annually, equivalent to 10% of sales on the PJM day-ahead wholesale energy market.

36. Large-Scale Storage (example: PJM) • Total consumer benefits approach $4 billion annually, equivalent to 10% of sales on the PJM day-ahead wholesale energy market. • However, generators lose revenue and storage operators cannot make enough profit from arbitrage. • Thus, market rules are currently not aligned with maximizing consumer benefits.

37. Batteries in vehicles • The energy storage capacity of Chevrolet Volt and Nissan Leaf vehicles sold through May 2013 has already exceeded 1 GWh.

38. Batteries in vehicles But battery vehicles are unlikely to be widely used in grid storage because their owners don’t profit.

39. Curtailing Wind Power • Creating a reserve of power by curtailing wind turbines (mandated in some countries) is generally more costly than other ways of stabilizing the electrical grid.

40. Hurricane Risk to Offshore Wind • Hurricanes pose surmountable risks to offshore wind turbines. • Small changes, such as having emergency power to turn the nacelle into the wind, can dramatically improve the survivability. IEC design standard

41. Hurricane Risk to Offshore Wind • Hurricanes pose surmountable risks to offshore wind turbines. • Small changes, such as having emergency power to turn the nacelle into the wind, can dramatically improve the survivability. • We quantified the riskier and safer areas to build

42. Hurricane Risk to Offshore Wind • If it takes a year to fully rebuild a hurricane-damaged offshore wind farm in Texas, the 100-year return period hurricane will take out ~10% of Texas offshore wind power.

43. Fossil Plant Emissions to followWind and Solar • Because of the extra emissions from ramping and operating at their lower operating limit, displacing coal and natural gas plants with wind or solar does not give a 100% reduction in emissions. • You get about 90% of the expected reductions if coal plants are used to compensate for variability • And about 80% if natural gas plants are used (partly due to their higher minimum operating limit). GE and Siemens both have new turbines.

44. Research Results Where are the greatest benefits fromWind & Solar? If the goal is reducing pollution, it is MUCH better to locate wind and solar in the mid-Atlantic states than in the southwest.

45. Decommissioning • Study comparing the decommissioning regulations of oil and gas wells and wind turbines at the federal, state, and county level revealed: • Oil and gas bond requirements for permit to drill set in 1951 and 1960 • Have not since been adjusted for inflation or to reflect true costs of decommissioning • Wind turbine bonding requirements set in 2010 • State bonding requirements for oil and gas wells and wind turbines are generally greater than federal requirements • Bonds are still insufficient to meet the actual costs of decommissioning; oil and gas more deficient than wind

46. Decommissioning • The BLM recently (2010) promulgated regulations for wind bond requirements, whereas the BLM’s bonding regulations for oil and gas wells were set and have not been updated since the 1950s and 1960s • Consequently, federal regulations for bonding requirements impose a greater burden on wind projects than oil and gas projects • The insufficiency of oil and gas and wind project bonding requirements will likely render inadequate environmental protection “In order to adequately integrate renewable energy, the policy environment must ensure that wind projects are constructed, operated, and retired in an environmentally sensitive manner, and that the cost of doing so does not disproportionately disadvantage the facilitation of renewable energy.”

47. Decommissioning The Electricity Journal, Vol. 25, Issue 1 (2012), Comparative Analysis of Conventional Oil and Gas and Wind Project Decommissioning Regulations on Federal, State, and County Lands.

48. Transmission • Integrating large amount of renewables in remote locations will likely require transmission investments • Recognizing this, FERC recently required that transmission planners consider public policy in planning projects • Including RPS requirements and other state laws designed to encourage renewable energy development • This requirement could be a boon to wind developers looking to develop remote resources • May also have a negligible impact as requirement is only to consider public policy in transmission planning. Credit: DailyYonder.com – Julianne Couch

49. Related Work • RenewElec • IEE at Vermont Law has looked into current transmission cost allocation methodologies and found them mostly consistent with FERC requirements under Order No. 1000 • Force Majeure • Under Decision Making banner, IEE and CMU are studying the impact of climate change on contract law, specifically the Force Majeure doctrine as it related to the impact of hurricanes on the energy industry.