By - Jim Vess

Markets with high levels of renewable generation show ways to maintain grid stability

Energize Weekly, March 28, 2018

As wind and solar generation grow, so too have questions about their impact on the reliability and resiliency of the grid. However, a study of markets around world with high levels of renewables has identified keys to keep the systems up and running.

The question of grid resiliency gained added heft when U.S. Secretary of Energy Rick Perry raised it in his call for federal power regulators to give subsidies to financially ailing coal-fired and nuclear power plants—arguing that such baseload generation was needed.

“A diverse mix of power generation resources, including those with onsite reserves, is essential to the reliable delivery of electricity,” Perry said in seeking approval from the Federal Energy Regulatory Commission (FERC), “particularly in times of supply stress such as recent natural disasters.”

FERC rejected the proposal, ruling that it was not compatible with the operation of wholesale markets, and critics argued it was a ploy to bolster troubled plants and undermine renewable generation and that the resiliency-reliability issue is a ruse.

“Fossil fuel firms have spun a false narrative around the supposedly negative impacts of renewables growth on electric reliability and affordability,” according to an analysis by the Institute of Energy Economics and Financial Analysis.

Still, FERC agreed the Trump administration had identified an important reliability issue and said it would seek to deal with it.

The institute study, Power-Industry Transition, Here and Now, looked at nine countries and markets with levels of wind and solar up to 10 times the worldwide average and how they managed performance, reliability and resiliency.

“We show that grid operators can assure security of supply at levels of wind and solar power of at least 50 percent of total generation by boosting system flexibility and grid interconnection and by ensuring strong price signals,” the report said.

The global average for wind and solar generation on the grid is 5 percent, rising to 13 to 34 percent by 2040, according to the International Energy Agency. The renewable load in the countries and markets reviewed in the study were:

  • Denmark – 52.8 percent
  • South Australia – 48.4 percent
  • Uruguay – 32.2 percent
  • Germany – 26 percent
  • Ireland – 24.6 percent
  • Texas – 18 percent
  • California – 15 percent
  • The Indian state of Tamil Nadu – 14.3 percent

While the study identified a variety of initiatives and polices that helped sustain high levels of renewable generation, there were three key areas in managing renewable generation: improved transmission, interconnections to other countries or markets and effective market design to send the appropriate price signals.

Texas, for example, embarked on transmission development projects, with 3,600 miles of transmission lines, to carry 18,500 megawatts (MW) of wind power from western wind farms to the more populated eastern section of the state.

Costly curtailment of generation—taking wind turbines offline when they produce more power than can be consumed—fell from 17 percent in 2009 to 0.5 percent in 2014. In addition, even under extreme weather events such as Hurricane Harvey in 2017 and a severe cold snap in 2018, there was “no degradation in system reliability,” the report said.

Germany is facing a long-delayed transmission upgrade between the windy north and the populated south with its higher electricity demand, and as a result, had a curtailment rate of 4.5 percent in 2016, which cost $794 million, the report said.

In contrast Denmark has near-zero curtailment, even though it has the highest amount of wind power per capita in the world, due to grid interconnections to markets like Sweden, Norway and Germany, the study said.

Market design can help boost flexible backup and manage demand. Ireland, for example, is introducing real-time balancing and intraday markets to create price signals to potential investors in flexible generation, demand-side response, and storage, aiding the development of a more flexible grid to respond better to increased renewables penetration.

The institute’s analysis focused on existing and proven management techniques and technology, and emerging technologies were not considered. “But we note that battery storage is an emerging solution,” the report said.

In September 2016, about 850,000 customers in South Australia lost their electricity due to tornados that set off cascading events. About 456 MW of wind power went offline, leading to a surge in power imports, which in turn tripped offline the interstate interconnector leaving South Australia in the dark.

In the wake of the blackout, battery storage was added to complement wind farms. “South Australia now appears to be a world leader in major grid-scale and residential battery deployments, with at least five completed or announced installations at the time of writing,” the study said. “Regarding completed projects, the 315 MW Hornsdale wind farm in late 2017 installed a 100 MW lithium-ion battery – at the time the world’s biggest – to provide frequency control, as well as other grid balancing services.”

The nine strategies, polices or investments that the study found bolster resiliency and reliability in high-penetration renewable generation grids were:

  1. Timely investment in the transmission grid: Texas is the lead example of a highly organized program of transmission network investment connecting wind farm regions with cities.
  2. Boosting transmission interconnections and cooperation between neighboring countries and power markets: In 2014, the California Independent System Operator (CAISO) and PacifiCorp launched the Western Energy Imbalance Market, which extended into seven states, the area that CAISO could call upon to balance variability in demand and supply, thus reducing renewables curtailment.
  3. Ensuring flexibility in domestic generation: In Uruguay, domestic hydropower provides flexibility for wind generation that has grown more than thirtyfold in the past five years.
  4. Market reform to boost flexible backup: Ireland is in the process of introducing real-time balancing and intraday markets to provide important price signals to potential investors in flexible generation, demand-side response, and storage, aiding the development of a more flexible grid to respond better to increased renewables penetration.
  5. Supporting demand-side flexibility: Following a one-in-a-100-year storm that caused a statewide blackout in 2016, South Australia devised an energy plan backing new sources of flexibility, including 1,000 MW of contracted demand-side management.
  6. Better wind and solar forecasting: In Spain, modeling advances at the national wind power forecaster, SIPREOLICO, have halved day-ahead forecasting errors.
  7. Enhancing the responsiveness of the distribution grid: Germany has changed grid codes for household solar inverters to make them responsive to variations in grid frequency and thus stabilize the grid, while avoiding any prospect of sudden, large-scale disconnection.
  8. Making renewables more responsible for grid balancing: Beginning this year, wind power aggregators in Denmark will have to provide firm power from across their portfolios, including the oldest turbines, meaning they will pay for inaccurate forecasts.
  9. National leadership: India’s ambition to drive fivefold national growth in variable renewables over the next decade has spurred initiatives such as its Interstate Green Power Corridor, favoring local integration of solar power in the state of Tamil Nadu.

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