Report: Cost For ERCOT and Xcel to Integrate Wind and Solar is Less Than Expected

Wind and solar power comes and goes with the weather, and requires new technologies and techniques to smoothly integrate into power grids that must keep supply and demand in perfect balance at all times. The potential high costs and reliability challenges of this integration have become a central argument against the coal power phase-outs and increasing reliance on renewables called for in the Obama Administration’s Clean Power Plan.

But the experiences of wind-rich Texas grid operator ERCOT and Colorado utility Xcel Energy show that this balance can be accomplished at relatively low cost, compared to the dire projections we’re seeing from groups that say the grid can’t handle the growth. That’s according to a report released Wednesday by the clean energy business advocacy group Advanced Energy Economy, which found that these two entities have “managed to successfully integrate increasing amounts of variable renewable energy resources at costs that have generally been small to modest.”

“For example, ERCOT estimated the cost of integrating its first 10,000 megawatts of wind, approximately the capacity currently deployed, to be about $0.50 per megawatt-hour of wind generation,” the report stated. That’s far below the estimates from different utilities and grid operators for wind penetration levels below 20 percent of peak load, which lie between $2-$5 per megawatt-hour to as high as $6-$11 per megawatt-hour, according to the analysis by The Brattle Group, which prepared the report for AEE.

The report didn’t count the investments that ERCOT has made into new transmission lines to carry far-off wind power to population centers, which is a significant part of wind integration plans for Texas and many other parts of the country.

But with the right policy changes and technology advances, “integrating variable renewable energy at penetration levels of 10-20 percent on average and at times above 50 percent – i.e., high relative to the current levels in most of the United States – is possible,” the report stated.

These findings are backed up by the experience of European countries like Denmark and Germany, which have been handling 50 percent-and-above levels of wind and solar power on their grids. In the U.S., the National Renewable Energy Laboratory (NREL)’s Western Wind and Solar Integration Study has indicated that “integration of large amounts of wind energy, up to 30 percent of total generation, is technically and economically feasible, with integration costs generally less than 10 percent of the cost per megawatt-hour of wind and often significantly less,” according to Wednesday’s report.

The Brattle Group chose ERCOT and Xcel as case studies because of their large amount of wind power — nearly 12,500 megawatts for ERCOT, and 2,168 megawatts of wind capacity connected and another 450 megawatts on the drawing books for Xcel as of 2013. Also, unlike Denmark and Germany’s wind-rich grids, Texas and Colorado’s systems are largely isolated from surrounding systems, which limits their ability to rely on the energy flexibility of those neighbors during times of grid stress.

Even so, over the past half-decade or so, both organizations have managed to adapt, Matt Stanberry, director of industry analysis for Advanced Energy Economy, said in an interview — a fact that bodes well for other grid operators and utilities worried about the costs and reliability impacts the Clean Power Plan could bring.

“The levels of renewable penetration folks have talked about under the Clean Power Plan are actively being implemented across the country in successful, reliable grid operations,” he said.

For example, both ERCOT and Xcel have introduced changes to their ancillary services programs that manage short-term mismatches between electric supply and demand, to allow fast-ramping gas-fired generation, demand response, energy storage, and even wind farms themselves, to play in those markets. ERCOT’s adaptations include new programs that allow a broader set of fast-responding grid resources to play into its grid-balancing markets, to help it manage its growing share of renewable power and the coming retirement of gigawatts of coal plants. The creation of ERCOT”s Nodal Market, with locational marginal prices (LMPs) that tie local grid conditions to the value of electricity delivered to them, and its move from 15-minite to 5-minute dispatch of power, have also helped.

As for Xcel, it has created a 30-minute reserve guideline to cover moments when its baseload is being served almost entirely by wind, and is seeking changes to its Open Access Transmission Tariff to procure more ancillary services and recover the costs. It has also hooked up two-thirds of the wind turbines in its territory with Automatic Generation Control (AGC) systems to keep them constantly connected to the utility’s grid operations centers, and allow them to provide grid-balancing services themselves — something that grid operators PJM and NYISO are allowing eligible wind farms to do as well.

Both have added improved weather forecasting, which is a big deal when so much power is coming from ever-shifting wind patterns. ERCOT is deploying a Large Ramp Alert System using probabilistic wind forecasts for the next six hours updated every 15 minutes, and Xcel’s wind forecasting system has reduced its mean absolute error (MEA) in predicting wind speed by 38.7 percent from 2009 to 2013, the report noted.

ERCOT has also reworked its methods of calculating the value of wind and solar resources for overall grid stability, using past data to true up just when they’re generating power in tandem with grid needs, as compared to their nameplate capacity. The technique for determining this relationship is called Effective Load Carrying Capacity, and until last year, ERCOT used a standard 8.7 percent ELCC figure for wind turbines across the state, meaning they could be expected to provide just that amount of their total generation capacity during times of peak seasonal power demand.

But by using historical data of how actual wind generation matched up to system needs, ERCOT found that its coastal wind farms were providing between 36 percent and 56 percent of their nameplate capacity toward the grid’s reserve margins, and inland wind farms were providing 12 percent to 19 percent of nameplate to reserve margins, during winter and summer peaks, respectively. That in turn has allowed ERCOT to increase its expected reserve margins for future years, providing more headroom for safe growth in energy demand.

To be sure, new transmission lines will be a part of the solution, and those come at a high cost. Texas’s Competitive Renewable Energy Zones legislation has led to about $6.9 billion in new transmisison investments in the state, and reduced the amount of West Texas wind that needs to be curtailed from levels as high as 17 percent in 2009 to less than 2 percent in 2013, according to the report. AEE didn’t include transmission as a direct cost for wind integration in ERCOT, however, because the power lines also serve a multitude of other valuable purposes, and can’t be considered solely as a wind-boosting investment, Stanberry said.

But there are new technologies on the horizon to improve the efficiency of long-distance transmission on behalf of wind integration, the report noted. For example, ERCOT has pilot programs underway to test dynamic line rating (DLR) technologies, which can determine how much actual carrying capacity transmission lines have at any one moment, versus relying on static model-based assumptions, to potentially allow more efficient delivery of power.

And, of course, more advanced approaches can expand the pool of grid-balancing resources, he noted. Smart meters and two-way communications to homes and businesses open the opportunity for fast-acting and demand response technologies and energy efficiency programs to help shift load to match the variability of wind and solar power generation. Energy storage systems can absorb and inject power to mitigate intermittency, whether at distributed or utility scale. And distributed energy resources can be managed as an aggregated whole to improve their grid support capabilities.

“It’s the diversity of these techniques that helps point to a trajectory of continued innovations that are likely to allow us to integrated higher and higher levels of renewables over time,” Stanberry said. “The innovation is not stopping.”

via Greentech Media: Headlines

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