Wednesday, October 21, 2015

Renewables Too Variable? Here’s One Solution

Credit: Pacific Northwest National Lab and NREL
﻿﻿﻿﻿﻿﻿﻿﻿﻿﻿﻿﻿﻿﻿﻿﻿﻿﻿ By Joni Sliger, Policy Extern

Energy and Environmental Economics (E3) just released a study on the benefits of integrating the grids of California Independent System Operator (CAISO) and PacifiCorp. Together, CAISO’s and PacifiCorp’s grids cover parts of California, Idaho, Nevada, Oregon, Utah, Washington, and Wyoming. The study explores how connecting the grids could enable both entities to avoid inherent inefficiencies in our current energy system.

Many inefficiencies in our energy system arise from one critical flaw: a lack of energy storage. This lack necessitates generating power at the same time as power is consumed. Placing too much or too little on the grid can cause power outages. Unfortunately, renewable energy generation does not provide a consistent output like traditional fossil fuel sources do. A coal or natural gas plant can theoretically operate at a given capacity so long as there is fuel and demand. Wind or solar facilities vary based on the whims of nature, thus earning these sources the name “variable renewable energy.”

According to a report by the National Renewable Energy Laboratory, grid operators can respond to variable renewable energy by increasing flexibility elsewhere in the system. The report suggests operators find ways to reduce or increase supply from other generators as needed. According to the E3 report, some ways CAISO and PacifiCorp have managed variability thus far include building additional facilities to compensate for low renewable energy production and reducing production at other facilities to compensate for renewable energy overproduction. Both strategies translate into higher costs through increased construction and maintenance.

The E3 study reports that integrating the California and PacifiCorp grids could help avoid these sort of inefficiencies, to the tune of saving between $3.4 and $9.1 billion over the first 20 years. Instead of fighting variability by forcing flexibility, grid operators could embrace it. Accepting more variability and developing regional planning schemes seems to be the essence of CAISO’s and PacifiCorp’s proposed integration.

Intuitively, this proposal makes sense. With one wind farm, there is no guarantee of power production during a given period of time. But the wind is always blowing somewhere. With a few dozen dispersed wind farms, at least one is likely producing power. Managing variability in one state is far more problematic than managing variability across seven.

With an expanded “footprint” (the term for an area where the grid operators can reach), grid operators can reliably anticipate at least some minimal renewable energy production at any given time. Additionally, when renewable energy production is much higher than anticipated (“renewable overgeneration”), the expanded footprint enables operators to disperse (and sell and profit from) excess energy over the wider area with less risk of grid overload.

In addition to pure cost savings, integrating the two grids might even reduce greenhouse gas emissions. A brief explanation on the E3 study notes that doing so enables more renewable energy facilities to have access to a market and come online. Additionally, integrating would enable renewable energy to more easily displace even distant fossil fuel facilities. The E3 study did not investigate overall reductions in greenhouse gas emissions, but the explanation notes one assessment predicts integration could help lower emissions by almost 2.6 million metric tons every year. It is unclear how much of that reduction is separate from the overall push for various state Renewable Portfolio Standards.

Overall, though, it is clear that integrating the grids could improve the overall energy system while saving consumers money at the same time.

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