Power System Flexibility 

Needs under High RPS

CPEPC/SPSC/WIRAB

March 26, 2014

Tempe, Arizona

Arne Olson, Partner
2

What is “Flexibility”

Flexibility is the ability of a power system to 

accommodate net load* conditions at Point A and 

Point B in time

The introduction of variable renewables increases 

the need for power system flexibility

• I.e., it increases the vertical difference between A and B

Net Load (MW)

Time

A

B

*Net load = load minus must-run generation
3

Flexibility Planning Challenges

1. Downward ramping capability 

Thermal resources operating to serve loads at 

night must be ramped downward and potentially 

shut down to make room for a significant influx of 

solar energy after the sun rises.

2. Minimum generation flexibility

Overgeneration may occur during hours with high 

renewable production even if thermal resources 

and imports are reduced to their minimum levels. 

A system with more flexibility to reduce thermal 

generation will incur less overgeneration. 

3. Upward ramping capability

Thermal resources must ramp up quickly and 

new units may be required to start up to meet 

a high net peak demand that occurs shortly 

after sundown.

4. Peaking capability

The system will need enough resources to meet 

the highest peak loads with sufficient reliability.

5. Sub-hourly flexibility (not shown 

in chart)

Flexible capacity needed to meet sub-hourly 

ramping needs.

E3 developed the 

Renewable Energy 

Flexibility (REFLEX) 

Model to investigate 

flexible capacity needs 

at high renewable 

penetration
4

Many Resource Characteristics Can 

Be Important for Flexibility

Characteristic How it helps with system flexibility

Upward ramping capability on 

multiple time scales:

 1 minute, 5 minutes, 20 minutes, 1 

hour, 3 hours, 5 hours

Helps meet upward ramping demands

Downward ramping capability on 

multiple time scales:

 1 minute, 5 minutes, 20 minutes, 1 

hour, 3 hours, 5 hours

Helps meet downward ramping demands

Minimum generation levels Lower minimum generation levels can help 

meet upward ramping needs while avoiding 

overgeneration

Start time Faster start times help meet upward ramping 

demands

Shut-down time Faster shut-down times help avoid 

overgeneration

Minimum run times Shorter minimum run times help avoid 

overgeneration

Minimum down times Shorter minimum down times can help meet 

upward ramping needs
5

Scheduled Renewable Curtailment

Scheduled curtailment will be a necessary tool for 

system operators to maintain reliable operations

• Upward ramping shortages can be solved by prospectively 

dispatching wind and solar downward

• Renewable dispatch is already being used to deal with intrahour variability in some jurisdictions

Limited 

Ramping 

Capability

Unserved Energy

Limited 

Ramping 

Capability

Overgeneration

Operations without Renewable Dispatch Operations with Renewable Dispatch
6

MODELING FLEXIBILITY NEEDS
7

Planning

Reliability/Resource Adequacy

E.g., GE-MARS, SERVM

Determines quantity of 

resources needed to meet load 

reliably by calculating metrics 

such as loss-of-load probability 

(LOLP)

Must consider a broad range of 

stochastic variables such as 

load, wind, solar, hydro and 

generator outages in order to 

get robust probabilities

Operations

Production simulation

E.g., GridView, PLEXOS

Calculates least-cost dispatch 

subject to generation and 

transmission constraints

Used to estimate operational 

requirements and 

transmission flows

Operational detail typically 

allows only a single, 

deterministic case (e.g., 

2005)

Conventional Models

REFLEX combines the stochastic nature of an LOLP model 

with the operational rigor of production simulation 
8

E3’s Renewable Energy Flexibility 

(REFLEX) Model

REFLEX answers critical questions 

about flexibility need through 

stochastic production simulation

• Captures wide distribution of 

operating conditions through Monte 

Carlo draws of operating days 

• 63 years of load conditions, 42 years of 

hydro, 3 years of solar, 3 years of wind

• Illuminates the significance of the 

operational challenges by calculating 

the likelihood, magnitude, duration & 

cost of flexibility violations

• Assesses the benefits and costs of 

investment to avoid flexibility violations

Implemented as an 

add-on to Plexos for 

Power Systems and 

ProMaxLT
9

Flexibility Metrics

Flexibility violations occur when the power system 

cannot meet all changes in net load over all time 

scales

REFLEX estimates expected flexibility violations in 

two categories:

• Expected Unserved Energy (EUE)

• Expected Overgeneration (EOG), aka renewable curtailment

REFLEX also assigns economic parameters:

• Value of EUE = value of lost load ($5,000–50,000/MWh)

• Value of curtailment = replacement cost of curtailed 

renewables ($30-100/MWh)
10

Cost-Effective Flexibility 

Investment

REFLEX’s dispatch 

process calculates total 

production costs, 

including fuel, O&M, 

emissions, and the cost 

of flexibility violations

This provides an 

economic framework 

for determining costeffective flexible 

capacity investments by 

trading off the cost of 

new resources against 

the value of avoided 

flexibility violations

Total System Cost

Additional Flexible Capacity

Variable costs: Fuel, 

O&M, Emissions

Cost of Flexible Capacity

Reliability and 

Flexibility Costs

Least-cost

flexible capacity 

procurement
11

INVESTIGATING A HIGHER RPS 

FOR CALIFORNIA: E3 STUDY 

FOR CALIFORNIA UTILITIES
12

About the Study

Study sponsors: 

• Los Angeles Dept. of Water & Power

• Southern California Edison Co.

• Pacific Gas and Electric Co.

• San Diego Gas & Electric Co. 

• Sacramento Municipal Utility District

• Technical input from California ISO

Advisory panel:

• Dr. Dan Arvizu – Director and CEO 

of National Renewable Energy 

Laboratory

• Dr. Severin Borenstein – Director 

of the University of California 

Energy Institute and Co-Director 

of the Energy Institute at Haas 

School of Business, UC Berkeley

• Dr. Susan Tierney – Managing 

Principal at Analysis Group Inc., 

Boston, MA

• Mr. Stephen Wright – Retired 

Administrator, Bonneville Power 

Administration; General Manager, 

Chelan County Public Utility 

District

Analysis team: Energy + 

Environmental Economics (E3) 

with support from DNV KEMA & 

ECCO International

Available at: http://www.ethree.com/public_projects/renewables_portfolio_standard.php 
13

Key Study Questions

Renewable generation 

needed to meet 33% 

RPS by 2020 (85 TWh)

33% RPS (4 TWh)

40% RPS (19 TWh)

50% RPS (27 TWh)

Incremental Renewable 

Energy to meet...

What are the operational challenges, costs, 

greenhouse gas impacts and potential solutions to 

higher renewable penetration in California by 2030? 

46 TWh
14

50% RPS is a New Challenge

California still does not have operating experience at 

33% RPS

Operating experience elsewhere in the world

• Germany: 22% renewables in 2012 

• 7.4% wind, 4.5% solar

• Spain: 24% renewables in 2012

• 18% wind, 4% solar

• Denmark: 30% wind in 2012

• Assisted by interconnections with Germany & Norway

• Norway, New Zealand & British Columbia achieve higher 

renewable penetrations with large hydroelectric resources 

which do not count towards RPS in California 
15 Common Resources

33%

40%

50%

0

20

40

60

80

100

120

140

160

33% RPS 40% RPS Large Solar Diverse Small Solar Rooftop

Solar

Total Renewable Generation (TWh)

Solar PV Rooftop

Solar PV Small

Solar PV Large

Solar Thermal

Wind (Out-of-State)

Wind (In State)

Hydro

Geothermal

Biomass

Biogas

Behind-the-meter Solar PV not 

counted towards RPS

50% RPS

2030 Study Scenarios 

Study considered a 33%, 40% and four 50% RPS scenarios

All scenarios include 7,000 MW of behind the meter solar PV that does 

not count toward RPS: “physical” renewable penetration = 54% 
16

Capacity Value of Renewables 

Declines Significantly Above 33%

As the installed renewable capacity increases, the 

effective capacity of renewables diminishes 
17

Overgeneration is the Most 

Significant Integration Challenge

Chart shows increasing 

overgeneration above 33%

• Overgeneration is very high on 

some days under the 50% 

Large Solar case

• Fossil generation is reduced to 

minimum levels needed for 

reliability

Renewable curtailment is a 

critical strategy to 

maintain reliability

• Reduces overgeneration

• Mitigates ramping events

Example April Day
18

Overgeneration Is Extensive and 

Can Occur in Any Month

Average overgeneration (MW) by month-hour, 50% Large Solar Case:

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

Jan 12,000

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec 0

10,000

8,000

6,000

4,000

2,000

Hour of the Day
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Overgeneration Statistics

Overgeneration Statistics 33% RPS 40% RPS 50% RPS 

Large Solar

Frequency (% of Hours) 1.6% 8.6% 23%

Quantity (% of available RPS gen.) 0.2% 1.8% 8.9%

99th Percentile Overgeneration (MW) 610 5,600 15,000

Overgeneration is 

minimal at 33% 

RPS, but increases 

to nearly 9% of 

available renewable 

energy under the 

50% RPS Large 

Solar scenario

Large 

Solar 

Scenario
20

Potential Integration Solutions 

Default solution to maintain reliability: Compensated 

curtailment of renewable production 

• Pay curtailed generator + procure replacement renewable energy

Five potential integration solution cases are analyzed as 

alternatives to curtailment

1. Diverse Portfolio of renewable resources

2. Enhanced Regional Coordination

3. Conventional Demand Response (down only)

4. Advanced Demand Response (up and down)

5. Energy Storage

Study tested 5,000 MW of each solution by 2030

• Did not explore combinations or try to develop an optimal solution
21

Potential Integration Solution: 

Energy Storage Case

5,000 MW of diurnal energy storage reduces 

overgeneration from 9% to 4% of total renewable 

energy at 50% RPS

Storage charges during the day & discharges at night

Example April day
22

Change in Average Rates of Flexibility 

Solution Cases Relative to 33% RPS 

(2012 cents/kWh)

5,000 MW of flexibility solutions reduce the cost of 

meeting a 50% RPS in 2030, but result in higher average 

rates compared to the 33% RPS scenario
23

Conclusions and Next Steps 

Based on the assumptions made in this study, 

integrating 50% renewable energy in California 

appears to be technically feasible 

Renewable integration challenges are likely to be 

significant under a 40% or 50% RPS

• Timely implementation of solutions is critical to reducing 

costs & operational challenges 

Increased regional coordination is a key solution

• Brings the benefits of diversity and scale to the problem

Other promising solutions include a more diverse 

portfolio of renewable resources, flexible loads and 

energy storage
Thank You!

Energy and Environmental Economics, Inc. (E3)

101 Montgomery Street, Suite 1600

San Francisco, CA 94104

Tel 415-391-5100

Web http://www.ethree.com

Arne Olson, Partner (arne@ethree.com)