# Power System Flexibility Needs under High RPS CPEPC/SPSC/WIRAB March 26, 2014 Tempe, Arizona Arne Olson, Partner2



# 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 generation3



# 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 penetration4



# 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 needs5



# 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 intra hour variability in some jurisdictions

Limited Ramping Capability Unserved Energy

Limited Ramping Capability Overgeneration Operations without Renewable Dispatch Operations with Renewable Dispatch6 

# MODELING FLEXIBILITY NEEDS7 

# 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 simulation8



# 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 ProMaxLT9



# 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 violations11 

# INVESTIGATING A HIGHER RPS 

# FOR CALIFORNIA: E3 STUDY FOR CALIFORNIA UTILITIES12



# 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.php13



# 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 TWh14



# 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 California15 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 diminishes17



# 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 Day18



# Overgeneration Is Extensive and Can Occur in Any Month
Average overgeneration (MW) by month-hour, 50% Large Solar Case:19



# 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 Scenario20



# 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 solution21



# 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 day22



# 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 scenario23



# 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)