Note to the Department of Energy: The Grid Has Changed

June 20, 2017 | 8:56 am
Mike Jacobs
Senior Energy Analyst

The electric grid is steadily evolving to incorporate growing levels of renewable energy, and it’s saving consumers money and maintaining reliability. However, an April memo from US Energy Secretary Rick Perry is critical of this fact and seeks to protect old plants from closing due to competition.

Grid reliability depends on continued investment, innovation, and modernized practices. New, renewable solar and wind power plants and new practices that replace the old are meeting the public’s electricity needs. Delaying the retirement of old plants costs consumers money. With these changes to grid, there is no change to the vigilant attention to reliability.

When the DOE releases the study and policy recommendations requested by Secretary Perry, it should show that US electric system has not been diminished by change. The study should show that reliability is defined across many criteria and time windows, and that a growing diversity of resources are capable of providing reliability services. If done well, the report will reflect the industry practice of relying on the mix of generation, and that no single metric describes the reliability of the power supply.

Renewable energy from wind and solar has grown to supply as much as 50% or more of electricity on particular days over large areas of the United States.  Individual companies and cities have set and met goals of procuring 100% of electricity use from renewable energy. These early indications of the change in the electric grid demonstrate the robust ability of the technology, investment, and coordinated operations that provide a successful functioning of the grid on new terms.

The challenge for the Department of Energy is to keep up with the changes that make the grid more reliable, despite the decline in coal. Utility engineers have taken up the challenge to use existing tools, such as power system forecasting and coordinated economic scheduling of power plants, and modernize them.

In addition, rapid advances in renewable generators technology provide surprising capabilities. The recent report made by the California ISO staff to its board describing the accuracy and speed of solar farms to provide reliability services was filled with positive exclamations. This is just the latest technical assessment to demonstrate that making more use of the services available from renewable energy for reliability improves both the economics and the reliability of the grid.

How this happened and how the energy system stays reliable

Dynamic innovation and capital investments push the evolution of energy sources, especially in generating electricity. Competition between coal and hydropower factored in the famous rivalry between inventors Thomas Edison and Nikola Tesla at the start of the electricity era (circa 1890). Today, market competition from lower-priced gas, efficiency, wind and solar is driving the decline of coal in the US and corresponding increased use of these supplies. Texas leads the US in wind installations, through a combination of competition and cost-effective infrastructure investment.

Growth of Wind & Solar in the US in recent years is greater than other technologies or fuels. UCS chart.

Lower prices for these energy sources combined with technical innovations ensures the continued reliable operation of the electric system with this growth and change. As falling costs from new competing sources of energy attract investors, the construction of new power plants using new technology is dramatic. The majority of generating capacity added in the US in each year 2014, 2015 and 2016 used either wind or solar. See the chart to the right for the rise in renewable energy installations using wind and solar.

The organizations responsible for reliability are fully engaged in this evolution

Grid operators, also known as “power pools” are responsible for reliably managing this growth across multi-state regions, with some seeing these changes faster than others. Graphs below show the growth of wind in the major electricity markets from 2008 (when nation-wide windpower (or wind and solar) surpassed 20,000 MW) to 2016.

Independent system operators that operate these markets, as well as plan and operate the grid, are informed of these changes, and the retirements of old plants, through various study obligations that supplement fundamental reliability standards. The MidContinent Independent System Operator (MISO) estimates over $350 million annual savings comes from planning for wind.  The benefits from $3.4 billion in transmission construction in the Southwest Power Pool (SPP) from 2012 to 2014 are $240 million per year, expected to exceed $10 billion over 40 years.

Significant renewable energy growth in four regions of the US in last decade. UCS charts.

Power pools serve two-thirds of US consumers as system operators independent of the local utilities, fostering reliability, innovation and competition. The agreement to form the PJM power pool to save money and increase reliability was front page news in 1927. Energy needs for wartime aluminum production drove the formation of SPP eight days after the United States entered World War II. Today MISO estimates annual savings of $1.8 billion from reducing needed reserves.

Reliability oversight and sharing of best practices comes from national and continental-scale organizations. US reliability and interconnection standards are developed by the Federal Energy Regulatory Commission (FERC) and the North American Electricity Reliability Corporation (NERC). FERC first adopted a requirement for wind contributions to grid reliability in 2003, setting a standard for “riding through” (i.e. staying connected) disturbances that was more stringent than that applied to nuclear plants. From that time on, NERC has provided a series of reports and recommendations to guide the industry in safe and reliable integration of renewable energy. With this oversight on reliability, the growth of renewable energy has reached some impressive records.

Records for supply from renewable energy

Regional record for use of renewable energy in a single hour. Chart UCS.

Wind farms, and all renewable generation in California, are setting new records for serving regional electricity needs. Adaptations by grid operators over the years allow a steady increase in renewable energy on the grid. The numbers shown here illustrate how wind and solar technology, combined with the grid operators’ tools, are running the electric supply at times with 50% wind in the Great Plains and at 80% with the combination of renewable sources (including wind, solar, hydro, biopower and geothermal) in California.

These records are during hours when renewable production is high and demand is relatively low, but they provide experience for routine operations with ever-higher levels of renewables.

Grid practices keeping pace make these records possible

The industry continues to expand the innovations and tools for reliable operations with higher levels of renewable energy and lower levels of fossil fuel.

When wind farms and solar generation are distributed across large areas, the energy produced is both more predictable and steady. This geographic diversity allows regional power pools to integrate the supply of renewable energy into the larger supply mix, as weather patterns move across their region. The effect of this pooling wind across a large area was noted by ERCOT’s official market monitor, who observed wind production in June 2016 was at all times at least 3,500 MW.

Because they’re so large, power pools also create cost savings by reducing the need for generators held in reserve (used to balance supply and demand). Smoothing out these changes, adjusting for weather forecasts, and now incorporating centralized wind forecasts for the region are all best practices. The California ISO implemented wind forecasting in 2004. The regional grid operators of Texas, New York ISO (NYISO), and the Midcontinent ISO (MISO) implemented wind forecasting in 2008 and PJM did so in 2009.

State-of-the-art wind forecasting predicts the output of individual wind farms and allows grid operators to include wind farm operations in their day-ahead preparations and real-time generator dispatch systems. Grid operators continue to improve technical forecast tools, including visualization of wind conditions to improve system operators’ situational awareness, and increased forecasting electrical system needs and capabilities based on forecasted wind output.

Once forecasting demonstrated significant cost savings and reliability benefits, grid operators and the wind industry adopted the best practice of expanding market system control of dispatch, and implementation of wind dispatch (i.e., windfarms respond economically to instructions).  In 2009, NYISO was the first to include wind offer prices and dispatch in the market system. By 2011 the markets run by MISO and PJM included similar price-based wind integration. This innovation allows ISOs to determine the most cost effective way to address reliability issues, ensuring better utilization of wind plant output while maintaining a secure, reliable system.

In addition to new power plants and grid practices, other investment categories contribute to greater reliability and more use of renewable energy. Increased transmission allows greater sharing of energy resources within and among power pools. Utilities, independent developers, and wind farm companies continue the expansion of this most fundamental electricity infrastructure. Coordination of demand response, electric vehicle charging, and simple upgrades such as thermostats and efficient lighting reduce the stress on the grid, directly and immediately improving reliability.

The utility industry has great potential to improve this sort of interaction with consumers, as well as the game-changing possibilities of battery energy storage.

Methods need to continue to evolve and be adopted

The evolution of modern electric grids has reached the point where old coal plants are retiring and grid management proceeds without any coal generation. Both New England, and Britain (old England) have reached this point. Continued progress with new technologies requires support for research, demonstration, and deployment. New methods of understanding requirements and the solutions come from open and honest dialogue.

That competition for the future cannot be successful when the regulatory agencies champion a backward-looking approach. The recommendations anticipated shortly from the DOE should recognize the realities of changes already made in electric grid operations, as well as the capacity to make greater use of new technologies already demonstrated.