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Intermittent Renewables and Electricity Markets

Renewable energy advocates regularly ignore the intermittency of solar and wind energy in their analyses. As discussed in a previous article, this is a very serious omission because the mechanisms required to compensate for intermittency can increase the cost of solar and wind energy many-fold, especially at higher penetration levels.

The fact that wind energy still requires generous subsidies after having reached grid-parity with conventional power is a very direct real-world example of the added costs of intermittency even at low penetration levels. This article will explore the market mechanisms responsible for this often ignored added cost.

Electricity markets

In principle, electricity markets are fairly straightforward. Offers made by sellers are arranged in ascending order, bids made by buyers are arranged in descending order and the market clearing price and capacity is determined by the point where the two lines cross. In this way, no sellers are forced to sell power below the price they offered and no buyer has to buy power at a higher price than they bid.

Electricity market

When working with dispatchable generating capacity, the offers being put forward will mostly start with baseload coal or nuclear plants which are optimized to run at very high efficiencies and capacity factors. Load-following coal and gas plants will then bid in at a somewhat higher price because they have to work at lower capacity factors and efficiencies. And finally, peaking plants capable of rapid ramping will bid in at very high prices in case of very high demand.

Since it is very difficult to store electricity, this arrangement is necessary to closely match supply with demand as it varies over various timescales ranging from minutes to months. An example of how this arrangement will impact electricity prices is shown below for three different times of day. It is clear that electricity prices will be low in the early morning hours because very little of the more expensive load-following capacity is required. In the afternoon peak, however, electricity prices can increase substantially as more expensive supply is brought online.

Electricity price response to demand changes

The demand lines are drawn diagonally in order to visualize the limited effect that price can have on demand. For example, if prices fall for whichever reason (i.e. the blue curve shifts downwards) more capacity will be bought at this lower price perhaps due to some energy-intensive industries upping production.

Practical difficulties posed by intermittent sources

This system of matching supply and demand operates very well for dispatchable sources, but things become a lot trickier when intermittent sources are included. Because of the practical challenges discussed in this section, intermittent renewables generally enjoy dispatch priority – a priority of selling electricity to the grid regardless of supply/demand fundamentals. Without such legislation, intermittent energy surges might not be accepted even if they made competitively low price offers.

The most important practical problem arises when intermittent renewable energy surges enjoying priority dispatch displace the demand for baseload power. Due to the potentially very large renewable energy spikes, this can already happen at fairly low penetrations. For example, German wind power shown below achieved a capacity factor of about 18% in 2012, but intermittent spikes regularly exceeded 70% of capacity – quadruple the mean output. As a result of such intermittent spikes occurring during times of low demand (e.g. at 04:00 in the graph shown above), wind will regularly eat into baseload demand even at penetration levels as low as 5%.

German wind output 2012

Cutting supply from a baseload plant to compensate for an hour or two of very high wind generation is not practically possible. This means that both the wind and baseload capacity must be cleared by the market through very large price reductions. In recent years, this has at times resulted in negative electricity prices.

In addition, renewable energy fluctuations often happen quite rapidly, thereby requiring very rapid ramping of load-following plants. The long neck of California’s “duck graph” (the time when solar PV supply falls at the same time as demand picks up towards the afternoon/evening peak) offers a good example of this issue. In practice, this situation will require a much higher percentage of the expensive peaking plants capable of such rapid ramping.

California duck graph

The effect of intermittency on price

Free market systems are very adept at correctly valuing commodities. It is therefore no coincidence that the electricity price is low (sometimes negative) during times of high production of intermittent renewable energy. As shown below, this relationship between prices in red (€/MWh) and wind energy output in blue (MWh) is clearly visible for German wind power even when the data is smoothed to daily averages.

Inverse correlation between wind power output and price

Naturally, this significantly hurts the business case for intermittent renewables simply because wind and solar farm operators must sell the bulk of their product at below-average prices. From this point of view, it is only natural that wind power will continue requiring substantial subsidies even though grid parity has already been reached many years ago.

At this point, solar advocates normally point out that solar PV production is much better correlated with demand and therefore deserves to be sold at a premium. Yes, this is true for the first few percentage points of penetration, but, due to the very pronounced intermittency (low capacity factor) of solar PV, it is not long before the same problem is encountered. As an example, the projected electricity supply profile for Germany in the year 2020 is shown below with solar PV at 10% penetration.

German electricity production in 2020

It is clear that solar PV supply surges will eat into baseline supply and force very deep and rapid ramping of load-following plants on many days during the summer. Under such circumstances, Germany will have to pay its neighbours to take this unwanted solar power off her hands, thereby severely hurting the business case for solar PV and forcing unnatural shifts in economic activity in the core of the already fragile European economy.

Added costs of the transition from baseload to load-following

This incompatibility between baseload capacity such as nuclear and intermittent renewables such as wind and solar is part of the reason why Germany is retiring her nuclear fleet and building more flexible coal plants. Naturally, this is a tremendously expensive endeavour and struggling German utility companies are now claiming €15 billion in damages. Without this compensation, German utilities will not be able to meet the great challenges posed by rapidly fluctuating loads such as the example shown above and the Energiewende will fail. It can therefore be expected that utility bailouts will contribute significantly to the rapidly rising costs of the Energiewende in coming years (the numbers below are in billions of Euros).

Rising costs of Energiewende

Summary

As this brief analysis has shown, intermittent renewables will sell at below-average prices even at relatively low levels of penetration, implying that these technologies will require generous subsidies even after grid parity is reached. This effect has shown itself in real-world markets even at fairly low penetration levels and will escalate rapidly as more intermittent capacity is added.

In addition, substantial added costs can be expected from the premature transition from a dispatchable power fleet predominantly running baseload plants to one running only load-following plants. Baseload plants must be retired early, new load-following plants must be constructed and the overall capacity factor and efficiency of dispatchable power generation will drop substantially.

Content Discussion

Dan Mantena's picture
Dan Mantena on August 13, 2013

How frequent are the cases of negative prices in the United States due to high wind output at night?

 

Also, just for clarification the negative price is associated with the ramping limits of other generators in the system and limited tranmission in the balancing area.

Schalk Cloete's picture
Schalk Cloete on August 13, 2013

You can take a look at this report to see the percentage of hours with negative prices in regions with the highest wind penetration. I’m not sure how objective the study is, but it has some informative graphs and interesting discussions about the phenomena covered in this article. 

Yes, these issues can be reduced by expanding the grid or displacing baseload with load-following capacity, but both of these options cost money – often a lot of it. 

Rick Engebretson's picture
Rick Engebretson on August 13, 2013

Coal is a necessary rescue of the European economy, as you say. Hundreds of millions of people can’t live on unpredictable voltage any more than they can live on music. People need food, shelter, industry, and fuel.

The lucky thing for Europe is their durable infrastructure and being surrounded and embedded by water. The world’s CO2 will knock on your door and grow your food and fuel at unprecedented rates. Carbon Capture is your game. A transition from coal to durable biofuel based economies is already well begun. The Japanese would be brilliant partners.

The energy advice you followed didn’t work. You have a right to think for yourself and your survival. And you have the skills to teach the rest of us what might work.

BTW, there is a large article in today’s Minneapolis (MN US) Startribune newspaper describing enormous investments in coal power generation in the upper midwest. Europe is not alone seeing a need for a new direction. Nobody disputes the CO2 problem. And nobody seems to have a good solution. The urgency and skills seem to be most pronounced in Japan and Europe, however.

John Murray's picture
John Murray on August 13, 2013

More than half the new electric power in 2009 and 2010 came from renewable energy. The more clean energy we build, the more reliable it gets. http://clmtr.lt/cb/wfi0bJd

Nathan Wilson's picture
Nathan Wilson on August 13, 2013

Schalk,

The electricity market that you describe is one attempt to optimize the economics of the power industry, but it is not the only one.  In particular, it seems to favor independent producer with mostly fossil fuel fired power plants.

My local utility resisted the de-regulation booms a few years ago, long enough for the boom to die out.  It is still fully regulated, and it owns most of the thermal power plants that it uses to make electricity.  We are in the windy central US plains, so they have a large and growing wind power program.  They own about a quarter of the wind farms they use, and have long term power purchase agreements for the rest.

This makes the economic analysis so simple, a Public Utilities Commission could understand it.  The variable renewables have to be cheaper than the variable cost of fossil fuel power they displace (not the levelized cost of fossil fuel power).  Fossil fuel power plants have to be available to carry the load when the wind is not blowing, and rate-payers must pay for the capital amortization of those fossil fuel plants.

We don’t have any utility scale solar power (or nuclear) on our grid, but when we do get it, I hope that it will be utility owned, since that is the only way that rate-payers can capture the benefits of the cheap power that these long-lived capital-intensive clean technologies produce after they have been amortized. (Note that the cheap power from older plants is not a factor with wind farms, since they are not expected to last more than 25 years, due to mechanical wearout.  We have not yet had to deal with the regulatory implications of a boom in roof-top PV, and may not for quite a while, due to the frequent incidence of hail storms.)

Kim-Mikael Arima's picture
Kim-Mikael Arima on August 14, 2013

Excellent post. Please keep writing. For once someone who understands the implications of intermittent renewables to the power systems. 

Please note that while I support your analysis, I don’t think it means intermittent renewables can’t be done. It’s just going to be a lot more difficult and a lot more expensive than commonly thought. 

Schalk Cloete's picture
Schalk Cloete on August 14, 2013

Thanks Nathan,

So wind farms and thermal stations all sell electricity at the variable cost (which is very low for wind)? I assume that ratepayers pay for the capital cost of wind turbines through the same mechanism as they pay for the capital costs of thermal plants. If this is not reflected in the electricity price, how is this cost passed to consumers?

 

Dan Mantena's picture
Dan Mantena on August 14, 2013

You can also look at it in the other context and say the more renewables we build the more flexible we need our grid to be in order to handle system flucutations.  Unless we overbuilt renewables to 3 or 4 times our annual peak demand we will always rely on thermal plants to provide grid flexibility.

Clayton Handleman's picture
Clayton Handleman on August 14, 2013

The economics are interesting and surely should be taken into account.  However, they are calculated for a market in which there are not externalities.  In earlier posts you have acknowledged externalities but tend to utilize the smallest in the rather wide spectrum of studies. 

It appears that your thesis is that until we can precisely quantify the externalities, it is OK to ignor them.  That is very troubling.  If it were meerly a matter of money then I would support that or a similar position.  However, of grave concern to me is that there are vast natural resources being irreplacably damaged or destroyed.  For example massive watershed damage in the Appalachians from mountain top removal.  How do we monetize the permanent loss of aquifers and habitat?  http://en.wikipedia.org/wiki/Martin_County_coal_slurry_spill    And the human cost is quite high as well, some of it is directly quantified – http://ilovemountains.org/the-human-cost 

And none of this takes into account the fact that the slurry ponds become unusable land pretty much forever.  And that is in no way monetized.  This is not a car that when it becomes nearly worthless you take it to the junk yard and the recycle it.  This is land taken out of service PERMANENTLY.  That is not being monetized. 

So taking climate change off the table altogether there are large unaccounted for externalities.  So yes, until we figure out how to monetize this, I am all for government getting involved with subsides, carbon tax etc., as long as those mechanisms are used to build the grid, depoly more renewables, suport peaking power plants etc.

 

Nathan Wilson's picture
Nathan Wilson on August 14, 2013

This report from the US gov’s Lawrence Berkely National Labs says that 88% of US windfarm capacity is owned by Independent Power Producers (p.26), and 80% of wind farm output went directly to utilities, mostly via long term contracts (Power Purchase Agreements or PPAs).

I have not read any PPAs, but we can be sure that the contracted MWh rate is enough to cover the predicted levelized cost of the wind energy (including government incentives), plus profit for the power producer.  The cost of the wind energy would be averaged into the costs that get passed on to the ratepayers, the same as fuel.

So almost of the wind power going into the US grids will bypass the day-ahead and hourly bidding systems described in the article. 

In the case of utilities like mine that own their own thermal generation, again, the bidding process does not apply, but a cost-based dispatch order is used, which is based on the actual variable cost.  So initially, wind will displace expensive gas generators, then as net load on the thermal plants decrease, it will cut in to the cheaper coal.

My town has a large oil and gas industry which enjoys considerable puplic support.  We have no desire to phase out fossil fuels, so I’m sure that we’ll halt the growth of our wind power program the minute it stops being cost effective (i.e. we won’t install so much wind that we’ll need a lot of ramping from our coal plants, but we recent load growth has been met with new gas plants, not coal).

Schalk Cloete's picture
Schalk Cloete on August 15, 2013

Thanks for that link, Nathan. I took a look at the presentation and the report and found it to be very informative. 

For one, the report clearly demonstrates the great influence of the location on wind power economics. The interior achieves average capacity factors of 38% and enters PPA’s for $31/MWh while other regions come in at about 25% and have to take PPA’s at double that price. 

In this sense the US is far above the world average in terms of CF. According to BP Statistical Review data, The US gets about 30% over the past few years (consistent with the report) while the world on average gets about 22% consistently since 2005. 

About the price, however, I am struggling to reconcile the PPA prices with the actual LCOE. For an interior wind farm, the LCOE over a 20 year lifetime with capital costs of $1800/kW, a 7% discount rate, O&M costs of $20/MWh and a 38% CF would amount to a LCOE of $70/MWh. Backing out the PTC of $22/MWh leaves $48/MWh in actual costs, but the average interior PPA takes electricity at only $31/MWh. 

The report also has some interesting graphs about the hidden costs of wind, adding about $6/MWh to the cost in terms of added tansmission costs and requiring roughly a 10% increase in balancing reserve for 20% penetration by capacity (probably about 10% penetration by actual generation).

Schalk Cloete's picture
Schalk Cloete on August 15, 2013

It certainly is complex and the world is still learning how to most effectively integrate intermittent renewables into electricity networks. One of the issues is that the local penetration of intermittent renewables might increase substantially over the 20-year lifetime of a typical contract, thereby significantly reducing the actual value of power sold over time through the mechanisms described in the article. For fixed price PPA’s, this could result in losses due to forced curtailment of excessive intermittent surges. For variable PPA’s, the price effects in the article will significantly reduce the actual selling price as more intermittent capacity is added. 

Talking about nuclear, one of the more important realizations I got from writing this article is that our two long-term energy options: nuclear and large scale renwables (wind & solar), are badly incompatible. Unless expensive storage solutions are added to intermittent renewbles already at low penetrations, baseload nuclear and intermittent solar/wind cannot coexist. I think this is a very important longer term issue to consider…

Schalk Cloete's picture
Schalk Cloete on August 15, 2013

I plan to write an article about externalities and subsidies fairly soon. There we can discuss the long-term negative externality of climate change vs. the balance of short-term externalities (negatives like air pollution vs. postives like socio-economic development) at length. 

Clayton Handleman's picture
Clayton Handleman on August 15, 2013

That would be great.  I was thinking of doing one but don’t think I will have time soon and you are good at mining sources, interested to see what you come up with. 

I will point out that I intentionally left climate change off of the table to emphasize that it is not the only externality that is significant.

Mark Goldes's picture
Mark Goldes on August 15, 2013

Non-intermittent renewables are on the horizon. An engine has been invented that needs no fuel. It is expecte to run 24/7 and could trigger a perpetual commotion. See NO FUEL ENGINE on the AESOP Institute website. Since these engines will not get hot, after a prototype is validated by an independent lab, small plastic desktop piston engines are planned that will run a radio and recharge cell phones. Metal versions are expected to power homes 24/7 and replace diesel generators. They also may provide emergency generators and an on-board recharge for electric cars. They appear scalable to very large sizes. It appears they could replace wind turbines and wind farms.

Alain Verbeke's picture
Alain Verbeke on August 15, 2013

” substantial added costs can be expected from the premature transition from a dispatchable power fleet predominantly running baseload plants to one running only load-following plants. Baseload plants must be retired early, new load-following plants must be constructed and the overall capacity factor and efficiency of dispatchable power generation will drop substantially. “

 

I guess this bureaucrat should also cover hereunder listed points in his article, to illustrate why yhis article is not realistic……

 

1. Germany is massively subsidising lignite coal extraction if the lignite is extracted from inside Germany, rendering this lignite the cheapest fuel available on the market, cheaper than free wind, sun and water…. Then it taxes CO2 emissions coming out of it’s indigenous coal plants, who are burning this subsidised German lignite. And all this subsidy circus gets paid by the electricity consumers. No wonder your EnergieWende is such a failure, and electricity prices are going through the roof in Germany. No wonder solar roof PV is such a success in Germany, it is the only way to avoid this government insanity, and avoid paying a lot for your consumed home/office/plant electricity.

 

2. Germany didn’t close out it’s nuclear plants because they were not compatible with intermittent renewable energy. It was a political decision after German voters pressure demands occuring after the Fukushima accident in Japan.

 

3. Nuclear can be baseload and load following. Canadian CANDU6 720MW nuke plants easily can ramp up and down according to grid demand, being able to operate as low as 50% of their nominal power setting. That is why China has so many of them. They are flexible enough to accomodate any intermittent renewables on demand, if the total power park capacity is not consisting of more than 50% of such plants. A shame they are so expensive and the newest evolutions are avaiiable only once you need 1000MW plus in nameplate capacity.

 

4. Germany has built many new load-following natural gas powered plants in the last five years. I almost worked on the construction of one of them near Koln. A humonguous amount of them were built. German utilities like RWE and Eon are now in financial difficulties because of them, since they are mostly not used. They are now losing money to their owners, because they produce electricity at too expensive rates, due to the high imported natural gas prices. They can not compete with wind, hydro and biomass/biogas.

 

5. Denmark has more than 25% in wind nameplate capacity in it’s total power generation park. They have no issues whatsoever with load following. They simply export their surplus wind to Norway when it’s own grid is wind saturated and baseload power plants have to be curtailed. Norway then simply shuts down some hydropower dams, until the Danish wind exports starts decreasing. Once Danish wind production is too low, they import hydro power generated in Norway. The same approach is now slowiy being put in place all over Europe, with interconnectors linking all countries, allowing load balancing on a continental basis. Yes it costs money. But it is far cheaper than depending on imported Russian or Qatari or Algerian natural gas, and sending spare euro to those countries. After all, building this grid sends the money to our own people, instead of sending it overseas….

 

6. New coal power plant now achieve 50% plus in energy efficiency. That means that 50% of the energy contained in the coal fuel is going through the chimney. That is why decentralised smaller scale combined heat and power plants are far better. They achieve a 85% energy efficiency without a problem, since most of the heat is recuperated, and can displace imported natural gas used for space heating…

 

7. Greenpeace warns water pollution from German coal mining on the rise. The scenic waterways of the Spreewald eastern German natural area could remained choked with iron sludge from lignite coal mining for decades  iron oxide content in the water showed to be more than 100 milligrams per liter — 3 milligrams per liter are considered harmful to the environment. Vattenfall, moving to meet rising electricity demand in Germany, has announced plans to develop 5 brown lignite coal strip mines in Lausitz, beginning with the Welzow-Sud II mine. The company is intending to mine 204 million tons of brown coal at the site through 2050.

 

http://www.energy-daily.com/reports/Greenpeace_warns_water_pollution_from_German_coal_mining_on_the_rise_999.html

 

8.Legacy of 1986 Chernobyl disaster seen in impact on region’s forests. While the worst effects in surrounding forests were recorded in the “first few years” after the accident, surviving trees were left vulnerable to environmental stress such as drought with young trees particularly affected. “Many of the trees show highly abnormal growth forms reflecting the effects of mutations and cell death resulting from radiation exposure,” he said.

 

http://www.terradaily.com/reports/Legacy_of_1986_Chernobyl_disaster_seen_in_impact_on_regions_forests_999.html

 

9. The operator of the crippled Japanese Fukushima Daiichi nuclear plant has started pumping out radioactive groundwater to reduce leakage into the Pacific ocean. The embattled utility — kept afloat by a government bailout — last month admitted for the first time that radioactive groundwater had been leaking outside the plant. It has since said tainted water has been escaping into the Pacific for more than two years since the atomic crisis triggered by a huge quake and tsunami in March 2011. An official at Japan’s industry ministry said this week that Tokyo estimates 300 tonnes of contaminated groundwater may be seeping into the ocean every day.

 

http://www.terradaily.com/reports/Fukushima_operator_pumps_out_toxic_groundwater_999.html

10. S. Korea facing power crisis. “We are facing potentially our worst power crisis,” Trade, Industry and Energy Minister Yoon Sang-Jick said Sunday. “We may have to carry out a rolling blackout… if one single power plant goes out of operation,” Yoon said, appealing to factories, households and shops to curb consumption over the next three days. The timing could hardly be worse, with South Korea in the grip of an extended heatwave and a lengthy disruption in its nuclear power sector.  South Korea’s nuclear industry is struggling to emerge from a mini crisis which has forced the shutdown of numerous reactors — either for repair or as the result of a scandal over forged safety certificates. The country has 23 reactors which are meant to meet more than 30 percent of electricity needs. Currently six reactors are out of operation.

http://www.energy-daily.com/reports/S_Korea_facing_power_crisis_999.html

 

11. Price of Wind Energy in the United States Is Near an All-Time Low. The prices offered by wind projects to utility purchasers averaged $40/MWh for projects negotiating contracts 2011 and 2012, spurring demand for wind energy. Wind power comprised 43% of all new U.S. electric capacity additions in 2012 and represented $25 billion in new investment. Wind power currently contributes more than 12% of total electricity generation in nine states (with three of these states above 20%). Turbine scaling is boosting wind project performance. Since 1998-99, the average nameplate capacity of wind turbines installed in the U.S. has increased by 170% (to 1.94 MW in 2012), the average turbine hub height has increased by 50% (to 84 meters), and the average rotor diameter has increased by 96% (to 94 meters). Wind turbine prices have fallen 20 to 35% from their highs back in 2008, and these declines are pushing project-level costs down. At the same time, even with a short-term extension of federal tax incentives now in place, the wind power industry is facing uncertain times, in part due to low natural gas prices and continued policy uncertainty.

 

http://www.winddaily.com/reports/Price_of_Wind_Energy_in_the_United_States_Is_Near_an_All_Time_Low_999.html

 

 

 

Jim Stack's picture
Jim Stack on August 16, 2013

To help make Renewables like Wind and Solar more steady we can use WWW.V2G-101.COM Vehicle to GRID with the millions of new Plugin Vehicles coming out each day. Univerisity of Delaware and google have been doing this and it really works.

As mentioned in remarks on this page there are times when there is too much and others when there is to little. Millions of vehicles can regulate this and still have plenty of charge to replaace dirty imported OIL. My EV goes about 50-80 miles on 10 kWH $1 of energy vs a gallon of gas. Interesting fact, it take as much electricity to regine a gallon of gas as it does to drive that far in an electric vehicle! no OIL, no transmission or exhast !

Great companied like Tesla are 100% American, their vehicles are the highest rated of any vehicle regardless of fuel! They are placing SuperCharger locations all across the USA and World that are free for life and 110% Renewable energy powered., With a range of 300 miles and most drives only go 30-50 a day it’s a great way to keep $1 Billion a day from imported OIL in this country. 

http://www.udel.edu/V2G/

 

Nathan Wilson's picture
Nathan Wilson on August 17, 2013

There is simply no way that 2/3 or our wind power is closer to loads than fossil/nuclear.  Our wind power is “distributed” over an enormous amount of agricultural land, our fossil/nuclear plants are located near or in cities.  The development of wind power in Texas and Oklahoma for example, has been limited by the roll-out of new power transmission to the windy but sparcely populated western parts of those states.

I suspect that the low PPA pricing has more to do with the lower interest rates.  Perhaps once the PPA are signed, the developers are able to borrow money at the extra low rates that utilities normally get.

Atomik Rabbit's picture
Atomik Rabbit on August 18, 2013

Those projects have been a little delayed due to the author’s untimely incarceration in William Rankine Prison for the Terminally Inane, convicted of destroying entropy and violating the laws of thermodynamics.

Jean-Marc D's picture
Jean-Marc D on August 19, 2013

Schalk, large scale new renewables (wind & solar) are badly incompatible with everything, not just nuclear. They are no more compatible with coal than they are with nuclear, load following NPP can be made, the closed German ones were able to do load following more efficiently than coal units (less thermal fatigue).

The biggest problem is economic, if you have built a NPP, you’re better off using it, and not ramping up and down, but it’s exactly the same for a coal plant, where O&M and amortization for recent plans is most of the cost.

On paper, it’s easier with gas plant. But actually the recent combined cycle plant are more and more sophisticated and expensive to build and operate, which means than during the amortization period they need an operation factor between 50 and 60%. Which is why all the ones that don’t get that get closed en masse now in Europe.

And also as GE defends in this recent document http://www.whitehouse.gov/sites/default/files/omb/assets/oira_2060/2060_07232013-1.pdf  at high penetration level renewable will be incompatible in a different way, the fast variations will require open cycle plants for stability of the grid, with higher CO2 emission, which means much reduced emissions gains. As you described, at a penetration of 18%, there will be peaks of 70% which means that at a penetration of 26%, the peaks already reach 100%, So at a stage where 74% of the power is still generated by fossil power and they are real problems getting higher, we already need those less efficient open cycle to follow the variations. How big do the CO2 gains with wind together with gas actually end up ?

Schalk Cloete's picture
Schalk Cloete on August 19, 2013

True, overnight capital costs for nuclear is twice that of coal which in turn is twice that of gas. This implies that nuclear must have a high capacity factor to recover its capital and cannot tolerate any reductions in plant lifetime from regular changes in load. I also think that most nuclear plants have a relatively high minimum load, implying that only relatively small intermittent electricity surges can be balanced out. 

For these reasons, I don’t think it will ever be economically viable to balance renewables with nuclear (unless capital costs can be dramatically reduced) which is a problem for our long-term energy future. Gas and coal with their lower capital costs and higher fuel costs are more suitable. I always thought that coal is much less capable of load following than gas, but, as you can see from slide 78 onwards here, Germany manages rather rapid cycling of her hard coal plants between 10% and 100% quite frequently. 

About, the decreasing CO2 abatement of wind with increasing penetration, you can check out this lengthy article from Willem Post. It appears as if wind at a penetration of 20% will manage roughly half the CO2 abatement that is observed at very low penetrations. 

Schalk Cloete's picture
Schalk Cloete on August 19, 2013

As usual the world will optimize the balancing of intermittent renewables primarily through trial and error. This optimization will yield some combination of thermal power plants, expanded electricity networks and energy storage. The ideal ratio will vary strongly from case to case and will be quite difficult to determine.

Electricity distribution typically carries similar costs to electricity generation. However, this is for standard power plants where the distribution network simply has to distribute electricity from a fixed and concentrated source to a designated populated area. Using the grid for balancing renewables will require that electricity can be distributed over a very large populated area from wherever the wind is blowing and the sun is shining. Such a grid will require large amounts of excess transmission capacity to avoid congestion as the intermittent electricity surges shift from one area to the next. This will definitely not be cheap and will also have some unwanted visual impacts. 

Clayton Handleman's picture
Clayton Handleman on August 19, 2013

Battery prices must drop and endurance must increase but I agree with you.  And progress on both fronts is moving rapidly.  http://cleantechnica.com/2013/07/08/40-drop-in-ev-battery-prices-from-2010-to-2012/

Further, there is a new idea rapidly gaining traction and that is repurposing used EV batteries for dispatchable grid storage.  http://www.sandia.gov/eesat/2011/papers/Tuesday/19_Jaffe_ESSAT_Abstract.pdf

Clayton Handleman's picture
Clayton Handleman on August 19, 2013

It will be costly to expand the grid but again we get back to the difficult to monetize discussion.  This time (unlike exernalities) the benefits are difficult to monetize.  However to thus wipe them away and pretend that they don’t matter is in service of supporting a point of view rather than moving to the wisest couse of action.  Here are two considerations for grid expansion:

Reliability – Progress has been made since the Northeast blackout but most are saying that it is far from sufficient.  When the West Cost debacle ocurred, in part courtesy of then Wall Street darling Enron, Intel said that they would not build any more fabs in CA unless and until they had confidence in the grid.  That alone is a huge loss.  IC fabrication is not the only industry that benefits from grid stability, or is severely damaged from lack of it, there are many others.  One fab is a huge employer and high value jobs.  How do we monetize the value of a stable grid? 

An upgraded grid is a market facilitator.  It creates a much more transparent market for electric power.  It makes it possible to make something much closer to a real market for electrical generation.  The Transactive Grid concept allows something akin to the Nasdaq exchange for power over the grid – http://theenergycollective.com/ecsjessica/253846/transactive-energy-next-big-deal-smart-grid  Those who support free markets generally agree that they optimize pricing. 

How do we monetize the value of the Transactive Grid or a truly reliable grid?  Do we just wait until we have it all figured out? 

I say no.  The value is compelling.  Perfection is the enemy of the good particularly given the enormous costs we will incur from sea level rise.

Paul O's picture
Paul O on August 19, 2013

Jim,

 

I’ve heard/read this argument many times before, and  my impression of it has been very unfavourable.

1) First we have to have those millions of vehecles..we don’t

2) The excess power from renewables must cccur when the vehicles are plugged in and fully charged..what are the chances of relying on that?

3) The increased Charge/dischrge cycles of  car batteries will lessen the longevity of said batteries, and if we tweek the discharge being fed to the grid to a minimum in order to preserve the car batteries, this act will lower their usefulness as grid backup.

Frankly I’d rather not have us rely on renewables in this way at all, except for concenterated solar (CSP), which could be collected from diverse areas (even rooftops?), and fed by fiber optic cables to a central location where molten salt is  held.

 

For my money, CSP and 4th Generation Nuclear power are the future.

Nathan Wilson's picture
Nathan Wilson on August 19, 2013

 I don’t think it will ever be economically viable to balance renewables with nuclear…”

Nonetheless, to the extent that a 100% renewable senario is feasible, a 2:1 nuclear/renewable split is even more feasible.  The exact same technologies could be used to correct the mismatch between supply and demand (whether that be dispatchable biofuel, dispatchable fuel synthesis, or breakthrough energy storage), except that the renewable-induced variability is 3x less.

With today’s technology, I believe ammonia fuel synthesis is our most practical path to a non-fossil energy system. In areas with the best wind resources, off-peak wind-to-ammonia will be almost as cheap as nuclear-ammonia.  But for most of the world, replacing nuclear with wind or solar just makes the economic case look worse.

In countries with powerful anti-nuclear lobbies, fossil fuel with CC&S look like the most likely benneficiaries of the climate crisis.

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