What Real-time Grid Operations Must Believe in A Zero-Carbon Future?
In today’s power grid, base load — the basal metabolic rate (BMR) of an electric grid, is served by large nuclear, gas, and in some areas, coal generators that have stable energy outputs when online. On top of the base load, the load-following generator, usually large hydro and sometimes gas generators as well, will track and respond to the load movements through market dispatch and automatic generation control. These generators are like glucose in the human body — economical and flexible to meet the energy metabolism. In addition, the peakers, usually the expensive quick-start gas and oil-fueled generators, can be turned on to meet the peak demand during high load hours. These resources are like protein, which is usually saved as a last resort to provide energy.
Over the last decade, the electric power sector has made some solid progress in reducing carbon dioxide (CO2) emissions. According to a Lawrence Berkeley National Laboratory-led research, the direct power sector CO2 emissions in 2020 were less than 50% of what was predicted fifteen years ago. However, data published by the U.S. Energy Information Administration (EIA) show that in 2020, the CO2 emissions by the U.S. electric power sector still accounted for over 30% of the total U.S. energy-related CO2 emissions. Today, electric utility companies across the U.S. have expressed their interest and confidence in building a zero-carbon energy future, which requires replacing the existing carbon-emitting generation fleet with carbon-free resources such as solar, wind, and (battery) storage. While it is a necessary and effective move to reduce the overall carbon footprint and tackle climate change, the journey won’t be easy. Instead, it will require “technology advances and new policy levers.” as pointed out in this article.
But where the technological advances and policy levers should focus on? What are some of the characteristics that real-time operations value and must believe from these future energy resources?
Reliable Energy Output
The meaning of reliable energy is twofold. First, the resource should be able to provide a stable energy output for the duration needed. For example, a generator with an available capacity greater than 100 MW must maintain its generation at 100 MW. If, however, the “stable” requirement cannot be met, the output must be predictable so that the exact amount of energy can be prepared and dispatched to compensate. Failing to be predictable in a zero-carbon environment will not only trigger extreme energy prices but could cause severe balancing problems that jeopardize the grid’s reliability.
The other layer of reliable energy is controllability, which means that the resource must accurately and promptly respond to a change in its generation setpoint. Today, as illustrated in the figure below, the ramp-up of the net demand during evening hours when solar is ramping down is significant and must be precisely compensated by other energy from other thermal resources. With the planned thermal retirement and an increasing amount of solar installed on the grid, this ramp is expected to keep growing, making the controllability of the new candidates to compensate for this ramp (mainly energy storage) critical. Failing to satisfy the controllability criteria will result in significant frequency swings even when the outputs of load-serving resources are predictable and, in an extreme case, lead to rotating power outages.
Today’s power grid’s high reliability is primarily attributed to traditional rotating-based energy resources’ stable output and good controllability. To successfully replace these resources, new inverter-based renewable generators must inherit these characteristics from their traditional counterparts and improve them to a new level. Unfortunately, despite the recent development of inverter-based generating technology, we are not there yet. From now on, I can expect material science and forecasting technology advancements to be the driving forces for the feasibility and timeline of a reliable zero-carbon grid.
Flexibility refers to a resource’s ability to be committed, dispatched, decommitted, and recommitted when needed. The fewer constraints the resource imposes, the more flexible it is. Constraints can be divided into two categories: Hard and soft. Hard constraints are set by physical limitations such as minimum on/offline time (thermal), maximum charges/discharges (battery), and reservoir storage (hydro). In contrast, soft constraints are mainly financial- or regulation-driven, such as tax incentives or emission quotas. These constraints will to varying degrees, limit the grid operator’s ability to utilize the resource to handle changing operating conditions.
An example of a physical constraint is the battery’s charge/discharge cycle limit. A battery’s temperature must be tightly regulated to maintain safe and sustainable operations. Exceeding the cycle limit could excessively increase a battery’s internal temperate and accelerate the deterioration of its operating life. The manufacturer usually sets the limit of maximum cycles per year and could void the warranty if exceeded. In a zero-carbon grid, battery storage is expected to act as a big balancing resource that smooths the volatility of solar and wind generators. A low cycle limit could restrict the battery’s capacity to balance the system, reducing the grid’s ability to withstand risks. The mitigation of this constraint will highly depend on the advancement in battery technologies.
The Investment Tax Credit (ITC) is a good example when it comes to the soft limit. ITC allows owners of a qualifying energy project to claim a tax credit up to a certain percentage of their project’s capital costs (26% in 2021 and 2022). Thus, it incentivizes the fast development of renewable energy projects by lowering the tax burden of the developers or the tax equity company they partner with. Take a solar and battery hybrid project as an example; the battery component must charge from the onsite solar system for the first five years to claim the full value of the ITC. While it is a great tool to accelerate renewable project installation, ITC can make grid charging extremely expensive in the first five years, preventing these resources from being fully utilized to fulfill their important grid roles. Specifically, the implications on the reliability could be significant during days when the solar is not enough to charge the battery due to weather or wildfire conditions.
Here are a few options to mitigate the risk implication of ITC on reliability. First, utilities can get into a power purchase agreement (PPA) early so that by the time the grid’s renewable penetration is high, the ITC constraint will have expired or soon do. Second, instead of retiring the thermal fleet, retooling them with zero-emitting fuels, and keeping them as backups in the grid for those tough days when storage is unavailable due to the ITC limit. Third, and this only applies to public utilities: if a public entity develops a project, the ITC constraint doesn’t apply. In addition, energy and tax policymakers need to monitor the progress of these projects and the penetration of resources that have ITC closely and adjust the incentives as needed so that they can appropriately reflect the full opportunity cost of the developers and the grid reliability.
Sufficient Transmission Capacity
Depending on where you are, additional transmission infrastructure could be a scarce good. However, renewable resources are usually locational, and chances are the areas where renewable resources are abundant may not match those that need them. This locational mismatch requires additional transmission capacities to bring clean energy to the grid. Furthermore, real-time operations need to deal with all kinds of grid issues, planned and forced, which were not and cannot be foreseen by long-term resource and transmission planning. Having sufficient transmission capacity reserve brings more flexibility and provides more options in real-time when a grid emergency occurs.
This article reviewed the characteristics of clean energy resources critical to real-time grid operations in the zero-carbon energy future. Reliable and controllable power from clean energy resources and sufficient transmission capacity are crucial to maintaining the future zero-carbon grid’s reliability. However, despite the recent developments in the energy sector, many challenges remain and need to be resolved shortly. Furthermore, it is important to note that many obstacles to a zero-carbon grid are fundamentally not driven by power systems but by policies and technological advancements in other fields. For example, the utility industry relies on advances in chemistry, material science, and forecasting technologies to relax or remove some of the physical constraints that limit the efficient use of resources today. Lastly, policy and financial incentives must be carefully designed and continuously reviewed to capture the fast-changing landscape of the energy space.
Disclaimer: The opinions expressed within the content are solely the author’s and do not reflect the opinions and beliefs of the company the author affiliates.
Copyright by Hui Zhang, 2021.