Renewable Electricity Futures Study NREL Report Critical Assessment

Posted by David on Jun 18, 2012 in Market Insights, Power, Renewables | 1 comment

Renewable Electricity Futures report study by the National Renewable Energy Laboratory (NREL) was just released.  As with many reports done by numerous participants, there are several areas of concerns which I have identified below.  I will admit, it is much easier to be critical of a report after the fact versus while you are working on it.  However being accepting of critical assessments, which NREL based on my experience has always been willing to do, will improve the future reports.    On the positive side NREL did a great job in directionally highlighting the concerns to moving to higher renewable electricity future.

As I pointed out in my previous blog, the levelized approach is not appropriate for the electricity market.  NREL noted this as a concern and therefore addressed it by using GridView and dispatching hourly.  However, they only went part way to truly analyze the situation of large amounts of renewables.   They did note in their own report that the report lacked a reliability component.   However leaving out the hourly and reliability analysis is similar to leaving out the concerns for refill stations in an analysis to convert to hydrogen and/or natural gas vehicles.

My concerns for the report is the extent of work that was done while leaving out some very important analysis.  They noted they did 12 scenarios.   The key for this type of study is the information going into the models.  Given most of the information should have been available from laboratories; this keeps the study cost down.  Based on that, my personal budget for the modeling portion for this type of project is around $120-150K – see below for more details.  In addition, I would have not left out a very critical piece of the study.  Reliability is the key to sustained large penetration of renewables.   They noted in the study they could not do this in multiple parts of the report.   In addition they noted a full reliability assessment cannot be done.   I agree with this statement, but that does not preclude running some various sensitivities to understand the reliability issues.   I will show below one easy add-on that would have indicated some level of reliability.   One can model directionally, the reliability balance needed for large renewables without doing a full blown transmission study.  I understand their following statement:

“System Adequacy: To understand overall system adequacy fully, detailed simulations would be required to measure loss of load probability with the correct probability density functions of various power system variables. Many scenarios would need to be analyzed to understand whether the overall electric system has adequate system capacity to meet load under a variety of operating conditions. With conventional generation units, this type of study typically involves running reliability models using the forced outage rate and mean time to repair of the full suite of conventional units, while also considering possible changes in electricity demand, to estimate the loss of load probability. With high amounts of variable generation, analyses of this type become somewhat more difficult due to the unique behavior of variable generation. As discussed elsewhere, ReEDS addressed system adequacy largely on a statistical basis, whereas GridView was used to analyze a subset of the scenarios to determine whether loss of load would be expected in 2050. Further analysis of system adequacy would require an assessment of a broader array of scenarios, using GridView or alternative tools, as well as more detailed assessment of system voltage and frequency.”

However the study is about renewables penetration not the existing reliability of the grid.  The addition of renewable generation produces a dynamic similar to loss of load probability via the loss of generation as weather changes.  Having an understanding of the incremental needs of reliability with more renewable is the key.  Modeling a level of reliability is not that hard once you have hourly dispatching model.

The critical scenario they left out and perhaps the big fault of the study is the level of generation capacity needed to balance the system to produce a level of reliability of a loss of load probability level.   With significant renewable, particularly wind and solar, one could mathematically derive an acceptable level of the expected loss of generation level given the sporadic weather patterns.   This expected loss of generation should have been focused on the peak time period.  Running the analysis on average weather expectations is not an appropriate level of capacity planning.   I am sure there is a reasonable level of risk expectations to see limited and/or sporadic wind and solar performance during peak time periods.   Figure ES-6 should have been supplemented with this “weather risk case” (perhaps only few days of work).   What I find immediately alarming in the report is the limited amount of capacity build of gas units as more renewables penetrate the market – Figure ES-3.   In my mind, I would expect a sustain if not larger capacity buildup of gas units as the larger penetration of renewables.   However, they have it declining.  I believe the generation piece can grow very large for renewable, but I suspect the capacity chart not to look the same.   The likely error in the study is largely because the choice of fossil fuel technology was limiting.   Looking at the Black & Veatch study used for technology selection for the study, I am shocked to see very limited flexible power selection.   I know for a fact B&V should have known and included reciprocating engines to aero-derivatives given the study was about significant renewable generation.   As the study noted, flexible generation is a requirement including requiring conventional plants to be flexible.   This requirement would have driven technology improvements and/or adoption of the un-traditional manufacturers.   The current selection choices biases the study to traditional technology manufactures (GE & Siemens).   Balancing the system can be done by generation not just transmission, storage, and curtailments.  However one cannot see this without offering the choice in the model.  Depending on large transmission builds where a 90 mile line takes 13 years is a problem.  Also the dependence on large compressed air energy storage (CAES) when it has yet to be deployed in either bedded salt or in porous rock formations is another problem.

My hypothesis would be including technology such as the Wartsila reciprocating unit – which is up and running in multiple US locations – will lower the cost for renewable penetration given the technology capability to ramp and start within minutes and also its very low plant minimum capacity (4%) with still a very good heat rates (7.2-8.5 mmbtu/MW).

Designing and running future scenarios and then deciding and understand the optimal and robust choices is my forte.   Working at AEP I had to  cover 11 states and had to deal with multiple resource plans with multiple biases to different fuels.  Our decisions at AEP can and will influence the market therefore we modeled the entire US.   Bi-yearly we ran 6 Scenarios for the US – at least two represented economic conditions (low and high).  Others typically dealt with various legislations.  The core team to model and evaluate these scenarios represented me and another colleague.  The input team represented my entire team along with the various parts of the organization.   The decision to build goes beyond economics, but it is a good place to start.  However as many modelers will tell you – you will be only as good as your input.  Therefore more time should be dedicated to the input than the output – particularly when you are starting out.  It is crucial to examine the conditions confronting you and plan accordingly.  Details of your runs need to balance with precisions of your knowledge.   There is no point in over analyzing as much as under analyzing.

As many know, I have served on the National Renewable Energy Laboratory Advisory Panel.   There are many very studious hard working individuals at NREL.  They continue to improve and come up with new concepts and ideas.  Though I was critical on this study, I do see much progress and expect further progress from them.  Technically, I am sure the US can operate at 80% level of renewable generation.  The question really is the cost and the benefits of obtaining that level.  There are a lot more questions I can posed for the report, but I will have to leave it for another day and time.

At All Energy Consulting we can help you run and model your resource options/plans.  We can either offer a third-party assessment or help design and build you a process plan for which you can manage yourself.  To run a resource plan, the core offering would be a base forecast along with two scenarios.   This would run would be about $60K.   For additional scenarios and risk simulations we are talking about $10K/per design.

I hope all the fathers of the world had a great day with their family.  I did!  In fact, I got to spend some time with ALL my kids (5) – even my two teenagers.  And I had time to read the report, write, ride 20 miles on my bike, go boating with the kids, wakeboard, run 50 risk simulations of the Eastern Interconnect for one of my clients, and have a picnic with the family and friends.  Life can be short so make it worth it!

Your Energy Consultant,

David K. Bellman

614-356-0484