Insights When Renewable Energy Meets Power Grid Operations

[PeterDonis]

getting really confused about why we are bothering with all this "renewable" nonsense then if de carbonizing is not the over arching goal

The original issue that made renewable energy a thing was predictions, made in the 1950s, 60s, and early 70s, that we would run out of oil, or more generally fossil fuels, some time or other around now. That is still a significant driving force behind renewable energy and has nothing to do with de carbonizing for climate change reasons.

 

[essenmein]

The original issue that made renewable energy a thing was predictions, made in the 1950s, 60s, and early 70s, that we would run out of oil, or more generally fossil fuels, some time or other around now. That is still a significant driving force behind renewable energy and has nothing to do with de carbonizing for climate change reasons.

True in the past there were other pressures that made renewables interesting. Today though, my understanding is that the motivation is the CO2, I think there is more than enough discovered supply in newly accessible hard to get to reserves, oil sands, shale gas etc as well as known light crude reserves that plain running out is less of a problem, at least in the short-medium term.

I haven't really heard the supply shortage argument for renewables in a while.

 

[anorlunda]

Not going to lie, getting really confused about why we are bothering with all this "renewable" nonsense then if de carbonizing is not the over arching goal. Isn't that the whole climate discussion which is driving the initiatives?

We already have affordable reliable power generation, the only problem I thought was the CO2 thing.

I don't see why, didn't see why, there couldn't be a term or two added to the capital value/cost and marginal MWh value/cost function to account for characteristics of generators relevant to climate change.

That is still a significant driving force behind renewable energy and has nothing to do with de carbonizing for climate change reasons.

Those are all fair points, and deserve good answers.

• Some people want to push clean energy ASAP. I don't need to agree or disagree with that. My concern is the risk of moving one iota faster than As Possible. That could result in market failure, and non-clean energy producers leaving the market while we still need them to keep the lights on. We need those unclean sources to stick around and remain profitable until the day we don't need them any more. We might like to punish them by forcing them out of business, but we mustn't punish the public as a side effect.
• One can argue for a carbon tax. IMO that is preferable to putting a thumb on the scale in markets. Energy markets, stock markets, commodities markets, any markets all depend on voluntary participation. Fairness, and and even playing field are paramount to convince participants to partake in markets. If they feel that the market is becoming unfair, they might walk away. So even if a carbon tax might annoy the hell out of some people, it is IMO far less damaging than putting a thumb on the scale in open markets.
• Solar PV and Wind power are wonderfully attractive technology. Not since Niagara Falls (hydro power) have we found something so close to free and unlimited sources. Carbon concerns aside, it would be foolish to not exploit those technologies as much as we can. So it is unnecessary to push carbon as a priority higher than keeping the lights on.
  
  Solar and wind will be expanded and utilized ASAP with or without climate concerns. They continue to have competitive cost advantages that assure that they generate as much as practical without giving them any unfair advantages. With less confidence, I also believe that withdrawal of all subsidies, priorities, and preferences would not slow down the growth of renewables significantly.
• I am confident that if we added an environmental term to the cost calculations, that we would loose the confidence of fossil fuel power makers. They could panic and stampede exiting the power business, and leave the public sitting in the dark.
• IMO too many people have their minds stuck in the old-fashioned utility model where the government could just order them to do anything and everything, as long as they authorized them to charge whatever fees they needed to make a guaranteed profit. Those days are gone. We the people (via governments) can order suppliers to shut down, but we can not order anyone to remain in the power business as participants or order anyone to invest new money in power infrastructure.
• South Australia should be a cautionary case study in what happens if you change too fast. They changed so fast to renewables, that they neglected reliability. They belatedly woke up to the reality of possible repeated brownouts and blackouts for a decade to come. It was a real panic until Elon Musk rescued them with a huge battery storage scheme, on a 100-days-or-it-is-free boast. But even Elon Musk would not be able to rescue a population much larger than South Australia.

 

[essenmein]

When evaluating cost of an energy source, given the customer demand (ie society) is for essentially continuous 24/7 up time, would a better strategy be to evaluate the cost of the intermittent sources together with the storage required for them to deliver the 24/7 energy supply?

This would certainly be more accurate when comparing to other non carbon based sources that do natively provide the continuous 24hr supply.

 

[anorlunda]

When evaluating cost of an energy source, given the customer demand (ie society) is for essentially continuous 24/7 up time, would a better strategy be to evaluate the cost of the intermittent sources together with the storage required for them to
deliver the 24/7 energy supply?

That's a good thought.

A resource does not need to be 24x7x365 to be useful.

Also, I think storage is considered a separate entity than the intermittent generation even if they are owned by the same party. Why? Because each resource has advantages and disadvantages, and should be free to bid separately to maximize their usefulness and their payments. Constraining the two to be coupled may be sub-optimal for the owner.

But most important, the market does not choose anything based on estimates. It chooses based on bids. It is recommended that owners bid their marginal costs, but it is not a requirement. Therefore, we can not assume that bids reflect costs.
Remember that accepted bids are paid the clearing price, not their bid price.

 

[anorlunda]

Several posts have been split off into a new thread.
https://www.physicsforums.com/threads/solar-pv-versus-solar-thermal.971189/

 

[Rive]

But at some point, whether policy makers choose to deal with it or not, that tilted playing field will start affecting solar. At that point, someone will build a new solar plant that causes other solar plants to have to curtail production on their best days. That's when solar implementation hits the ceiling.

Can't wait for that time. PV solar - by its electronic nature - would be a perfect tool to take its share in balancing the grid (daytime).

We the people (via governments) can order suppliers to shut down, but we can not order anyone to remain in the power business as participants or order anyone to invest new money in power infrastructure.

Not as if it was not tried, you know... It was just few years ago that (in Germany) the coal/gas power plants tried to leave the market en masse, mostly on the south, due the falling prices. The problem was, that wind is most concentrated on the north, so the building of the north-south power line could not be delayed any longer: also, this amount of closure was a clean stab into the amount of reserves necessary at winter. The first reaction - the permission for most closure requests was denied.

The follow-up was even more interesting. To grant a still acceptable profit to plant owners and to prevent them leaving the business a new mechanisms were implemented, but the weight of the so called 'strategic reserve' was a bit of an eyesore to many countries around, as an example for protectionism // unwillingness to take responsibility and further pushing weird ideas onto neighbors.

...to invest new money in power infrastructure.

The main problem (still not too frequently admitted) is that the additional infrastructure required by intermittent sources will has intermittent usage statistics. The perfect example - I think - is the already mentioned new north-south power line in Germany. It is necessary to deliver the wind energy from north to south, but the circumstances when it is really needed at full capacity happens only a few weeks in a year.
Sometimes I have a feeling that the violent NIMBY opposition to that power line what is often mentioned as the main reason behind the delay is actually founded by the future owner

 

[anorlunda]

Not as if it was not tried, you know... It was just few years ago that (in Germany)

Thanks for that information @Rive . It helps illustrate the point. Some people may think Germany was too heavy handed in that action, but South Australia was too light handed. Both cases argue for putting level-headed analytical engineers like me in charge of policy instead of politicians, lawyers, and voters.

The perfect example - I think - is the already mentioned new north-south power line in Germany. It is necessary to deliver the wind energy from north to south

Good example. In the article, I stress thinking on the continental level. Extrapolate more into the future. It is foreseeable that there can be so much North Sea wind power, that Switzerland, Italy, the Balkans, Greece and Turkey all want a share of it. What will the NIMBYs say about those power lines?

 

[essenmein]

The main problem (still not too frequently admitted) is that the additional infrastructure required by intermittent sources will has intermittent usage statistics.

To me this is the problem in general with intermittent sources. You have to put in many times more material to cover the large peak power when the average power is low.

A 10MW wind turbine with 33% capacity factor has for example 9x more copper than needed vs a device that makes 3.3MW continuously. This affects all the parts that connect the turbines to the grid, transformers etc etc. You have to build 10MW system to get average 3.3MW, and sometimes nothing. It becomes even worse if you want to do say 100% wind power, you need multiple sites where each site can deliver all your needs since it could be the other site has no wind that day. So if your needs are still the 3.3MW, you now have at least two 10MW turbines to guarantee the minimum 3.3MW... now you're at 18x more copper than needed (for example).

Interesting you mention NIMBY, Europe is already littered with wind turbines, how many more can they build before every where you look on the horizon you see wind turbines?

 

[anorlunda]

You have to put in many times more material to cover the large peak power when the average power is low.

You must add diversity to be able to say that. With wind, you mentioned multiple sites. With solar, no amount of extra panels will make power at night.

Surplus capacity helps only when the intermittent fluctuations are quasi-random. There are also transmission limitations that make it difficult and expensive to share wind or solar diversity between say Vancouver and Halifax.

On a seasonal time scale, hydro is intermittent.

We are familiar with 24 hour cycles of intermittent load demand. On the time scale of decades, load demand can also be intermittent. Think of the great depression, followed by WWII.

To make good policy, one must simultaneously consider all relevant technology, geography, and time scales.

 

[Jimster41]

• One can argue for a carbon tax. IMO that is preferable to putting a thumb on the scale in markets. Energy markets, stock markets, commodities markets, any markets all depend on voluntary participation. Fairness, and and even playing field are paramount to convince participants to partake in markets. If they feel that the market is becoming unfair, they might walk away. So even if a carbon tax might annoy the hell out of some people, it is IMO far less damaging than putting a thumb on the scale in open markets.
• Solar PV and Wind power are wonderfully attractive technology. Not since Niagara Falls (hydro power) have we found something so close to free and unlimited sources. Carbon concerns aside, it would be foolish to not exploit those technologies as much as we can. So it is unnecessary to push carbon as a priority higher than keeping the lights on.

@anorlunda
The problem with a carbon tax is that is has perjorative connotations compared to a market base adjustment. I would pay it happily, others would use the nature of approach to paint it as being anti-market. I get your point that it's the intersection of the polis and the market, which has always been a tricky pseudo discrete gap, for very good reasons.

I do think that having a debate that centers on ISO's requirements for the operation of the "largest machine in the world" whereby said ISO's come out of the shadows, claim their thrones and say to the utterly dependent public - we need to have a debate with a specific mechanical outcome - i.e. fair pricing of carbon in order to operate this machine reliably - is a nice way of building an important bridge across that gap.

Love your second quote there. I have worked with power industry folks my entire career. Tremendous respect for their commitment, dedication, capability... and it's not building video games or robotic vacuums. It really matters. I always like the ones who have managed, despite being taken totally for granted, under-rewarded and publicly berated almost constantly still maintain the childish notion that there are such things are "cool machines". I think it's a vital human instinct to recognize the right tools.

Having said that - I don't think I fully buy the idea that markets are "open". They are always a mix of of "owned by producers" and "open to new competition that has met an often completely engineered set of barriers to entry". Not saying that's what you describe...I'm just saying it's a bit disingenuous to say that pricing of carbon should only enter the market as a socialist tax, that it doesn't meet the criteria of machine constraint. It feels to me like saying that all hedges against risk have an intrinsic emotional component. I would argue hedging against risk is a totally mechanical (economically speaking), non-emotional response to uncertainty - which is intrinsic to nature (something economists are free to admit) to include hedge against risk in control design. The emotional component comes with "how much hedge is enough". Adding the carbon vs. less carbon term would be/could be pitched as carbon -policy-neutral (just prepping the machine for required control - because we keep being asked to run with much more diverse circuit behavior).

After that, lots of schemes for iterating about the control setting could be debated. But now their efficacy can be quantitatively tested by asking - do they let us run the machine more responsively. What implications does the machine's response to control (under current and possible future conditions) imply about possible values of control...

Another cool project I had the opportunity to work on was a high fidelity simulation of possible evolutions of an entire state's generation portfolio with degrees of freedom including penetration of renewables, storage and demand-response. By high fidelity I mean down to day ahead commit and 5 minute economic dispatch with a linearly and stochastic-ally perturbed demand signal. As expected, it showed some expected and some highly unexpected things. Fun as heck. Point is it's a simulation of a machine - not a merely a philosophical debate. I know that not a perfect distinction but it's an important one.

 

[essenmein]

You must add diversity to be able to say that. With wind, you mentioned multiple sites. With solar, no amount of extra panels will make power at night.

Nope, you'd need to have sites spread over time zones to flatten that out!

re material use, doesn't matter what the intermittent source is, poor material utilization is a function of the intermittency. Basically any time your generation system is not producing due to lack of sun or lack of wind, that infrastructure is sitting there doing nothing, but since no power is not acceptable, there must be other infrastructure that picks up the load during that time.

 

[Rive]

there must be other infrastructure that picks up the load during that time.

That's 100% of the load (a third more, actually, since the additional reserves) already. The problems comes with the 'other' side: 300% wind (and/or PV, and let's throw water in the bucket too) still won't be able to deliver the same performance, yet it is somehow an expectation to eventually reach 100% renewable.

As an engineer, I would be already happy with reaching stable 70% CO2-free in my life. But I feel like those simple minded expectations at this point would be actually blocking the way there.

 

[essenmein]

A resource does not need to be 24x7x365 to be useful.

This is true, the issue comes though when comparing the raw $/kwhr for solar to the $/kwhr of something else, say hydro, if the intermittency is not considered somehow, then you are comparing apples to potatoes. If its not considered then solar will look like the answer to all our problems, when in reality this is not true, or more specifically if you want to use purely solar for energy, its a lot more money than just the panels.

 

[essenmein]

still won't be able to deliver the same performance, yet it is somehow an expectation to eventually reach 100% renewable.

To me this is a misplaced expectation.

I think a big failure has been concentrating on the "renewable" aspect as the goal rather than "abundant carbon free", if it has to be renewable then that limits the discourse to basically wind and solar, when in reality there are quite a few other technologies that meet the more broad, and IMO more accurate requirement.

 

[anorlunda]

This is true, the issue comes though when comparing the raw $/kwhr for solar to the $/kwhr of something else, say hydro,

I keep trying to tell you that reducing everything to $/kWh is oversimplifying. The difficulties you're having are of your own creation because of that oversimplification.

When real investors compare alternative A with alternative B, they may examine dozens of properties.

 

[essenmein]

I keep trying to tell you that reducing everything to $/kWh is oversimplifying. The difficulties you're having are of your own creation because of that oversimplification.

When real investors compare alternative A with alternative B, they may examine dozens of properties.

I think you are entirely mistaking my position, to me its NOT a good way to compare because it hides other things, my issue is that this is the way solar and wind are being marketed as "better".

Since its not clear there are other hidden costs, people cook the numbers to suit their own pet idea (even worse!)

eg:
Wind and solar beats everything!
https://cleantechnica.com/2016/12/2...-cost-of-wind-power-coal-nuclear-natural-gas/
Hydro is actually better!
https://www.hydroworld.com/articles...west-cost-source-of-electricity-globally.html
No no no, nuclear is the way!
https://cna.ca/why-nuclear-energy/affordable/power-rates/

 

[PeterDonis]

you'd need to have sites spread over time zones to flatten that out!

And a worldwide power distribution network that could handle that level of demand.

 

[anorlunda]

I think you are entirely mistaking my position, to me its NOT a good way to compare because it hides other things, my issue is that this is the way solar and wind are being marketed as "better".

This is true, the issue comes though when comparing the raw $/kwhr for solar to the $/kwhr of something else, say hydro, if the intermittency is not considered somehow, then you are comparing apples to potatoes. If its not considered then solar will look like the answer to all our problems, when in reality this is not true, or more specifically if you want to use purely solar for energy, its a lot more money than just the panels.

If I misunderstand, I apologize. But the 2nd quote sounds like your remedy is to bake in capital, maintenance, and other types of costs into the $/kWh figure. That is the oversimplification that doesn't work. To fairly compare something like PV versus hydro, you need a whole sheet of paper (maybe a whole book) to describe each alternative, not a single number. You need it because they really are apple and potatoes. You need it because factors such as reliability, project duration, permit requirements, speed of response, available contractors, land footprint, scalability, and many properties other than power generation are significant in a comparison.

Not all issues can be settled in an online debate, or by a single sentence in an article.

 

[essenmein]

If I misunderstand, I apologize. But the 2nd quote sounds like your remedy is to bake in capital, maintenance, and other types of costs into the $/kWh figure. That is the oversimplification that doesn't work. To fairly compare something like PV versus hydro, you need a whole sheet of paper (maybe a whole book) to describe each alternative, not a single number. You need it because they really are apple and potatoes. You need it because factors such as reliability, project duration, permit requirements, speed of response, available contractors, land footprint, scalability, and many properties other than power generation are significant in a comparison.

Not all issues can be settled in an online debate, or by a single sentence in an article.

Yeah and likely I haven't been particularly clear, mostly because I don't want to write a novel, I'm just posting while all my little cpu's are busy solving stuff for me.

Anyway, the whole point I wanted to make, is that we (humans) need to be really careful when comparing the apple to the potato and then deciding which one we don't want, both have their place!

The reason I was talking about trying to come up with a number that rolls all those things together is to avoid this problem where different groups are using what on the surface looks like the same "metric" ($/kwhr) but end up with numbers that makes their thing look best and the other guy bad, then you read another article and its the reverse, so whos right? You don't know.

 

[mfb]

It is hypothetically possible to build a power plant that sells nothing other than reserve capacity, never generating a single MWh in its lifetime.

Pure storage solutions are somewhat close to this - they use their reserve capacity (unlike your hypothetical plant) but they don't produce net electricity overall.

With less confidence, I also believe that withdrawal of all subsidies, priorities, and preferences would not slow down the growth of renewables significantly.

Germany's new solar installations dropped to essentially zero after the subsidies for new installations reached 120 Euro/MWh. At that level you wouldn't expect the market dynamics to be very important for the decision for or against new installations - you live from the subsidies anyway.

The problem with a carbon tax is that is has perjorative connotations compared to a market base adjustment. I would pay it happily, others would use the nature of approach to paint it as being anti-market.

I see a carbon tax as pro-market. Let the power plants pay for the external costs they cause.
Coal power plants would have gone out of business long ago if they would have to pay for the pollution and follow-up costs from CO2 emissions they cause.

 

[Rive]

Some people may think Germany was too heavy handed in that action...

Well, I too think that in this action, as mitigation for a self-created trouble Germany was actually right. The problem lies with the political background/implications.

Creating low prices by subsidies, then 'saving' their own only while pressuring the capacity of the neighbors the same time: not building the necessary infrastructure and intentionally maintaining bidding zones which are inadequate to follow physical flows while congesting the transmission lines of neighbors by loop flows: pushing the blame on the victims and wielding the whole 'green' thing as a tool for political warfare ...

As far as I know right now Germany has no cross-border link left which is not HVDC or AC with a PST guarding the flow due the reasons above. But about the bill and what it took to finally reach this point...

 

[anorlunda]

Creating low prices by subsidies, then 'saving'

That is what I call "tinkering" with the markets. Put in market features that are not fully understood, then adding urgent patches as the negative consequences become clear. Then patching the patches. That in a nutshell, is what made California vulnerable to Enron in the year 2000. When you tinker, you leave loopholes.

I do think that having a debate that centers on ISO's requirements for the operation of the "largest machine in the world" whereby said ISO's come out of the shadows, claim their thrones and say to the utterly dependent public - we need to have a debate with a specific mechanical outcome - i.e. fair pricing of carbon in order to operate this machine reliably - is a nice way of building an important bridge across that gap.

The problem is that the wholesale markets that the ISO runs are so abstract, and so removed from a consumer's monthly bill that the public doesn't understand, and the public is totally uninterested in these issues. Public opinion is more easily driven by inflammatory sound bites, and doomsday predictions.

In fact, unless there is a blackout or an impending crisis, the entire power grid is a crushingly boring subject for most people. I've learned from a lifetime as a power engineer, if I answer the question "what do you do?" at a party, the result is that people instantly walk away or change the subject. (Fortunately for me, I met my life's love before becoming a power engineer. :-)

Another cool project I had the opportunity to work on was a high fidelity simulation of possible evolutions of an entire state's generation portfolio with degrees of freedom including penetration of renewables, storage and demand-response. By high fidelity I mean down to day ahead commit and 5 minute economic dispatch with a linearly and stochastic-ally perturbed demand signal.

Please please, fund me to do that simulation. That has been my wet dream for decades. Not just me, but lots of other engineers. There have been several attempts, but the problem is difficult. You simplify enough to make it practical, then the results are doubtful because of the simplifications. It lies somewhere between first principle physics and economics, and predicting future Dow Jones stock prices.

Germany's new solar installations dropped to essentially zero after the subsidies for new installations reached 120 Euro/MWh. At that level you wouldn't expect the market dynamics to be very important for the decision for or against new installations - you live from the subsidies anyway.

I'm sure that's true, but there is a Moore's Law - like evolution going on here. Solar PV costs halve every 3 years. Wind is also making fast strides. Therefore, what failed 3 years ago, might thrive 3 years from now. Policy based on a 10 year future horizon is a pretty good way to do it.

Traditional power engineering thinks of physical facilities having a 40 year lifetime. That it challenged of course in a rapidly evolving world, but still 10 years per time step is not bad. So looking forward one step, I think of solar prices as $2^{-3}$ times today's price as a planning figure. That is clearly in the no-subsidy-needed range.

 

[PeterDonis]

I see a carbon tax as pro-market. Let the power plants pay for the external costs they cause.

This assumes that the government has accurate knowledge of what those costs are. I'm highly skeptical of this assumption in the case of carbon.

 

[anorlunda]

I want to be clear. I have no public pro/con position on carbon tax. I said only that it is less dangerous than putting a thumb on the market's scale.

 

[mfb]

Traditional power engineering thinks of physical facilities having a 40 year lifetime. That it challenged of course in a rapidly evolving world, but still 10 years per time step is not bad. So looking forward one step, I think of solar prices as $2^{-3}$ times today's price as a planning figure. That is clearly in the no-subsidy-needed range.

I would be really surprised if installation costs can drop that much. The modules - maybe.

This assumes that the government has accurate knowledge of what those costs are. I'm highly skeptical of this assumption in the case of carbon.

Well, it is certainly not zero. The pollution from ash is easier to estimate, and that alone would make coal not competitive any more.

 

[anorlunda]

I would be really surprised if installation costs can drop that much. The modules - maybe.

Your right. My number was misleading because of that.

The near future for installation of utility-scale PV is complicated because we expect many solar farms to be upgrading with new panels; perhaps once every 3 years. That partially re-uses existing installation investments. That is good, but makes forecasting more difficult.

 

[CWatters]

It seem that we still have things to learn here in UK/EU...

Regulators here issue REGO (Renewable Energy Guarantee Origin) certificates to renewable energy generators for each MWh they produce. These certificates are used to prove statements made about the Fuel Mix a particular energy company claims to deliver.

Unfortunately these certificates can be traded. So an energy company can buy electricity from a fossil fuel fired power station and market it as 100% renewable as long as they buy the corresponding number of REGO certificates.

For some reason these certificates trade for around £1 each. So the cost to an energy company per customer is virtually negligible. This means it's way cheaper to by electricity from a fossil fuel generator and green wash it by buying an REGO than it is to buy electricity from a renewable source.

Last year one company supplied 3.7% of their electricity from renewable generators, this year buy buying REGO they are able to claim all their electricity is 100% renewable.

 

[PeterDonis]

it is certainly not zero

Not if you assume that the effect of CO2 emissions is net negative, no. But I am also highly skeptical of that assumption. Just on the most basic heuristic level, CO2 adds something to the greenhouse effect, but also increases plant growth. Which effect dominates under our current conditions? Nobody knows for sure. And that's just the most basic heuristic; a really proper treatment would require a precision of economic modeling that we don't have.

The pollution from ash is easier to estimate, and that alone would make coal not competitive any more.

Yes, this I agree with.

 

[Rive]

Traditional power engineering thinks of physical facilities having a 40 year lifetime.

With that comes further problems. The actual buzz in Germany is the coal phase out with a date of 2038. By that time most (coal) power plants (and connected infrastructure) will exceed 40yrs of age, of course with some modernization/renovation involved - but still in good, working shape. The problem is the amount of compensation required to balance the forced phase-out.

Traditional economists expects value written-off by 30yrs, so some thinks no compensation should be paid at all. But will be the value of those working, fully functional plants will be zero?...