Electric Utilities Increasingly Open to Renewables

Graphic source: State of the Electric Utility 2017

by Thomas Hadwin

Editor’s note: Tom Hadwin submitted this article before Dominion and Appalachian Power filed Integrated Resource Plans Monday detailing forecasts of dramatically higher solar energy generation over the next 15 to 25 years.

According to a recent article in Utility Dive, U.S. electric utility concerns about integrating higher levels of renewables into the grid are declining.

Utility Dive surveyed more than 600 utility professionals in their fourth-annual State of the Electric Utility (SEU) survey. More than 80% of the respondents expect renewable energy resources to increase moderately or significantly over the next ten years in their service territories.

The lower costs of renewables and natural gas compared to other conventional generating sources are driving the trend to greater acceptance. PJM Interconnection Vice President, Mike Bryson, agrees that the very low price of natural gas and the declining price of renewable energy cause these sources to be favored over new coal and nuclear generation.

Survey respondents agree, with 62% expecting moderate or significant growth in natural gas generation, while 72% predict at least moderate coal retirements in the upcoming decade.

Southeastern states are less enthusiastic about the prospects for growth in wind resources. A majority (58%) of those responding from Southern states did not expect growth in wind generation, which might be due to the lower-than-average wind resource in the region. Advances in advanced turbine technologies might yield prices competitive with natural gas generation in the Southeast by 2025. In other parts of the country, especially the Great Plains, wind generation is often the lowest cost source of electricity today.

Texas is currently the nation’s leading wind generator with 18 GW of nameplate wind generation, with plans to add 14.5 GW more wind generation and 27 GW of solar by 2031 without any statewide Renewable Portfolio Standard. Economics are the driving force.

Utilities expect smaller scale solar will grow even faster than utility-scale facilities with 83% forecasting at least some level of growth in distributed generation solar units. This rapid build-out of solar will require other complementary technologies. Nearly 80% of the utility respondents expect moderate or significant growth in distributed and grid-scale storage units, while 81% predict more grid communication technologies and smart inverters will be required to ease grid integration of additional solar.

In last year’s survey, grid integration issues were the top concern, reported by 32% of respondents. This year, half of that number (16%), said grid integration of renewables was the most pressing problem. Instead, 35% of the utility officials indicated that since the election regulatory and market uncertainty are now the greatest concerns.

Few respondents reported concerns about transmission constraints, stranded assets, or having adequate flexible generation to cover variations in renewable output, which are issues often associated with renewable growth.

This might be due to the recent development of affordable and effective grid integration measures. A National Renewable Energy Laboratory (NREL) study confirms that higher levels of renewable energy will not disrupt system reliability. The study showed that the Eastern Interconnection, the world’s biggest power system, of which PJM is a part, can reliably add ten times more renewable generation than exists today.

Renewables then would comprise about 30% of the system capacity. The remainder would be gas, coal, nuclear, hydro and other types of generation that would provide dispatchable power to cover the variations in the output from renewable sources.

Batteries are not yet cheap enough to make solar plus battery combinations competitive with natural gas-fired combined cycle plants for base-load use. But solar plus batteries is currently cheaper than the more expensive peaking units in some regions. The batteries respond more rapidly to load fluctuations than do existing peaking units. Expected ongoing price declines will make their use more widespread.

Utility officials reported many reasons to invest in renewables and distributed energy resources. Customer demand for clean energy, sustainability and compliance with renewable portfolio standards were the three factors mentioned the most.

Major corporations are leading the campaign for cleaner energy. According to an Advanced Energy Economy report, 71 of the Fortune 100 companies have sustainability targets, and are looking to expand in regions that have easy and affordable access to renewable energy sources. According to the Rocky Mountain Institute, 8 GW of renewables are now on the grid because of corporate demand. Customers want more clean energy, they say.

Consumer demand was a driving factor for electric co-ops; 38% of whom chose that option. Investor owned utilities (18%) and municipal-owned utilities (23%) with large commercial customers selected sustainability goals as the main reason they were expanding renewables, as did utilities in New England, the Mid-Atlantic and the West Coast “where environmentalism is prominent,” the survey notes.

The survey projects that utility support for renewables is likely to strengthen. “Besides satisfying consumer sentiment for clean energy, these resources offer predictable purchase prices and are valuable hedges against fluctuations in natural gas prices,” reports the survey.

Innovative utilities are using renewables to gain a competitive advantage for themselves and the state within which they are located. Recently, Omaha Public Power District created a new renewable energy tariff devised to lure tech companies to their service territory in Nebraska. Up to now, many utilities adopted renewables to satisfy Renewable Portfolio Standards or other mandates.

“But over the past decade,” according to the survey, “as the cost of wind and solar have dropped, utilities have started to see them as opportunities, rather than obligations.”

Thomas Hadwin, a Waynesboro resident, formerly worked for electric & gas utilities in Michigan and New York.

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22 responses to “Electric Utilities Increasingly Open to Renewables

  1. Physics 101 – it’s all solar energy, baby, meaning its all nuclear energy. Just various ways to capture and convert it. Coal is just another solar energy battery! A healthy dose of solar and wind collectors is fine with me, as long as there is also enough dispatchable load to keep the grid energized when needed. No surprise that people are learning how to balance that all out.

    But as your other post demonstrated, even more so with the NIMBY explosion in the comment string, siting and building this out may be just as politically difficult as any other option. People want to turn on the lights but they want electrons to come to them via magic, with no power plants or wires to look at.

  2. solar is not compatible with any power plant that cannot ramp up or down quickly. That makes solar (and wind) incompatible with coal or nukes.

    for power plants that CAN ramp up or down quickly solar/wind can complement and hybrid gas/solar plants built . You can do that with diesel generation also.

    solar/wind should never be considered primary dispatchable fuels.

    but if you meld them with flexible dispatchable fuels they save money because when they are providing energy – you don’t have to burn gas.

    Finally – if you put solar/wind on the same physical site site as a gas plant – you’ve avoided the Nimby issue all together!

    these are not “theoretical”.. they exist in reality right now:

    if you’ve got the gas plant successfully sited – like DOminion has in Brunswick and Greensville – it’s hard for NIMBYs to complain about adding solar…

    and using solar when it is available would save Dominion money .. oh wait.. they need to burn the gas they’re bringing over with their pipeline…!

    and North Carolina has cleverly sited some of their solar next to poultry processing plants and hog farms once again steering around he NIMBYs.

  3. Anywhere there is a gas turbine plant – and that includes the powerlines distributing the electricity to the grid are places that solar can be installed
    and run in hybrid mode with the gas plant.

    just on a economic basis – it makes sense to do. If solar can generate electricity for less cost than gas – then why not – when it is available?

    the limitation would be on a per gas powerplant basis. In other words you would not install any more solar than the total output capacity of the gas plant running by itself.

    so the gas plant itself would run anywhere from 100% to 0%. It would run at 100% when no solar at all was available (night and rain, clouds) . It would run at 0% when solar was running at 100%.

    You could do this anywhere you had a gas plant.

    When you do solar this way – there is no issue with “intermittent” or “dispatchability”.

    the power plant is always ready to run at 100%.. the only difference is the days when solar is available.. it displaces the gas.

    Hybrid gas/solar plants are a reality right now. This is not a theory.

    the only thing keeping us from doing this is Dominion’s reluctance to do so and instead build their plants to be gas-only plants.

    You probably could do this on the Hampton Peninsula instead of claiming the only option is powerlines over the James at Jamestown.

  4. TomH, this is a needed bit of optimism in the gloom over urbanization generally. We need something to feel good about occasionally and the utilities’ turn towards renewable resource generation is one such thing.

    That still leaves me hoping for more attention to customer owned, “rooftop” solar. There are several forces making that more difficult today than it has to be — notably, the utter indifference of the building community and unresponsive local building codes — but first there have to be examples out there in every neighborhood to spread the word of home solar’s benefits and feasibility, and in Virginia there are not many of those.

    I still don’t like those solar equipment deals where the installer puts up his equipment for “free” in exchange for a customer contract to buy the electricity it generates at a rate that amortises the cost plus pays a healthy profit for the installer — even if it appears to costs the customer less than he would have paid Dominion. There are other ways to structure those deals to comply with existing laws. That said, solar electricity is coming to Virginia homes and businesses, and it doesn’t have to come in the form of utility-scale projects delivered over the grid.

    • Fairfax County is promoting solar for residents from April through June 2017. http://solarizenova.org/solarize-fairfax-county

      I think this is way too short of a window to get results.

    • Residential solar is the first place solar makes sense because all they need to do is generate power below their retail price for it to make sense. But their are complications. Having adequate roof space in the right orientation that is not shaded is often a problem.

      The residential PPAs that you mention were developed in the states that allowed them so that homeowners who could not obtain financing or make use of the tax credit could still get a reasonably priced solar system. Banks have been skittish about solar loans because of their complication with the real estate. Because the solar units are usually attached to the house, the bank is in second position behind the mortgage holder for the collateral, which complicates things. But some solar developers took advantage of the homeowner’s difficulties and charged more than they should have for these types of installations. But the solar company was taking a bit higher risk with these types of agreements too.

  5. I hope we’re going to see smart placement of solar. There are many appropriate places for cells that will blend in with other uses and would distribute them.

  6. just as with gas plants… using solar.. so can solar be used where electricity is consumed.. but it’s more complicated unless the grid is upgraded to be able modulate between electricity coming from the grid to where solar is negating the need for the grid power.

    I think on that issue, Dominion has a valid concern.

    at the gas plants – Dominion has direct control over how much electricity to produce from the gas.. they can modulate that right there on site in response to how much solar is generating at the same site. That works much like a hybrid car that automatically and seamlessly switches between “gas” and “battery”.

    but at the other end where Dominion is trying to keep the grid energized for say a thousand homes.. Dominion has no real way to know how much solar is generating at those thousand homes and thus how much to dial back the grid power.. and even worse when the solar is dynamic… and varying in real time. How does Dominion “dump” the grid energy when 100o different solar sites are generating at one moment and 800 a few seconds later or more realistically all 1000 are generating but at 100% then a few minutes later at 50% when clouds roll in?

    This is more like how solar would would with coal/nuke baseload plants that cannot vary in output in response to solar.. the only way to do that would be to idle turbines.. but you’d still be burning the coal or nuke fuel.. so the solar
    is not really saving fuel by displacing the coal/nuke – both will still run but the turbines would be idled.

    the only way that solar really “works” is if it can be melded as one side of a hybrid configuration where the other side can ramp up or down dynamically in response to the solar variations.

    How you do that with an energized grid is a much more difficult problem….. I would think.

    • Re: “At the gas plants – Dominion has direct control over how much electricity to produce from the gas.. they can modulate that right there on site in response to how much solar is generating at the same site. That works much like a hybrid car that automatically and seamlessly switches between “gas” and “battery”. But at the other end where Dominion is trying to keep the grid energized for say a thousand homes.. Dominion has no real way to know how much solar is generating at those thousand homes and thus how much to dial back the grid power.”

      LG, this is not at all correct. Dominion is NOT the system operator. Dominion does not run the grid. That is exclusively PJM’s job. PJM has just as much info about gas plants in KY as it does about those in VA (or PA, NJ, MD, etc.). It is PJM’s job to balance generation with load across its entire 13 State region, and it’s going to do that with the lowest cost resources regardless of where they are located (unless transmission limitations interfere). If the Dominion gas plant next to its solar plant costs the slightest bit more to run than a similar gas plant on ApCo’s system 100 miles away, PJM will run the ApCo plant.

      The other thing you are ignoring is, PJM knows what all those distributed solar units are doing. Most of them have separate meters on the generation (and on the electric consumption) which report their solar output in ( the bigger ones in real time). The ones that don’t — which must be very small to qualify for a single or “net” metering arrangement — show up as reductions in customer load when the sun shines or a cloudbank passes overhead — a phenomenon which PJM can and does model in the aggregate. In addition to all the generation and transmission switching, PJM also has all the demand-side-resources on its portion of the grid under its control.

      So, you say, “the only way that solar really “works” is if it can be melded as one side of a hybrid configuration where the other side can ramp up or down dynamically in response to the solar variations.”. Yes, BUT that “configuration” is the entire regional grid — not just the equipment located at a particular plant site.

      • re: ” LG, this is not at all correct. Dominion is NOT the system operator. Dominion does not run the grid. That is exclusively PJM’s job. PJM has just as much info about gas plants in KY as it does about those in VA (or PA, NJ, MD, etc.). It is PJM’s job to balance generation with load across its entire 13 State region, and it’s going to do that with the lowest cost resources regardless of where they are located (unless transmission limitations interfere). If the Dominion gas plant next to its solar plant costs the slightest bit more to run than a similar gas plant on ApCo’s system 100 miles away, PJM will run the ApCo plant.”

        yes… but let’s say that Dominion offers to supply electricity at some price and PJM takes it and Dominion then has the option of what to use to produce it and during the day when the sun is shining, they have the option of using gas or solar…

        am I wrong on this?

        • Doesn’t happen that way. Dominion does not bid to deliver electricity from its system at a price; Dominion bids to run a specific generator and deliver that unit’s output at a price. This puts the traditional utilities and the independent generators on exactly the same footing as suppliers to the wholesale market. Dominion has no option except whether to bid a given generator and at what price and subject to what conditions (for example, how quickly the unit can start up and shut down; minimum run times). The PJM system operator (assisted by computers) selects the least cost set of generating resources to run as customer consumption goes up and down.

          Accordingly — daily, Dominion bids its solar units, and its gas units, and so will every other utility and independent generator in PJM, including individual homeowners that wish to do so, and PJM decides which bids to accept, which units to “dispatch,” to achieve the lowest aggregate supplier price in the market.

        • LG, you say, “if Dominion is using their own site-based solar – they know EXACTLY how much it is putting out and they can balance that with their site-based gas. That method of balancing simply won’t work with distributed consumer solar.”

          I’m sorry but (as also posted earlier in this string) that simply isn’t true on BOTH counts. PJM is an independent system operator (ISO) operating under federal rules that require the utmost transparency and equal opportunity for all generators and LSEs to participate in the 13-state wholesale energy market which PJM runs. Dominion wears three hats, here: it is a generator/supplier of electricity to the energy market; it is an owner/ maintainer of transmission and distribution wires and transformers and other grid components; and it is an LSE — a buyer in the wholesale market of power which it resells to its retail customers. Dominion must keep its actions in each of those three arenas totally separate. It cannot operate its own generator without PJM’s permission, or switch a transmission line on or off without PJM’s permission, except in an emergency. Dominion’s wires are “open access” under federal law and rules, meaning, any independent generator can use them to sell to the PJM market, and any wholesale customer (like REC) can use them to buy from the PJM market. (Virginia also used to have retail competition but that’s a State matter and the GA killed it.)

          You are hung up on Dominion’s ability to run their system in the aggregate like they did before the mid 1990s. They don’t. They can’t. They are not allowed to. That is the significance of PJM as the ISO. TomH is saying the same thing, perhaps in kinder and gentler words, but believe us when we say it: Dominion’s day of operating its own integrated electric system without oversight by the ISO ended about 20 years ago.

          You mention a combined gas/ solar plant — it’s true, that is being built in Germany! On a weaker grid with a much higher percentage solar than just about anywhere else in the world. The significance is not that they are co- located for purposes of netting the plant’s output, but that they are located near enough to one another that they impact the transmission system in similar ways.

          You say, “so what happens to the LSEs if PJM cannot deliver? Do they then use their own equipment for their own service areas rather than make it available to PJM? If a consumer installs solar – are they selling it to PJM or the LSE?” The premise behind PJM (and every other ISO) is that PJM will ensure that the grid will deliver what is required so that everyone’s lights stay on — of course if the local wires are downed by a tree there’s no alternative but fix it, but it is PJM’s job to arrange for enough generation lined up and ready to run each day to meet the forecast loads. If PJM runs short, there will be blackouts. It is also PJM’s job to manage the resources available to it, spreading the blackouts around and not allowing one utility to hoard a disproportionate share of scarce generation. If a consumer has solar to sell, PJM will buy it. But PJM can only pay the wholesale market price for it. Most consumers will use their own solar to offset what would have been retail purchases from their LSE. In other words they don’t sell it at all but consume it themselves. Which is fine as far as it goes; but when they fall back on their LSE for the rest of their power needs, they may find it’s priced higher because of its high variability.

  7. Larry’s points about co-location of solar and gas are correct, so far as they go. What’s being overlooked here is that customer-owned solar is uniquely suited to distributed generation — which can provide an extra level of reliability to the grid. Unfortunately, our big two utility companies seem determined to allow solar only under their control so as not to threaten the profit stream from centralized generation. If we could tweak their business model a bit — SCC are you reading this? — it would be good for customers and no threat to long-term investors.

    • Well said. That, and a VA tax break comparable to NC’s.

      • I believe the state investment tax credits for solar have expired and they do not intend to renew them. Duke is trying to reverse the PURPA requirements and make other changes in NC so that they have most of the control of solar development in the state. These factors have combined to greatly reduce the development of new solar in NC compared to the past few years.

    • re: distributed non-utility solar verses utility-owned centralized solar.

      When the utility controls the solar and has the opportunity to modulate it with gas so that when solar is “UP” it reduces gas and when it’s not it then uses gas – that’s DIFFERENT than the utility with a gas plant – having to deal with thousands of distributed individual solar that is in various states of generation.

      I honestly don’t know how any utility could / would cope with thousands of generation points that vary dynamically.. how would you do that unless you
      did so at the major interconnect points (substations)… and even then if you had no gas plant there… what you’d have to do is dump the excess solar.. not unlike what they have to do when demand drops below what the coal/nuke baseload is generating.. you can’t reduce the fuel… ramp the output down.. so you just disconnect the turbines while the fuel burning just goes on.

      so back to the distributed solar. Dominion has the responsibility to provide adequate and reliable power to all of those solar sites when solar is not enough… so they have to commit their own resources – their own plants to be able to deliver all the power that will be needed…say at night when solar is down.

      the next day when solar comes up ..what does Dominion do with the plants that were running overnight? They have to shut them down, right…?

      but how do they do that with thousands of different solar sites coming up dynamically as the sun rises and/or clouds might be moving in across some or even all sites? That seems to be an almost impossible job for Dominion to do. They no longer could energize regional grids … conventionally with their power plants.. the region would be also receiving power from solar.. and not in a particularly predictable fashion.. they’d have to have super-granulated forecasting for the region to know how much net power the solar was generating – AND to be able to themselves – modulated in response to that.

      that’s why I was saying that if Dominion is using their own site-based solar – they know EXACTLY how much it is putting out and they can balance that with their site-based gas.

      that method of balancing simply won’t work with distributed consumer solar. It’s a much tougher job to balance/compensate for thousands of individual solar outputting power dynamically and Dominion has no easy way to measure that output unless they have a meter at each location and that meter is transmitting in real time to a centralized regional collector of that data that then can be cranked into a gas plant and substations…

      it would have to be a computer-controlled network..to do that…

      How could Dominion and other utilities “deliver” to PJM a certain amount of power from solar – if solar itself was varying dynamically?

      In short – I think it’s not a difficult job for a utility to run a hybrid gas-solar plant on a site where both sources sit .. and whose output is known and the gas can modulate.

      I don’t see how that works in a region with thousands of individual solar sites.

  8. Larry,

    Reread Acbar’s excellent summary of how economic dispatch works within PJM.

    “I honestly don’t know how any utility could / would cope with thousands of generation points that vary dynamically.”

    Thousands of distributed solar units would simply appear as changes in load and supply within PJM. PJM has decades of experience in dealing with such variations. Having solar or wind doesn’t make things very much different. In fact, the more distributed the solar is the less the variability because changes in weather or cloud cover don’t occur at the same time everywhere.

    There is no doubt that the grid will be more reliable and resilient when we have a two-way flow of energy and information that a modern grid will provide. This is where our utilities need to put their attention so that we can create a vibrant and innovative energy system that provides opportunities for many players, not just utilities.

    It is a good idea to put solar at the same location as gas-fired plants to make use of otherwise unused land and to share substation and transmission facilities. But it is not very likely that they would be used to balance each other’s output.

    The solar would run whenever the sun shines. There is a separate market for renewables in PJM and they cannot be compensated in the capacity market.

    All of the conventional units are bid at their price of production (or sometimes less if the utility wants them to run no matter what – such as nuclear plants). If a natural gas-fired unit (let’s say the Brunswick plant, a very efficient unit) is the next cheapest unit in the merit order – PJM will dispatch it. Dominion will want it to run at full power (to make the most money) until it can no longer be economically dispatched. Variations in solar output will likely be met by peaking units, whether they are Dominion’s or from some other source in PJM, depending on which is the cheapest.

    It is easy to confuse the operation of an electricity grid with water running in a pipe. Electricity does not work that way.

    Think of a computer network. When you send an e-mail it is dis-aggregated into packets. Different packets might travel in a multitude of paths through the network only to be re-assembled at the point of receipt so the recipient receives a perfect copy of your message.

    PJM manages the electricity “network”. A particular power plant does not have to balance the output of solar units that are in the same location. It is only necessary that the “network” remains in balance. That is what Independent System Operators, such as PJM, do. Dominion has to have its unit online when it receives its dispatch order and must turn it down or off when PJM directs it to do so. Dominion does not need to worry about variations in output from its solar facilities or from solar units owned by others.

    We are still working with a supply oriented scheme. As we modernize, variations in supply will be met with methods that alter demand. These will involve a variety of techniques including storage, and various demand response methods such as turning down water heaters or air conditioners. It will be a far more flexible and probably lower cost system than what we have today.

    We should not be making 40-year choices about the types of generating plants we build without considering their long-term fit in a modern grid.

  9. re: ” Thousands of distributed solar units would simply appear as changes in load and supply within PJM. ”

    I think different and here’s why. traditional “demand” is predictable with the time and day and temperatures…

    when you throw solar into that mix on a wide scale basis – it totally can change the demand profile… AND that profile will vary in less predictable ways on a day-to-day basis depending on weather..beyond just temperatures.

    It’s not that PJM can’t provide the power – it can – but it’s how the utility deals with “demand” that is not altered just by utility inputs but other imputs the utility does not control.

    re: ” It is a good idea to put solar at the same location as gas-fired plants to make use of otherwise unused land and to share substation and transmission facilities. But it is not very likely that they would be used to balance each other’s output.

    The solar would run whenever the sun shines. There is a separate market for renewables in PJM and they cannot be compensated in the capacity market.

    well again.. I do not agree.. power is power .. it should not matter how it is created or the folks that want to buy it other than the bid price.

    But again – it’s the dynamic variability of solar that is the problem that has to be dealt with for the grid to remain reliable in availability as well as the voltage. The utility has control over that variability if it melds solar with gas.. it can run the gas when it needs to to complement the solar – and it can not burn the gas – in the correct proportion when solar is available.

    Again -this is not theory… the newer power plants ARE gas/solar hybrids.

    without solar – demand is predictable.. like traffic – you can look at historical data to determine what the likely demand is for a region.. and prepare for it with your own plants or buy from PJM.

    That “works” for hybrid gas/solar also because the utility has control over the solar and knows how much gas to add to keep the power at the same level.

    but that does not work for distributed solar because not only are there thousands of individual sources but they are not steady, not reliable.. they change according to the time of day and cloud cover… storms..etc..

    so in a world without solar – the utility can fairly accurately measure demand .. it won’t be varying that much .. and it probably conforms to historical patterns.

    all that changes when things on the demand side change, in real time…according to what kind of weather is occurring.

    so let me ask .. it is said that PJM can handle up to 30% solar.

    why 30%? why not 20% or 80%?

    a utility running a hybrid gas/solar doesn’t have to worry about that. It just runs that plant at a steady output … and keeps it that way by modulating which fuel is burned.. when solar is high.. they can turn down the gas.. when solar goes low – they turn up the gas… but what comes out of that plant is the same …

    So.. moving on a little… if someone buys solar from PJM and it rains … what happens to the power that was to be delivered? Is it just not available and the would-be-buyer has to make “other arrangements” like buying non-solar power ?

    How does PJM guarantee solar when weather can change how much solar is actually available?

  10. “The utility has control over that variability if it melds solar with gas.. it can run the gas when it needs to to complement the solar”

    The utility is not the one deciding how to respond to variability. That is up to PJM. My point was that PJM has successfully run a system that responds to variability for decades. It has the tools to do so now when renewables contribute to some of that variability. It is usually a gas-fired unit somewhere that responds to that variability because gas-fired units can vary their output more easily than can other types of conventional units. But the variability can also be accommodated because more sunshine on solar units in Ohio can produce more output that compensates for temporarily reduced solar output in Virginia because of cloud cover. The system is complex and can be balanced in many ways.

    With new forecasting tools available to ISOs such as PJM, variations in renewable output have become very predictable. Variability does not mean unpredictability.

    “the newer power plants ARE gas/solar hybrids.”

    I think you are confusing co-location of solar and gas-fired units with some sort of “hybrid” operation (like a car). The utility does not have the authority to alter the output of its units without directions from PJM. The best way to deal with the variation (up or down) might be to alter the output of a unit somewhere else.

    “so let me ask .. it is said that PJM can handle up to 30% solar.”

    Our grid is old. Most of it is run with slow responding electro-mechanical devices, some of which are 40-60 years old. This grid is not designed to handle two-way flows of energy and information. It needs to be upgraded to deal with all of the requirements of a modern energy system, not just the incorporation of a higher percentage of renewables.

    As a higher percentage or renewables are included, the big problem becomes how to ramp up other types of generation to handle the evening loads as the sun goes down. Batteries and other technologies will be coming down in price to help deal with this as more solar is added. Wind and solar are often good complements because the higher nighttime output from wind balances with the daytime output from solar.

    “if someone buys solar from PJM and it rains … what happens to the power that was to be delivered?”

    No one buys “solar” from PJM. PJM sells electricity at wholesale to Load Serving Entities (LSEs), primarily utilities (private, municipal or co-ops). It does not matter how the electricity was generated. The price is set based on marginal pricing and transmission considerations (locational marginal pricing). The wholesale price is cheapest at night, when the lowest cost units are the only ones operating. It is most expensive when the most costly peaking units are setting the price. Solar helps keep the price down during the day because it displaces the most expensive peaking units.

    PJM does not guarantee anything because incidents can take out portions of the transmission system and make it impossible to get electricity to certain areas.

  11. “The utility has control over that variability if it melds solar with gas.. it can run the gas when it needs to to complement the solar”

    The utility is not the one deciding how to respond to variability. That is up to PJM. My point was that PJM has successfully run a system that responds to variability for decades. It has the tools to do so now when renewables contribute to some of that variability. It is usually a gas-fired unit somewhere that responds to that variability because gas-fired units can vary their output more easily than can other types of conventional units. But the variability can also be accommodated because more sunshine on solar units in Ohio can produce more output that compensates for temporarily reduced solar output in Virginia because of cloud cover. The system is complex and can be balanced in many ways.”

    my point is that demand the decades of demand-side variability is not the same as demand-side variability combined with distributed consumer-level solar. That’s “more” than before… and most folks say that that kind of variability puts strain on the grid to cope with it.

    “With new forecasting tools available to ISOs such as PJM, variations in renewable output have become very predictable. Variability does not mean unpredictability.”

    I agree on the tools – I don’t know what changes in the grid is required… say a particular location or region has a high install of consumer-side solar….

    “the newer power plants ARE gas/solar hybrids.”

    “I think you are confusing co-location of solar and gas-fired units with some sort of “hybrid” operation (like a car). The utility does not have the authority to alter the output of its units without directions from PJM. The best way to deal with the variation (up or down) might be to alter the output of a unit somewhere else.”

    I’ve posted it several times..

    so.. once again – Hybrid solar-and-gas power plant begins operation
    May 15, 2015

    http://www.pennenergy.com/articles/pennenergy/2015/05/hybrid-solar-and-gas-power-plant-begins-operation.html

    why does PJM care about what fuel produces the electricity it brokers for sale ?

    “so let me ask .. it is said that PJM can handle up to 30% solar.”

    Our grid is old. Most of it is run with slow responding electro-mechanical devices, some of which are 40-60 years old. This grid is not designed to handle two-way flows of energy and information. It needs to be upgraded to deal with all of the requirements of a modern energy system, not just the incorporation of a higher percentage of renewables.

    and this is what I’m talking about with consumer installed solar and the ability of
    the grid to cope with it How can a particular region buy power from PJM and deliver it reliably if the receiving areas has a large installed base of consumer solar?
    How do you deal with this? Does the utility or the state deny installations of consumer solar once it reaches the level that the grid cannot cope with?

    “As a higher percentage or renewables are included, the big problem becomes how to ramp up other types of generation to handle the evening loads as the sun goes down. Batteries and other technologies will be coming down in price to help deal with this as more solar is added. Wind and solar are often good complements because the higher nighttime output from wind balances with the daytime output from solar.”

    to this point right now – the only realistic alternative is gas turbines .. and I suspect those turbines have to be near the area of the varying demand because the grid cannot handle high variability of demand from afar.

    “if someone buys solar from PJM and it rains … what happens to the power that was to be delivered?”

    “No one buys “solar” from PJM. PJM sells electricity at wholesale to Load Serving Entities (LSEs), primarily utilities (private, municipal or co-ops). It does not matter how the electricity was generated. The price is set based on marginal pricing and transmission considerations (locational marginal pricing). The wholesale price is cheapest at night, when the lowest cost units are the only ones operating. It is most expensive when the most costly peaking units are setting the price. Solar helps keep the price down during the day because it displaces the most expensive peaking units.”

    so ..if the LSEs buys electricity – it does matter what fuel is used to produce it, right?
    so what’s the deal with classifying some of it as “renewables” if there is no distinction when the LSE buy it?

    “PJM does not guarantee anything because incidents can take out portions of the transmission system and make it impossible to get electricity to certain areas.”

    so what happens to the LSEs if PJM cannot deliver? Do they then use their own equipment for their own service areas rather than make it available to PJM?

    If a consumer installs solar – are they selling it to PJM or the LSE?

    Is it purchased whenever it is fed into the grid. with no preset amount of window of delivery?

    how do you handle that when you have tens of thousands of consumer-installed solar – .. and in reality whether they’re selling excess or not.. just the simple fact that when they use solar for their own use -they’re cutting demand to the grid … until a cloud rolls over and then tens of thousands of those sites automatically transfer demand to the grid. How does PJM and/or the LSE cope with that dynamic loading?

  12. Your comment – solar adds more variability than before.

    To some degree yes, but new tools are becoming available to deal with this as greater amounts of solar are deployed. There are 10,000 MW of storage out for bid this year. Much of it is for capacity. This would provide storage to offset variations faster and cheaper than can be done with peaking units. Some storage, such as in PJM, will be used for frequency regulation. Storage will get cheaper on the same timetable as more solar comes on the grid. This solar/storage combination will be a cheaper and much more flexible choice of generation than further additions of nuclear, coal or gas.

    The Aliso Canyon incident in California proved how rapidly storage could be deployed to meet an unexpected situation. Far faster than other options.

    A large compressed air storage facility is providing many hours of capacity for surplus wind generation to be captured and deployed to the grid when it is needed. These solutions make sense economically today, and will only get cheaper.

    It does not matter if the energy is generated by utility-scale facilities or thousands of distributed units. The surplus in the system will be stored and released when needed.

    “Hybrid solar-and-gas power plant begins operation May 15, 2015”

    The units in the article that you referenced are small microturbines (400 kW) that are also used for combined heat and power. They are installed with 600 kW solar units that are connected to a battery to even out their output. These would be suitable for a medium-sized business but are not the utility scale applications such as those in the pictures that you posted earlier. Those look like big combustion turbines that are co-located with solar units on a site that was originally used for a coal or oil-fired plant (notice the high smoke stacks in the second picture).

    “why does PJM care about what fuel produces the electricity it brokers for sale ?”

    PJM doesn’t care about the fuel, they care about reliability. They are trying to run a market so that price signals can direct the choices. That is why they are so concerned about how the new nuclear subsidies and other state policies such as RPSs are distorting the market price signals. Dispatchable units earn extra income from the capacity market that renewables don’t qualify for, but evolution of the storage market might change that a bit. They also have markets for renewables, and new services such as demand side management, and storage services such as frequency and volt/VAR control, and back-up capacity.

    “How do you deal with this? Does the utility or the state deny installations of consumer solar once it reaches the level that the grid cannot cope with?”

    No need to deny installations, especially in Virginia where we have so little solar. Following NERC reliability requirements and properly upgrading the grid for many purposes, will assure the reliable operation of the grid. Distributed generation, as I have said before, will actually improve the reliability and resiliency of an appropriately designed grid.

    Gas turbines are not the only method to deal with variations as I have described. As we advance in demand response techniques they will also be a carbon-free, low-cost option.

    “so what’s the deal with classifying some of it as “renewables” if there is no distinction when the LSE buy it?”

    Renewables operate within a different market in PJM than conventional units. That is on the generation side. Not the wholesale side.

    “so what happens to the LSEs if PJM cannot deliver? Do they then use their own equipment for their own service areas rather than make it available to PJM?”

    Utilities are always selling to PJM and buying from PJM no matter what. But they must operate within the constraints of the transmission system, whether the bottleneck exists because of storms, high temperatures, other outages, or whatever. However, if storms are knocking down transmission lines they might also be knocking down distribution lines so load is being reduced too. The transmission system is designed with redundancy and multiple points of access to reduce the likelihood of outages.

    “How does PJM and/or the LSE cope with that dynamic loading (from storms, weather, etc.)?”

    That is what we have been talking about. It doesn’t matter what the cause is or whether the generation is centralized or distributed, the system manager (PJM) must make the necessary adjustments to balance the system. Like any large system (13 states), variations tend to be dampened out because of the size. Many of the scenarios you are concerned about are easily dealt with by PJM and have been for some time.

    The growth in renewables (still a small presence within PJM) does add some new challenges but many new tools are also becoming available to deal with them. If we let the professionals do their job and if we can remove some of the politics from the planning process this will all sort itself out in a way that is beneficial for both the utilities and the ratepayers. Unfortunately, even though they claim they are in support of market forces and state’s rights, the federal government seems poised to gum up the works by favoring the short term interests of a variety of interest groups.

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