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Product Abstract

Technical and Economic Challenges of Flexible Operations under Large-Scale Renewable Deployment: Case Studies for Texas and California

Product ID:3002008897
Date Published:06-Jul-2016
Pages:70
Sector Name:Environment
Document Type:Technical Results

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Abstract

Intermittent electric power generation technologies like solar and wind have undergone massive transformations in recent decades, but uncertainty remains about the impacts of these developments on the power sector. In particular, the economic and engineering challenges of flexible operations for dispatchable assets, such as coal-fired and natural-gas-fired power plants, are influenced by the deployment of intermittent generators. This study is designed to inform power companies, researchers, regulators, and policy-makers about the technical and economic impacts of renewables on generation fleet flexibility, and how fleet flexibility characteristics may impact future investments in renewables.

Background

Fundamental properties of wind and solar generation resources have generated controversy about their economic competitiveness and appropriate methods to assess their value. The analysis presented in this report offers an approach to quantify the economic value of intermittent generation capacity, and demonstrates its dependence on renewable energy deployment levels, regional resource endowments, generation fleet flexibility, assumptions about regional electricity trade, and grid-connected storage. It assesses the technical and economic impacts of large-scale renewable penetration by linking two models, representing electric sector investments and detailed market operations.

Objectives

  • To investigate the implications of large-scale buildouts of renewable energy on wholesale electric power markets and asset operation in different geographic settings
  • To enhance understanding of the technical challenges of flexible operations, including the implications for dispatch, system balancing, and the impact of unit commitment constraints on capacity planning
  • To quantify the economic impact of renewable deployment on the profitability of different classes of dispatchable assets, regional variation in decreasing returns to renewable deployment, and the value of complementary investments (e.g., storage and transmission)

Approach

This work uses a novel platform to link long-term electric sector capacity planning with detailed market operations in EPRI's U.S. Regional Economy, Greenhouse Gas, and Energy (US-REGEN) modeling framework. These tools can assess the technical and economic impacts of renewable resource integration simultaneously. The analysis focuses specifically on California and Texas, two states with extensive renewable deployment, but with different policy contexts and technological options.

Results

Model results for California and Texas suggest operational constraints can impact renewable integration costs, but the spatial and temporal variability of wind and solar resources are larger determinants of their value. As renewable resource deployment increases, dispatchable generation (especially natural gas combined-cycle units) falls faster than installed capacity. This reflects the low capacity value of wind and solar resources at higher deployment levels and the need to have access to considerable backup capacity. Although intermittent renewables contribute to wholesale energy markets, dispatchable generation is required to alleviate in-feed shortfalls, and to ensure reliable provision of energy, capacity, and flexibility needs. Model results show that restrictions on electricity transmission and regional coordination in capacity planning and power plant dispatch increase integration costs, highlighting the important roles of market design and trade. Grid-connected energy storage is shown to be a valuable balancing asset at high renewable penetration levels, but potential revenues diminish with increased deployment of storage resources.

Applications, Value, and Use

The analysis demonstrates a replicable approach to assess the technical and economic challenges of flexible operations, and to evaluate the robustness of investments under alternate assumptions about fleet flexibility, renewable deployment, trade opportunities, and storage availability. These scenario comparisons elucidate shared challenges and best practices while systematically quantifying the relative importance of factors influencing large-scale renewable integration.

Program
2016 Program 178   Technology Assessment, Market Analysis and Integrated Portfolio Planning
Keywords
  • Resource Planning
  • Intermittent generation
  • Renewable integration
  • Power system planning
  • Regional heterogeneity
  • Unit-commitment modeling
Report
000000003002008897
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