At the same time that electricity supply is becoming more variable due to generation sources like wind and solar, electricity demand is becoming more controllable due to information technology and advanced power electronics. All of this technological innovation calls for a fundamental shift in the way the grid is managed.
System optimization has now become a central principle of grid management. The electricity system must be optimized across a portfolio of technologies, across diverse geographies, between the distribution and transmission systems, and across various timescales. Smart regional planning and market designs can help.
The following list of resources provides policymakers with resources for assessing pathways and needs for system optimization. Power system modeling analyses are also a very useful tool to explore options for keeping costs low while building a reliable, resilient, and clean power system.
Learn More About:
Building in Flexibility
The Economics of Demand Flexibility: How “flexiwatts” create quantifiable value for customers and the grid, by Mark Dyson, James Mandel, et al. – Rocky Mountain Institute, (Aug. 2015)
This report quantifies the benefits of emerging technologies that can make demand more flexible to compete with supply-side resources. RMI finds that by using communication and control technology to automatically shift electricity use across hours of the day, demand flexibility reduces customer bills and grid costs and protects the value proposition of rooftop solar while simplifying bill management. When implemented through more granular rates, RMI found that demand flexibility can create quantifiable value for both customers and the grid. In the residential sector alone, RMI found that widespread implementation of demand flexibility can save 10–15% of potential grid costs, and customers can cut their electric bills 10–40% with rates and technologies that exist today. Given these widely applicable benefits, the report recommends that policymakers prioritize the widespread adoption of demand flexibility technology and business models in the near-term.
Teaching the Duck to Fly – Second Edition, by Jim Lazar – Regulatory Assistance Project (Jan. 2016)
The Second Edition is an update to Lazar’s 2014 analysis that shows how grid managers can address the so-called “duck curve” caused by high penetrations of solar and wind power. Teaching the duck to fly refers to reducing the need for fast-ramping capacity to deal with the late-afternoon peak as the sun sets, increasing system efficiency and reducing build-out of expensive peaking resources. Metaphorically, Mr. Lazar “teaches the duck to fly” using existing technologies to flatten load shapes to minimize ramping requirements (resembling the image of a flying bird). The paper suggests ten low-carbon strategies that utilities can mix and match to create a load shape including peak-shaving EE and demand response, storage, time-variant rates, and retiring inflexible generators with high minimum run requirements.
Capacity and Energy in the Integrated Grid, Electric Power Research Institute (July 2015)
As a part of EPRI’s Integrated Grid project, this report comprehensively examines the evolving nature of system capacity in an era of abundant renewable energy. It addresses the role of capacity and energy the following areas: (1) How individual resources, including distributed energy resources (DERs), can contribute to system capacity; (2) How increasing variability and distributed energy resources disrupt traditional wholesale market and retail rate structures, and corresponding emerging trends; (3) The dynamic cost of capacity; and (4) Barriers to DERs providing both capacity and energy, including standardization. To assist regulators, the report also provides extensive examples of how to increase the flexibility of the electricity system by reforming wholesale markets and retail rates.
Variable Resources and Reliability
Renewable Electricity Futures Study, National Renewable Energy Laboratory (2012)
This study is an initial investigation of the extent to which renewable energy can meet the electricity demands of the continental United States over the next several decades. This study explores opportunities, challenges and implications of very high renewable electricity generation levels—from 30 percent up to 90 percent, focusing on 80 percent, of all U.S. electricity generation—in 2050. The study concludes that America could run on 80 percent renewables by 2050 with today’s commercially available technologies integrated into a more flexible electric system. The study was the first to match the location and timing of renewable energy resources to the time and place of electricity demand, balancing on an hourly basis in 134 balancing areas across the country, even with 50 percent of electricity coming from variable sources like wind and solar.
Integrating Renewable Energy into the Electricity Grid, Jurgen Weiss & Bruce Tsuchida – Brattle Group, prepared for Advanced Energy Economy Institute, (June 2015)
The report surveys what utilities and independent system operators (ISOs) with relatively high shares of variable renewable generation are doing to integrate those resources into their systems without compromising reliability. Brattle focuses on two case studies – the Electric Reliability Corporation of Texas (ERCOT) and Xcel Colorado. The in-depth case studies show ancillary service reform, improved forecasting, and other policy tweaks increased the flexibility of the system and enabled renewable integration beyond what is required by the Clean Power Plan. Importantly, it provides models for deregulated markets and vertically integrated utilities, which manage reliability differently.
Clean Energy Keeps the Lights on, Carl Lanville, Janine Migden-Ostrander, & Mike Hogan – Regulatory Assistance Project (June 2014)
This brief dispels the myth that electricity portfolios with high penetrations of variable renewable resources threaten reliability. The authors review eight recent studies commissioned by utilities, governments, and non-governmental organizations to address this issue, and find that none suggest unmanageable reliability problems.
“Flexibility in 21st Century Power Systems,” National Renewable Energy Laboratory, et al., (May 2014)
This paper provides a high-level framework for understanding the relationship between variable generation, the need for flexibility, and the options for increasing flexibility. It examines the flexibility added from system operation, markets, load management, flexible generation, increased transmission capacity, and storage, laying out the relative costs of each method. This is a great resource for understanding these fundamental relationships and their potential solutions today, but does not provide in-depth cost-benefit analyses.
Advanced Grid-Friendly Controls Demonstration Project for Utility-Scale PV Power Plants, by Vahan Gevorgian & Barbara O’Neill – National Renewable Energy Laboratory (Jan. 2016)
Utility-scale solar, which accounts for over half of solar capacity in the U.S., and creates a more variable supply, can also enhance reliability. NREL collaborated with AES, the Puerto Rico Electric Power Authority, First Solar, and the Electric Reliability Council of Texas to conduct demonstration projects that show how active power controls can leverage PV’s value to provide additional ancillary services that increase system reliability. The bottom line for utilities and regulators? If PV-generated power can offer a supportive product that benefits the power system and is economic for PV power plant owners and customers, this functionality should be recognized and encouraged during planning processes and designing wholesale markets.
Using Renewables to Operate a Low-Carbon Grid: Demonstration of Advanced Reliability Services from a Utility-Scale Solar PV Plant, by Clyde Loutan – CAISO & Vahan Gevorgian – NREL (Jan. 2017)
A new field study commissioned by the California Independent System Operator (CAISO) concludes that solar generation can provide essential reliability services like frequency regulation more reliably than conventional generation, using new inverter technology. This finding is a real-world validation of research finding that enabling renewables to provide grid reserves cost-effectively, reducing grid management issues and greenhouse gas emissions in California.
Western Wind and Solar Integration Studies (2010-2014)
The Western Wind and Solar Integration Study, one of the largest regional solar and wind integration studies to date, explores the question: Can we integrate large amounts of wind and solar energy into the electric power system of the West?
Phase 1 (2010) investigated the benefits and challenges of integrating up to 35% wind and solar energy in the WestConnect sub-region and, more broadly, the Western Interconnection, by 2017.
Phase 2 (2013) was initiated to determine the wear-and-tear costs and emissions impacts of cycling and to simulate grid operations and investigate the detailed impacts of wind and solar power on the fossil-fueled fleet in the West.
Phase 3 (Dec. 2014) assessed the adequacy of frequency response and transient stability (i.e. voltage support) on the Western grid under high shares of wind (16.5%) and solar (16.5%) penetration. The study found that the Western Interconnection could meet transient stability and frequency response objectives with high levels of wind and solar, but it emphasized the importance of good system planning and increased regional coordination in facilitating system stability.
Regional Integration Studies
This was the first study assessing the future energy system needs for the Eastern Interconnection (75 percent of US power demand) under different policy scenarios. The report includes detailed transmission studies and production cost analyses of future scenarios chosen by stakeholders: 1) a national carbon constraint with increased energy efficiency/demand response, 2) a regionally implemented national Renewable Portfolio Standard, and 3) business as usual.
Exploring Natural Gas and Renewables in ERCOT, Part III: The Role of Demand Response, Energy Efficiency, and Combined Heat & Power, by Ira Shavel, et al. – Brattle Group, prepared for Texas Clean Energy Coalition (May 2014)
This study explores how natural gas and renewable energy can work together to meet demand growth in the Texas electric grid over the next 20 years, while expanded energy efficiency and demand response programs could cut projected peak demand growth in half.
PJM Renewable Integration Study, by Gene Hinkle – GE Energy Consulting (March 2014)
This study was designed to act as a comprehensive impact assessment of increased penetrations of wind and solar generation in the PJM grid region. The analysis concludes that PJM will not have any significant issues operating with up to 30% wind and solar (the highest penetration modeled in the study), assuming adequate transmission expansion and regulating reserves.
The Net Benefits of Increased Wind Power in PJM, by Bob Fagan, et al. – Synapse Energy Economics (May 2013)
This report found that adding the transmission capacity needed to support more wind power in the PJM region can lower gas and coal consumption and reduce regional wholesale energy market prices, saving nearly $7 billion per year in the mid-2020s. By doubling the wind generation already planned in the region, it would lower fuel costs and drive down prices by $1.74 per megawatt hour (MWh) in PJM, the largest wholesale competitive energy market in the world. The report also found that these savings extend into the regions outside but interconnected with PJM. Thus, by adding more wind, PJM can displace dirty generation with cleaner wind power while driving down the cost of energy under its footprint.
These five webinars are useful educational tools for regulators and stakeholders. They examine technical engineering problems surrounding renewables integration, breaking them down into terms non-experts can understand and providing real-world solutions. Topics include:
Technology-Specific Integration Studies
The Integrated Grid: A Benefit-Cost Framework, by Electric Power Research Institute (Feb. 2015)
The report, released at the General Meeting of the National Association of Regulatory Utility Commissioners, provides a framework for assessing the benefits and costs of accommodating more distributed energy resources, and effects on grid reliability and resilience. An extremely comprehensive assessment, the report will help regulators and utilities integrate distributed energy resources while optimizing cost, reliability, and environmental performance. The framework supports a transition to a new electric industry paradigm in which centralized and distributed energy resources are fully interconnected to, and jointly coordinated with, the electric grid.
More than Smart: A Framework to make the Distribution Grid More Open, Efficient and Resilient, by Greentech Leadership Group & The Resnick Institute (Aug. 2014)
Developed through a series of workshops with energy experts to assist California utilities in developing integrated distribution plans (IDPs), More than Smart outlines a clear path and framework to move from today’s centralized transmission planning infrastructure to a “network” system that allows more entities to help expedite California’s grid to become cleaner, cheaper and more reliable. The report suggests four steps related to integrating DER into distribution planning, design and operations: start with a comprehensive integrated distribution plan, move toward a node-friendly planning model, expand the role of the distributed system operator in distribution system planning, and expedite DER participation in wholesale markets and resource adequacy.
Challenges and Opportunities Associated with Energy Storage: Assessing Financial and Technical Performance, by Patrick J. Balducci & Vince L. Sprenkle – Pacific Northwest National Laboratory (Aug. 2015)
Modeling results presented to the Washington Utilities and Transportation Commission helps answer the question, “How do we maximize the value of battery storage?” PNNL modeled batteries to provide five services in the Puget Sound Region: peak shaving, energy arbitrage, frequency response, voltage stability, and outage mitigation. The model then optimizes the deployment against real-time energy and ancillary service prices constrained by the battery’s physical limits. The study found that while no single service generated enough value to yield a positive return on investment for storage, service bundling pushed storage into the black at current costs. Outage mitigation and locational capacity relief comprised the majority of the value.
The Economics of Battery Storage: How multi-use, customer-sited batteries deliver the most services and value to customers and the grid, by James Mandel et al. – Rocky Mountain Institute (Oct. 2015)
RMI’s eLab identifies 13 services that batteries can provide, dividing each by the beneficiary: customers, distribution utilities, and bulk-system operators. RMI also finds that battery economics greatly improve when services can be stacked, and finds places where battery storage is cost-effective today. In line with Distributed Energy Resources: Policy Implications of Decentralization, the report recommends that regulators require distribution utilities to examine DERs including storage as alternatives to traditional infrastructure investments. They also recommend that battery and DER developers collaborate with utilities and regulators to help them understand what values distributed energy storage can provide.
Planning the Distributed Energy Future: Emerging Electric Utility Distribution Planning Practices for Distributed Energy Resources, by Amy Colman, Dan Wilson, and Daisy Chung (Feb. 2016)
The Smart Electric Power Alliance and independent consultants Black and Veatch offer perspectives from five leading utilities on the challenges and opportunities for planning around DERs. The report starts by pointing out how existing distribution planning is insufficient to take advantage of the value of DERs, and suggests an iterative approach to improve planning. One major change will be incorporating incentive-based DER deployment (outside of utility control) into planning. The report gives best practices and outlines iterative steps to adopt new modeling approaches that can capture the complexity of a two-way distribution system, map the locational value of DERs, and incorporate bulk-system forecasts simultaneously.
A Pathway to the Distributed Grid, by SolarCity, (Feb. 2016).
Using California utilities’ Distributed Resource Plans as case studies, the report asserts that current utility planning processes are leaving billions in potential benefits from distributed energy resources (DERs) on the table, and advocates for updated planning practices. Meanwhile, much of the new grid modernization investment may not be necessary solely to integrate distributed generation, though it may be beneficial for other reasons. The report highlights regulatory models, utility incentives, and inadequate modeling of benefits as culprits for inefficient DER integration.
Future Opportunities and Challenges with Using Demand Response as a Resource in Distribution System Operation and Planning Activities, by Peter Cappers et al., Lawrence Berkeley National Laboratory (Jan. 2016)
LBNL surveys the technical opportunities and barriers to greater use of demand response to manage the distribution system. The study finds that a small subset of DR opportunities can be effective at helping distribution system operators manage a number of grid needs (e.g., maximum capacity relief, emergency load transfer, voltage management and outage recovery) but not all of them. To fully take advantage of these new applications of demand response, the report recommends that regulators and policymakers consider directing utilities to take a more integrated approach to distribution system planning in order to assess the least cost solutions to reliably and safely operate the grid of the future. Ultimately each state will determine what the most appropriate path forward looks like, but this scoping study can help each understand opportunities for demand response to support distribution system operations and planning activities.
Role of Wind Power in Primary Frequency Response of an Interconnection, by Zhang et al. (Oct. 2013)
The focus of the simulation work presented in this paper is to evaluate the impact of wind generation providing Primary Frequency Response and synthetic inertial response on a large interconnection. All simulations were conducted on the Western Interconnection system with different assumptions of wind power penetration levels.
High Penetration PV Integration Handbook for Distribution Engineers, by Rich Seguin, et al. -National Renewable Energy Lab (Jan. 2016)
This handbook helps distribution engineers understand and navigate the challenges of integrating high penetrations of PV generation into their service territories. The handbook presents the potential impacts, provides model-based analysis approaches for determining impacts, and suggests potential mitigation measures that could be taken to reduce impacts. While utility engineers who speak this technical language are the primary audience for this resource, it can also help policymakers understand the real constraints and opportunities for distributed system optimization and integrated distribution planning as they consider new roles for utilities in the future.
FERC prepares annual reports on demand response and advanced metering pursuant to a requirement of the Energy Policy Act of 2005, Section 1252(e)(3). The Act requires that FERC prepare and publish an annual report, by appropriate region, that assesses electricity demand response sources, including those available from all consumer classes. The latest report was published in December 2016.
Clean Power Surveys and Studies
A Prospective Analysis of the Costs, Benefits, and Impacts of U.S. Renewable Portfolio Standards by Trieu Mai et al. – Lawrence Berkeley National Laboratory (Dec. 2016)
This report evaluates the costs and benefits of renewable electricity built under Renewable Portfolio Standards (RPS) in the future, over the period 2015-2050. Examining multiple scenarios of RPS expansion, the report quantifies system costs, retail price impacts, environmental benefits, economic development impacts, and consumer savings on natural gas. LBNL finds rates will remain flat under existing RPS policies (due to drops in prices), and may increase 0.6-4.5% under a “high RE” scenario in which expanded RPS policies drive renewables over 40 percent of total generation.
The Future of the Electric Grid, an interdisciplinary MIT study (Dec. 2011)
One of the most important emerging challenges facing the grid is the need to incorporate more renewable generation in response to state and federal policies, without sacrificing reliability and affordability. This report provides a detailed, comprehensive, objective portrait of the U.S. electric grid and the challenges and opportunities it is likely to face over the next two decades, given increasing shares of renewables and changing patterns of demand. The first half focuses on needed improvements in and expansion of the transmission and distribution system to accommodate more renewable generation. The second half focuses on changes in consumer behavior that necessitate integrated solutions that include demand management and distributed energy resources.
In 2015 MIT released The Future of Solar Energy analyzing the potential for solar to compete against other resources to provide electricity. On the bulk system, the report paints a rosy picture for utility-scale solar, suggesting it will soon be competitive with natural gas combined cycle plants, and advocates for a carbon price to account for externalities. On the residential side, the report advocates for new rate structures that more accurately account for the distribution costs incurred by solar and non-solar users. The report concludes that residential distributed solar adds between $5-19/kilowatt/year of distribution costs to the system, depending on the level of penetration.
REN21 Renewables Global Futures Report (Jan. 2013)
This report presents a range of credible possibilities for the future of renewable energy. The report is based on interviews with more than 170 leading experts around the world and draws on 50 recently published scenarios.
Real-world Examples of Variable Resource Integration
Transforming the Electricity Portfolio: Lessons from Germany and Japan in Deploying Renewable Energy, by Charles Ebinger, John Banks, and Alisa Schackmann – Brookings Energy Security Initiative (Sept. 2014)
This policy brief examines how Germany and Japan are addressing questions of how to move away from both fossil and nuclear energy at the same time. The report identifies lessons relevant for the large-scale deployment of renewable power in the United States, even given that a move away from nuclear is not part of U.S. policy.
The Midwest: A Leader in Clean Energy (May 2014)