The Old Gray Grid She Ain t What She Used to Be Electric Power Research Institute, Inc. All rights reserved.
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1 The Old Gray Grid She Ain t What She Used to Be
2 Ain t what she used to be? No Respect! 2
3 The Power System is Getting More Dynamic Generation Becomes More Flexible Consumers Become Energy Producers T & D Becomes More Controllable and Resilient Loads Become More Interactive and Dynamic 3
4 But customers are not the same either Distributed Generation Energy Storage Household Automation Behavioral Initiatives Demand Response Energy Efficiency Graphics Courtesy SCE 4
5 Realizing Value from All Resources From The Grid From Distributed Resources Reliability Startup Power Resiliency Voltage Support Energy Transaction Voltage Quality Emissions Reduction Distribution Optimization Efficiency Loss Reduction Demand Response 5
6 Today s Market, Adolescence? Customers as Teenagers? The grid is like Mom n Dad Always there The ways and means to support you Basic questions about how you ll pay your way 6
7 The Challenge A Few Examples 24 by 7 Electricity Startup Power Grid Supplied Power Voltage Quality 7
8 Key Points on Capacity and Energy Both capacity and energy are critical to a reliable power system Renewable generation and more efficient loads are significantly affecting how the power system operates Wholesale markets and retail rate structures are changing to address this new reality R&D is crucial to enhance the reliability of capacity from emerging resources, especially DER 8
9 Focusing Customers and the Public on All Three Energy, measured in kilowatt-hours (kwh), is required to operate consumers lighting, equipment, appliances and other devices. Demand is a measure of power, of how much energy a consumer (or group of consumers) requires at a specific point in time. Capacity is the maximum capability to supply and deliver a given level of energy demand at any point in time. 9
10 U.S. Peak Demand and Energy Consumption Since 1992 Data Source: EIA Form-411 In some regions of the U.S. and other countries, peak system load is increasing at a faster rate than overall energy consumption. 10
11 Traditional Heat Pump on a Cold Winter Day New trends in interior climate control are often more energy efficient devices but do not necessarily reduce peak demand. 11
12 Zero-Net-Energy is Not Zero Capacity Completely displacing a consumer s energy requirements with selfgeneration often does not alleviate the need for capacity from the utility. 12
13 Capacity Contributions of Generation Types Unforced capacity values for PJM in 2013 [* indicates default value for PJM RPM auction] (Data Source: PJM) Variable renewable resources can supply energy at low, or zero variable cost, but alone are generally not sources of firmly available capacity. 13
14 Capacity: How Much, What Kind The combined impact of adding capacity with less availability results in systems with a total capacity increasing faster than peak demand. 14
15 Understanding the Cost of Capacity Fixed capacity costs for supply and delivery could represent for individual utilities between 35% and 75% of their average residential electricity bill 15
16 Recovering Capacity Costs in Wholesale Markets Generating units designed to be quickly and sparingly dispatched often receive much of their income from outside of the energy market. Capacity markets are one way to encourage capacity additions, but they have exhibited volatility as market rules have evolved 16
17 Reflecting Capacity Requirements in Retail Rates Contribution to Peak Demand Incents peak reduction Balanced Approach Incents marginal cost reduction Total Energy Consumption Incents energy efficiency Majority of Residential Rates Some emerging residential electricity rates are attempting to address capacity costs through modifications to traditional rate elements. Time-of-Use Pricing Residential Demand Charges Demand Subscription Fixed Charge Increases 17
18 Key Points on Capacity and Energy Both capacity and energy are critical to a reliable power system Renewable generation and more efficient loads are significantly affecting how the power system operates Wholesale markets and retail rate structures are changing to address this new reality R&D is crucial to enhance the reliability of capacity from emerging resources, especially DER 18
19 Research to Enable Reliable Capacity from DER R&D progress includes open standards, protocols, and tools for integrating distributed energy resources. Additional work is required for DER to be considered reliable, long-term capacity 19
20 Insights From a Real Power System When the T&D System Becomes Increasingly Dynamic Power Flowing from Transmission to Distribution MW PV Generation Germany [MW] ,000 10,000 15,000 20,000 Trend 25, Reverse Power Flowing from Distribution to Transmission 20
21 Key Takeaways Capacity and energy requirements are changing Variable renewable generation can provide energy with very low variable costs, however it s not always available when needed Providing flexible and available capacity comes at a cost, which must be recovered if generators and delivery companies are to remain in business Distributed resources may be sources of capacity in the future, but it s going to take significant R&D to get us there 21
22 Increasing Penetration Level Increasing Penetration Level Understanding System Impact Energy, Capacity & Ancillary Support Central Generation Additional Capacity & Ancillary Service Need Voltage & Frequency Support Transmission Voltage & Frequency Instability T&D Avoided Capacity Substation Reverse Power Flow Transmission Congestion Loss Reduction Distribution Increased Losses Equipment Wear Voltage Support Customer Voltage Variation Which of these are in traditional communication? 22
23 EPRI s Action Plan 3 Key Areas & Research Challenges Benefit - Cost Framework Interconnection Technical Guidelines Grid Planning & Operations Requires Collaboration with All Stakeholders 23
24 Things in Flux... Things in Play King Kong Carbon vs Godzilla Grid? 24
25 Together Shaping the Future of Electricity 25
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