Review of U.S. market reforms for renewable integration, flexibility, and storage

Transcription

1 Review of U.S. market reforms for renewable integration, flexibility, and storage Eric Hsieh Director Office of Energy Finance and Incentives Analysis U.S. Department of Energy 14 July 2017

2 Transformations to a More Flexible Grid Flexibility definitions Historic example Today s flexibility requirements U.S. Legal and Engineering Basis Blackout of 2003 Legal reliability standards Actions to address flexibility Operations Geography Markets [Case Study 1] Procurement [Case Study 2] Storage Deployment Results 2

3 Flexibility: Definitions Capability to maintain generation and load balance under uncertainty [1] Three dimensions (+ and -): Power range (MW) Ramp rate (MW/min) Duration (MWh) Power (MW) 0s Ramp Rate (MW/min) Range (MW) Duration (MWh) Flexibility Resource Response Flexibility Metric [1] Eric Hsieh, Rob Anderson, Grid Flexibility: the Quiet Revolution, The Electricity Journal Volume 30, Issue 2, March 2017, Pages 1 8 Time 3

4 Flexibility: History Nuclear Capacity (GW) U.S. Installed Nuclear and Pumped Hydro Capacity PHES Capacity (GW) Pumped storage plants often built in conjunction with nuclear Installed Nuclear Installed Pumped Hydro 4

5 The Need for Market-Driven Flexibility Markets for flexibility incentivize innovation in all technologies, including storage Electric Transport Wind Storage Changing Loads Demand Side Response New Resources Utility- Scale Solar New Solutions Microgrids Energy Efficiency Distributed Solar Enhanced Market Operations 5

6 Notable Renewable Generation Records CAISO 16 May % renewable over 24 hours - 72% renewable at 1400 MISO 11 Nov % wind SPP 12 May % wind at 0430 PJM 1 Nov % wind ERCOT 27 Nov % wind at 1230 Solar Generator Wind Generator Image by author based on data from PlattsGeospatial, Renewable production figures from

7 Existing US Legal Requirements States and Provinces Affected by the 2003 North American Blackout 2003 Blackout compels new law Energy Policy Act of 2005: NERC requirements are mandatory and enforceable Up to $1m per violation per day penalty Power balancing requirements apply to Balancing Authorities Image Sources: Wikimedia Commons, North America blackout.svg; 2003 New York City blackout.jpg 7

8 Existing US Technical Requirements NERC BAL-001: Real Power Balancing NERC BAL-002: Disturbance Control Source: Western Electricity Coordinating Council, "Standard BAL Real Power Source: North American Electric Reliability Corporation, "Standard BAL Balancing Control Performance," 23 March Disturbance Control Performance," 1 Apr

9 Existing US Technical Requirements NERC BAL-003-1: Frequency Response Proposed: FERC Frequency Response All new generators: 5% droop, linear,.036 Hz deadband Diagram: Burns McDonnel, Frequency Droop Considerations," 2015 Source: North American Electric Reliability Corporation, "Webinar BAL Frequency FERC Proposal: Essential Reliability Services and the Evolving Bulk-Power System Primary Response Implementation," 21 Oct 2015 Frequency Response, November 17, 2016, 157 FERC 61,122 9

10 Existing US Legal Requirements Balancing Authorities can comply with NERC requirements by Requiring generators to provide flexibility services Creating a market for flexibility services Procurement of flexibility services 10

11 Revised Operations Wind Output in BPA: Forecast versus Actual 3500 Forecasting 3000 Shorter Pricing Intervals /01/1700:00 07/01/1700:40 07/01/1701:20 07/01/1702:00 07/01/1702:40 07/01/1703:20 07/01/1704:00 07/01/1704:40 07/01/1705:20 07/01/1706:00 07/01/1706:40 07/01/1707:20 07/01/1708:00 07/01/1708:40 07/01/1709:20 07/01/1710:00 07/01/1710:40 07/01/1711:20 07/01/1712:00 07/01/1712:40 07/01/1713:20 07/01/1714:00 07/01/1714:40 07/01/1715:20 07/01/1716:00 07/01/1716:40 07/01/1717:20 07/01/1718:00 07/01/1718:40 07/01/1719:20 07/01/1720:00 07/01/1720:40 07/01/1721:20 07/01/1722:00 07/01/1722:40 07/01/1723:20 07/02/1700:00 07/02/1700:40 07/02/1701:20 07/02/1702:00 07/02/1702:40 07/02/1703:20 07/02/1704:00 07/02/1704:40 07/02/1705:20 07/02/1706:00 07/02/1706:40 07/02/1707:20 07/02/1708:00 07/02/1708:40 07/02/1709:20 07/02/1710:00 07/02/1710:40 07/02/1711:20 07/02/1712:00 07/02/1712:40 07/02/1713:20 07/02/1714:00 07/02/1714:40 07/02/1715:20 MW Output Wind Forecast Accuracy, [2] 100% 90% 80% TOTAL WIND GENERATION BASEPOINT (FORECAST) IN BPA CONTROL AREA (MW; SCADA ) 11 TOTAL WIND GENERATION IN BPA CONTROL AREA (MW; SCADA 79687) [1] Bonneville Power Authority, Data for BPA Balancing Authority Total Load, Wind Gen, Wind Forecast, Hydro, Thermal, and Net Interchange, July 2017 [2] Federal Energy Regulatory Commission, Common Metrics Report, AD , August 2016

12 Increased Geographic Diversity Growth of Western EIM Footprint, CAISO 2016 Western Energy Imbalance Market (EIM) Coordination between CAISO and other western balancing authorities Optimizes generation dispatch Utilizes spare transmission capacity Increases geographic diversity of load and resources Market results since 2014 $173m in gross benefits Avoided 52.7 GWh renewable curtailment 12 Source: CAISO, Western EIM Benefits Report, First Quarter 2017, May 1, 2017

13 Case Study 1 Incentivizing flexibility and storage through markets 13

14 Markets for Flexibility and Storage Operator Signal Resource Response Prior to 2011, both resources (providing frequency regulation) were paid the same FERC Order 755 required payments based on actual performance Figures from PJM, "RPSTF Performance Metrics: Formulas and Examples," 10 August Federal Energy Regulatory Commission Order FERC 61,064 14

15 Markets for Flexibility and Storage Batteries have replaced other resources for frequency regulation in PJM [1] PJM Frequency Regulation Resource Share 100% 90% 80% All Other 70% Demand Response 60% Natural Gas 50% Oil 40% Hydro 30% Battery 20% Coal 10% 0% MW of storage installed in PJM between 2013 and 2015 [2] PJM Energy Storage Capacity for Frequency Regulation [1] Data from Monitoring Analytics, PJM State of the Market, 2013, 2015, Image by author. [2] Daniel Finn-Foley, Energy Storage for Frequency Regulation, GTM Research, June

16 Case Study 2 Direct procurement of flexibility and storage 16

17 Competitive Procurement: Aliso Canyon October 2015: leak discovered in the Aliso Canyon natural gas facility Aliso Canyon Natural Gas Storage Los Angeles, California 17

18 Competitive Procurement: Aliso Canyon Aliso Canyon delivers natural gas to generators with 9.5 GW capacity [1] Expected NERC reliability violation because of generation shortage [1] Natural Gas Electric Generators Near Los Angeles [1] CPUC, CEC, CAISO, LADWP, SCG Staff, Aliso Canyon Risk Assessment Technical Report, 5 April

19 Competitive Procurement: Aliso Canyon New Energy Storage Installations May 2016 California Public Utilities Commission (CPUC) approves expedited procurement [1] July-Aug 2016 SCE, SDGE award contracts to storage vendors [2] February MW, 394 MWh of new energy storage installed [3][4] [1] CPUC Resolution E-4791, 26 May 2016 [2] [3] GTM Research, U.S. Energy Storage Monitor: 2016 Year in Review and Q Full Report, March 2017 [4] Logan Goldie-Scot, 2H 2017 Energy Storage Market Outlook, BNEF, 29 June

20 Regions with Significant Reforms and Storage Deployments U.S. Energy Storage Installations and Market, Q Legend Battery Storage Electromechanical Storage Thermal Storage Frequency Regulation Market Price $5/MWh $30/MWh Storage in Utility Planning States with Storage Targets or Incentives 20 Image by author. DOE Energy Storage Database, Daniel Finn-Foley, Energy Storage for Frequency Regulation, GTM Research, June 2017; GTM Research, U.S. Energy Storage Monitor: 2016 Year in Review, 2017; Logan Goldie-Scot, 2H 2017 Energy Storage Market Outlook, BNEF, 29 June 2017

21 Summary Reforms resulted in new energy storage deployment U.S. energy storage driven by Clear, enforceable electrical engineering requirements Diverse approaches, such as market-based and competitive procurement Innovation in storage technologies and flexibility needs 21

22 Flexibility: Engineering Terms Power (MW) Event Primary Reserves Secondary Reserves Tertiary Reserves 0s 5s 30s 10m 1hr Time 22