There is no shortage of bold energy transition plans, as numerous governmental leaders and think tanks have proposed aggressive actions to fully decarbonize electricity generation over the next few decades. Importantly, although the goal may be the same, the many transition plans employ different assumptions and means to achieve the goal. That there are important differences warrants debate.
We have also observed that these sweeping plans are often more ambitious than they are frank, seemingly unreflective about the challenges of the scale and speed of action needed to achieve their goals. The result is that rather than experiencing a ground-level tour of the energy transition landscape, a curious public must instead settle for a 30,000 foot view.
However, details matter. In evaluating transition plans, it is particularly important to have a sober and honest assessment of the goals, the costs to achieve them, and possible outcomes. For example, a recent NERC report highlighted the challenges of a too rapid energy transition to maintaining a reliable electric grid (see article 1 below). If the transition proceeds too rapidly, it could reduce reliability while increasing the costs of decarbonization, for example, by “stranding” significant amounts of renewable energy behind transmission constraints (see article 2 below).
What these articles also demonstrate is that what’s missing from the debates is candor. A recent article from the Journal of Law entitled “Decarbonization and Candor” reviewed each of the competing decarbonization plans. The author (Robert A. James) concluded that without taking stock of all relevant considerations and tallying all of the benefits and the costs, decarbonization plans are incomplete.
Reducing the environmental impact of energy production is a noble goal, but it is important to remember that there is more to energy production than environmental impact alone. Keeping energy accessible and affordable – or in the case of many in the developing world, making energy accessible and affordable – are equally important considerations in any proposed energy transition. The list goes on, as enhancing energy security, promoting economic development, and sustainability measures such as the life-cycle impact of materials and overall environmental health are integral to managing current and future energy system changes.
When making decisions on something as pervasive and crucial to modern life as the electric system, it’s important to avoid tunnel vision. Hopefully restoring some candor can strengthen these debates.
NERC reliability report highlights grid challenges tied to US energy transition EXTRA
Wednesday, July 20, 2022 2:22 PM CT
By Zack Hale
Market Intelligence
A report released July 20 by the North American Electric Reliability Corp. underscored major challenges facing the U.S. bulk power system as the nation transitions away from fossil fuel-fired generation and faces increasingly severe extreme weather events.
NERC’s “2022 State of Reliability” report serves as an annual check-up for the U.S. power system, in which the organization’s analysts offer insights into past grid disturbances such as the mid-February 2021 Texas blackouts.
That event, triggered by a blast of Arctic weather, caused millions of consumers to lose power and resulted in more than 200 individual lives lost. With more than 23 GW proactively shut down by three regional grid operators, it was the largest controlled load shed in U.S. history.
The near-collapse of the Texas grid illustrated how natural gas-fired generators depend on functioning gas transportation infrastructure, NERC officials said July 20.
“Gas is a bridge fuel to where I think policies ultimately want to take us,” John Moura, NERC’s director of reliability assessment, said during a media briefing tied to the report’s release. “It’s important to consider [gas facilities’] reliability, as we’ll have them for quite some time.”
Renewable energy challenges
An investigation by NERC and Federal Energy Regulatory Commission staff released in November 2021 identified 28 separate actions that power plant owners should take to avoid a disaster like the Texas blackouts, including a variety of freeze-protection measures.
Moura also singled out grid emergencies in Texas and California, where in both cases large amounts of solar generation tripped offline.
“What happens when we connect inverter-based resources is we’re having challenges at the interconnection level,” Moura explained. “So, when there are certain disturbances on the larger system, some of these inverters instantaneously trip off or momentarily cease operation.”
Two such events occurred in Texas and another four happened in California in 2021, the NERC report found. Inverters are one of the most critical components in a solar generation system, enabling the conversion of direct-current electricity to alternating current.
These types of grid disturbances are “leading indicators for the need to really focus on reliably integrating that growing fleet of inverter-based resources,” Moura said.
Over the next 10 years, NERC is forecasting an additional 500 GW of solar and 400 GW of wind generation on the U.S. power system.
Moura added that NERC’s longer-term reliability assessments highlight the need for more interregional electric transmission to enable different regions of the country to share power when grid conditions become tight.
“Transmission is absolutely needed when we see the 500 GW of solar and 400 GW of wind that we expect to come in over the next 10 years,” Moura said. “There’s simply no way to interconnect that much generation without building transmission for it.”
Building out more transmission at the pace and scale needed to meet aggressive climate goals represents a major permitting challenge, Moura stressed.
Academic studies estimate the U.S. will need to double or even triple its electric transmission capacity by midcentury to meet U.S. President Joe Biden’s goal of achieving a net-zero economy by 2050.
FERC has launched multiple rulemaking proceedings aimed at speeding U.S. grid build-out, including two rules focused on long-range transmission planning and generator interconnection reforms.
Cybersecurity
Moura also noted the cybersecurity landscape is “relentlessly” evolving, presenting fresh challenges to the utility industry.
The NERC report did not provide an in-depth look at cybersecurity issues, but it did give a high-level overview of challenges threatening the North American grid.
The report cited a 100-day action plan launched by the Biden administration following the SolarWinds Corp. supply chain hack that breached multiple federal agencies, including the U.S. Department of Energy and FERC.
The hack, reportedly orchestrated by a Russian intelligence unit, affected approximately 18,000 private and government entities using a tainted version of Orion software produced by the Austin, Texas-based technology company.
In terms of positive trends, the NERC report identified a “statistically significant” decreasing trend for grid “misoperation” rates across a five-year lookback period.
All of the top 10 most severe misoperation events in 2021 were primarily caused by some type of extreme weather event, which included the Texas freeze as well as thunderstorms, high winds and tornadoes.
S&P Global Commodity Insights produces content for distribution on S&P Capital IQ Pro.
This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.
Calif. solar, wind oversupplies top record 2 TWh in H1’22 EXCLUSIVE
Thursday, July 14, 2022 10:23 AM CT
By Garrett Hering
Market Intelligence
| Renewable energy generation in California is hitting new heights, but the state sometimes has much more available than it needs in the middle of the day. Source: open nema/ iStock/Getty Images Plus |
California’s solar and wind farms generated record volumes of renewable energy in the first half of 2022, producing at times more carbon-free electricity than the world’s fifth-largest economy could consume.
Cutbacks of available wind and solar output on the California ISO transmission network, covering most of the Golden State and a sliver of Nevada, surged 79% in the first six months of the year to a record 2,063 GWh, according to an S&P Global Commodity Insights analysis of grid operator data.
The nearly 2.1 TWh of wind and solar curtailments in this year’s first half, compared with roughly 1.2 TWh in the first half of 2021, mark a return to fast-expanding periodic excesses of CAISO-connected renewable energy after tighter market conditions in 2021 interrupted their rapid growth in 2020 and 2019.
The six-month total was 30% more than the prior annual high of 1,587 GWh curtailed in 2020. The first-half volume of idled renewable energy was also more than the combined net output of California’s single largest solar and wind farms in 2021, according to S&P Market Intelligence data. Berkshire Hathaway Energy‘s 586-MW Topaz Solar Farm in San Luis Obispo County, Calif., and Pattern Energy Group Inc.‘s 265-MW Ocotillo Wind Energy Facility in Imperial County, Calif., together generated about 1,740 GWh last year.
Challenges, opportunities
Curtailments hit their highest levels in the spring, when asset operators frequently bid to ramp down production in the middle of the day as supplies exceed demand for electricity and prices plummet, sometimes dipping into negative territory in the real-time market. Such cuts help to prevent the grid from becoming overloaded.
In April, solar and wind farm operators in California dialed back 596 GWh, the most ever in one month and equal to roughly 9% of available solar and wind generation, grid operator data shows.
To make use of as much available renewable energy as possible, the grid operator promotes solutions such as energy storage and electric vehicle charging to soak up midday oversupplies and regional collaboration among grid operators in the West. The Western Energy Imbalance Market, operated by CAISO, helped to reduce curtailments by an estimated 1,664 GWh between 2015 and the first quarter of 2022, according to a report released in April.
But the oversupply challenge is outpacing solutions as wind and solar plants proliferate.
“The curtailments are driven largely by congestion, and batteries or other measures used to mitigate oversupply will not be very useful,” CAISO spokesperson Anne Gonzales said in an email.
Developers of large-scale wind and solar projects are calling for a rethinking of the possible value of excess renewables, including through new offtake contracts that compensate generators for providing essential grid services like frequency response.
“To encourage wind and solar to provide flexible services and not always seek to maximize their output, typical contracting provisions must change,” the California division of trade group American Clean Power said in a March letter to CAISO.
Smart thermostats could complicate transition from fossil fuels, study finds EXTRA
Thursday, July 14, 2022 8:41 AM CT
By Karin Rives
Market Intelligence
| A Nest smart thermostat shows how long it will take to heat up a home. Source: George Frey/Getty Images News via Getty Images |
As states and local communities push to electrify heating systems in buildings, the use of smart thermostats could inadvertently strain power grids in the morning before solar energy is available, researchers at Cornell University found in a newly published study.
About 40% of U.S. households now have smart thermostats, after utilities began deploying the technology more than a decade ago to better match energy consumption with supplies, according to the study published in the journal Applied Energy.
Consumers can use the technology to manage their power bills and consumption through the day and to take advantage of demand response opportunities and other energy savings incentives. Power companies monitor electricity use in real time and try to manage outages more effectively, keeping their grids more stable.
But as more people install electric heat pumps for home heating, thousands of smart thermostats in a single city can inadvertently work in tandem after being programmed by their algorithms to automatically turn up the heat before people wake up. That causes consumption of power to peak when renewable energy is scarce, requiring the dispatch of fossil fuel-powered generation.
This, in turn, can hinder integration of renewables into the grid and undermine greenhouse gas reduction efforts in states such as New York, which is looking to electrification to meet its ambitious clean energy goals, the study said.
Out of sync with solar
The Cornell researchers used data from 2,200 New York customers of ecobee Inc., a Canadian smart thermostat and home energy management company whose customers can opt to share their power use data.
The researchers learned that average energy use among those New York homes rose 40% around 6:05 am, an hour before daylight.
“All of a sudden, there’s a huge demand for electricity and that demand has to be managed by something,” said Zachary Lee, a recent Cornell Ph.D. graduate who co-authored the study with Max Zhang, a professor at the university’s Sibley School of Mechanical and Aerospace Engineering. “It means dispatching controllable generation, like natural gas or some more fossil fuel-based generation.”
Because such a large share of carbon emissions in cold-weather states such as New York come from heating, it is critical for policymakers to consider how electric appliances like heat pumps will affect the grid once they are ubiquitous, Lee said.
“We saw this new data set that [offered] a very granular look at how people actually use heating systems in homes,” Lee said. “We wanted to take a more detailed look so energy planning and policy can be better informed in the future.”
States with more air conditioning than heating needs also experience power demand peaks that can be difficult to manage. But from a climate perspective, it is critical to solve the relationship between smart thermostats and heating because those energy loads are higher at a time when solar energy is scarce, Lee said.
Wind energy could bridge the gap
Although the idea behind smart thermostats is to give homeowners more control over their energy consumption, one solution for utilities and regulators could be to use incentives that spread out energy use for heating over time, the researchers wrote. More consumer education and attractive financial rewards could encourage customers to relinquish some of their thermostat independence.
Another solution is to look more closely at heating electrification when planning renewable and energy storage resources.
“The highest heating demand periods also have the highest average 100-meter wind speed, suggesting that wind generation could be very effective at supplying renewable electricity during high heating demand times,” the study said.
S&P Global Commodity Insights produces content for distribution on S&P Capital IQ Pro.
This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.