Grid integration of Variable Renewables:

Flexible options for the power system

Dr. Peerapat Vithayasrichareon, Lead Analyst – System Integration of Renewables

Technical Workshop on Power System Flexibility, Jakarta, 14 November 2018

IEA 1 © OECD/IEA 2018

Outline

• Global overview of RE trends and IEA work on Grid Integration of Variable

Renewable Energy (VRE)

• Handling challenges during different phases of VRE integration

• Power system transformation and Flexibility Options

• International Experiences

• Summary

2 © OECD/IEA 2018
Outline

• Global overview of RE trends and IEA work on Grid Integration of

Variable Renewable Energy (VRE)

• Handling challenges during different phases of VRE integration

• Power system transformation and Flexibility Options

• International Experiences

• Summary

3 © OECD/IEA 2018
The IEA “family"

30 member countries (from the OECD), as well as seven association countries, including
India, China and Indonesia, and partners around the world
4 © OECD/IEA 2018
 Electricity generation growth by fuel

Coal and gas

2006-11
Wind

Solar PV
Year

2012-17 Hydropower

Bioenergy

2018-23 Nuclear

Others
- 500 0 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500
Generation growth (TWh)

Renewable generation leads the growth of electricity among different technologies. Expansion of fossil
fuel is expected to decline considerably.
Source: Renewable 2018: Analysis and Forecasts to 2023 5 © OECD/IEA 2018
 Solar PV expansion in electricity larger than all renewables combined

Renewable electricity capacity growth by technology

GW
700

600

500

400

300

200

100

0
2006-11 2012-17 2018-23
Wind PV-utility PV-distributed Hydropower Other renewables

China remains the absolute solar PV leader by far, holding almost 40% of global installed PV capacity in 2023
The US remains the second-largest growth market for solar PV, followed by India, whose capacity quadruples
Source: Renewable 2018: Analysis and Forecasts to 2023 6 © OECD/IEA 2018
 Wind and solar is leading power system transformation

>50%
% VRE in electricity generation

40-50%

20-40%

10-20%

5-10%

0-5%
0 500 1 000 1 500 2 000 2 500
TWh
PV generation in 2017 Wind generation in 2017 PV generation in 2023 Wind generation in 2023

In most power systems the share of VRE is expected to double to over 10% in five years. The shift from wind to
solar capacity addition raises the system integration issues. Power system flexibility is a key factor.
Source: Renewable 2018: Analysis and Forecasts to 2023 7 © OECD/IEA 2018
IEA System Integration of Renewables analysis at a glance

• Over 10 years of grid integration work at the IEA

- Grid Integration of Variable Renewables (GIVAR) Programme
- Use of proprietary and external modelling tools for techno-economic grid integration assessment
- Global expert network via IEA Technology Collaboration Programmes and GIVAR Advisory Group
- Part of delivering the IEA modernisation strategy

2014 2016 2017 2017 2018 2018

Framework, Policy Progress & Tracking Grid integration study

Implementation
Technology, Economics
8 © OECD/IEA 2018
IEA System Integration of RE analysis and engagement since 2014

Workshops and dissemination

events
Regional Latin America training
(2014/15/16);
New Delhi/Bangalore (2015);
Bali Clean energy Forum (2015/17);
Beijing (2016/17); Astana (2016);
Johannesburg (2016);
New Delhi (2017);
Mexico City (2017).

Since 2014, IEA System Integration analysis covered over 20 countries in the five continents.
Association and partner countries have been systematically prioritized.
9 © OECD/IEA 2018
Outline

• Global overview of RE trends and IEA work on Grid Integration of Variable

Renewable Energy (VRE)

• Handling challenges during different phases of VRE integration

• Power system transformation and Flexibility Options

• International Experiences

• Summary

10 © OECD/IEA 2018
Six important properties of wind and solar power

Uncertainty Variability Non-synchronous technologies

Location constraints Low short-run cost

Modularity

11 © OECD/IEA 2018
… leading to new challenges for energy security
New operational requirements
3 500

3 Limited
000
contribution to
peak demand
2 500

Power (MW)
Net load = 2 000
Larger
power demand 1 500
ramps

minus
1 000
wind and solar output
Forecast
500 errors
Potential
over-
0 generation
00:00 12:00 00:00 12:00 00:00 12:00 00:00 12:00 00:00 12:00
Demand Net load

Higher shares of variable renewables pose new challenges for power systems

12 © OECD/IEA 2018
Three main messages on system integration

1. Very high shares of variable renewables are technically possible

2. No problems at low shares, if basic rules are followed

3. Reaching high shares cost-effectively calls for a system-wide transformation

FLEXIBLE
Power system
Main Wind and • Generation
system solar • Grids
• Storage
• Demand Side Integration

13 © OECD/IEA 2018
 Variability – a familiar challenge
Exceptionally high variability in Brazil, 28 June 2010

Power systems already deal with demand variability; they have flexibility available from the start.
Source: ONS, Brazil 14 © OECD/IEA 2018
Different Phases of VRE Integration
Phase Description Country Examples

1 VRE capacity is not relevant at the all-system level. No Most countries, e.g.
noticeable impact on the system Mexico, Indonesia, Thailand
2 VRE generation becomes noticeable to the system operator but Brazil, China, India, Sweden,
has a moderate impact Texas

3 Flexibility becomes relevant with greater swings in the Italy, Germany, Portugal,
supply/demand balance Spain, UK

4 Stability becomes relevant. VRE capacity covers nearly 100% of Ireland, South Australia,
demand at certain times Denmark,
5 Growing amounts of VRE surplus;
electrification of other sectors becomes relevant
6 Seasonal surplus or deficit of VRE supply; seasonal storage &
synthetic fuels

Electricity only accounts for around one fifth of total final energy demand today. The next rise in
renewables will require multiplying their uses in buildings, industry and transport
15 © OECD/IEA 2018
Wind & solar making strong inroads, but new challenges may emerge
Four phases of wind and solar integration

16 © OECD/IEA 2018
Net load comparison for different phases of VRE integration
Demand and VRE production in a typical week day, Italy, 2010
40 000
35 000
30 000
No difference in net load
25 000
(Phase 1 of VRE integration)
MW

20 000
15 000
10 000
5 000
0
01:00 03:00 05:00 07:00 09:00 11:00 13:00 15:00 17:00 19:00 21:00 23:00
Demand VRE production

Demand and VRE production in a typical week day, Italy, 2016

35 000
30 000
25 000 Flexibility is key to manage
20 000
variability in net load
MW

15 000
(Phase 3 of VRE integration)
10 000
5 000
0
01:00 03:00 05:00 07:00 09:00 11:00 13:00 15:00 17:00 19:00 21:00 23:00
Demand VRE production Net Demand 17 © OECD/IEA 2018
Phases 1 & 2: Getting Wind and Solar Onto the Grid

Myths related to wind and solar integration

A step by step guide for initial
phases of VRE deployment
1. Weather driven variability is unmanageable

2. VRE deployment imposes a high cost on conventional plants

3. VRE capacity requires dedicated “backup”

4. The associated grid cost is too high

5. Storage is a must-have

6. VRE capacity destabilizes the power system

18 © OECD/IEA 2018
 Focus on Phase 1 of VRE integration
Priorities for VRE Integration – Phase 1
• VRE output is not noticeable for
system operator Can the grid accommodate
Are there appropriate
technical grid connection
VRE at the identified sites?
rules?
• VRE variability tends to be negligible
compared to fluctuations in demand
Establish
Solve local
connection
• Priority areas are connection grid issues
rules
requirements and grid codes

• At initial deployment, integration of Successful integration of first wind and solar plants
VRE requires little additional effort
Issue Action Outcome
Yes No Action taken

Appropriate technical grid connection rules are critical to ensure that VRE plants do not have a negative
impact on the local quality and reliability of electricity supply.
Source: IEA 2017, Getting wind and sun onto the grid 19 © OECD/IEA 2018
 Focus on Phase 2 of VRE integration
Priorities for VRE Integration – Phase 2
• First instances of grid
Is the grid still
congestion Is grid connection
code
Is VRE reflected
in system
sufficient for
Is VRE deployed in a
system-friendly
continuing VRE
appropriate? operation? way?
deployment?
• Incorporate VRE
forecast in scheduling Ensure visibility and Improve Manage VRE
& dispatch of other Develop or
upgrade grid code
controllability of power
plants; Implement
operations;
Consider grid
deployment
location and
generators VRE forecast system expansion technology mix

• Focus also on system- Successful integration of increasing shares of wind and solar PV plants
friendly VRE
deployment
Issue Action Outcome

Yes No Action taken

Updated system operations, sufficient visibility & control of VRE output becomes critical in Phase II

Source: IEA 2017, Getting wind and sun onto the grid 20 © OECD/IEA 2018
Integration strategy depend on power system characteristics

Technical System
factors operation

Main
Market
structural of
design
the system

System Technical
Integration
demand standards
strategy
fundamentals (grid codes)

21 © OECD/IEA 2018
Outline

• Global overview of RE trends and IEA work on Grid Integration of Variable

Renewable Energy (VRE)

• Handling challenges during different phases of VRE integration

• Power system transformation and Flexibility Options

• International Experiences

• Summary

22 © OECD/IEA 2018
Increasing VRE is driving power system transformation

Policy and market framework

System-friendly VRE
Flexible resources
deployment
Level of VRE penetration

Distributed
resources integration
24/
7 System services

Generation time Demand

profile Grids Generation Storage
shaping
Technology mix

Location
System and market operation
Integrated planning

Actions targeting VRE Actions targeting overall system

23 © OECD/IEA 2018
 Growing need and range of flexibility options at all scales

Expansion of electrification, distributed generation and variable renewables will broaden the need and
range of flexibility options
Source: World Energy Outlook 2018 24 © OECD/IEA 2018
 Flexibility options in the global power system

Power plants dominate flexibility options today while pumped hydro, interconnections and demand
response account for 10% of total flexibility
Source: World Energy Outlook 2018 25 © OECD/IEA 2018
Key transition challenges and flexibility resources

Phase 6 Need for seasonal storage and

use of synthetic fuels or

Policy, regulatory and market frameworks

Improved power system operation e.g.
forecasting, real time monitoring and

Institutional roles and responsibilities;

hydrogen
Phase 5
Coping with longer periods of

control, faster dispatch

surplus or deficit of energy
Phase 4
Ensuring robust power supply
during periods of high VRE
generation
Phase 3
Greater variability of net load;
changes in power flow patterns
Phase 2 on grids

Minor changes to operating Phase 1-2 can usually be managed through

patterns of existing power plants existing resources and operational practices
Phase 1
Key transition challenges Power Grid
DSR Storage Operation
plant infrastructure
Key flexible resource examples to enable transition
26 © OECD/IEA 2018
Better system operation to accommodate VRE

Ensure visibility of power plants to system operators

• Real time data of power plant output, including VRE plants
• For assessing the current and future state of the system
Load and VRE Forecasting
• System-wide forecasting of VRE output in different timescale
(closer to real time, the more accurate)

Power plant schedule and operating reserves

• frequent schedule updates close to real-time.
• Sophisticated approaches in determining reserves

Real-time control of power plants

• Automatic generation control (AGC), particularly large plants
• Controlling VRE active power output

27 © OECD/IEA 2018
Make use of grid infrastructure

Utilising existing grid infrastructure

• Instead of grid reinforcement, consider utilising the existing grid first
• Options to enhance capacity of transmission line includes DLR, FACTS, special
protection scheme (SPS)
• Examples in Spain, Ireland, UK, ERCOT, Australia

Integrated planning
• Integrate generation and grid planning with VRE deployment
• To achieve technology and geographical spread of VRE plants
• Examples in Texas, South Africa, Germany, Australia

28 © OECD/IEA 2018
Differentiating flexibility requirements by time horizon

Medium term
Flexibility type Short-term (ST) flexibility Long-term (LT) flexibility
(MT) flexibility
Time-scale Sub-seconds to Seconds to Minutes to
Hours to days
Days to
Months to years
seconds minutes hours months
Issue Ensure system Short term Meeting more Determining Addressing Balancing
stability (voltage frequency frequent, operation schedule longer periods seasonal and
and frequency) control rapid and less in hour- and day- of VRE surplus inter-annual
predictable ahead. or deficit availability of
changes in the VRE generation
supply / with demand
demand
balance,
Has relevance Dynamic Primary and AGC, ED for hour- ahead, UC, Hydro-thermal
for following stability (inertia secondary economic unit commitment scheduling, coordination,
response, grid frequency dispatch (ED), (UC) for day- adequacy adequacy, power
areas of system
strength) response balancing real ahead, system planning
operation and (includes time market,
planning AGC) regulation

Flexibility is needed across different time scales from sub-seconds to years. There are implications for
power system studies which must be in accordance with the need for flexibility
29 © OECD/IEA 2018
Contributions of flexibility services in different timescales

Ultra Short-term Very Short-term Short-term

Contingency

Nominal Frequency
System frequency (Hz)

Settling Frequency

Frequency Nadir

0 - seconds Seconds - minutes Minutes - hours Days Time

Ultra-short-, very short- and short-term flexibility services are important for maintaining system
frequency. Different flexibility requirements for different timescales.
30 © OECD/IEA 2018
Flexibility is key for integrating higher share of VRE

Power system flexibility resources

Grids Generation Storage Demand shaping

The role of different flexibility resources across different timescales (and VRE phases)
• Grid infrastructure – FACTS devices, SVCs, special protection (for ST); DLR and cross-border lines (for
MT).
• Generation – Inertia, droop, AGC (for ST); Cycling and quick start (for MT);
Grid
• Storage – Battery (ST); Pumped storage hydro (for MT and LT), Hydrogen production (for LT)
infrastructure
• Demand shaping – DSR, demand side options (e.g. water heaters, A/C with cold storage) (for ST);
smart meters (for MT); sector coupling, synthetic fuels (for LT)
31 © OECD/IEA 2018
Advanced Power Plant Flexibility Campaign

Campaign Co-leads Non-government partners

Participating CEM Members

14 partner countries and 14 industry and NGO partners – membership had increased throughout the
duration of the campaign
33 © OECD/IEA 2018
Outline

• Global overview of RE trends and IEA work on Grid Integration of Variable

Renewable Energy (VRE)

• Handling challenges during different phases of VRE integration

• Power system transformation and Flexibility Options

• International Experiences

• Summary

34 © OECD/IEA 2018
 Flexible thermal generation – business as usual already today

Conventional electricity generation in Germany in November 2017

80 Other
Main technical
70
parameters
Pumped storage hydro
60 • Minimum output –
50
less shut-downs
Natural Gas and costs
40
• Ramp rate and
GW

30 Hard coal start-up time –

faster response
20
Lignite • Minimum up and
10 down times –
0 Nuclear
Flexible scheduling
1 5 9 13 17 21 26 30
November 2017

Power plant flexibility is a priority for the operation of Germany’s power system. Coal and nuclear
plants can carry ramping duty.
Source: Agora (2018b), Die Energiewende im Stromsektor: Stand der Dinge 2017 35 © OECD/IEA 2018
Power Plants – Neurath, Germany
Load gradient / Minimum load
650

600

Before: 5 MW/min
550
5 MW/min Min 440MW

500
10 MW/min Before with HPB: 10 MW/min
Min 440MW
450

MW
12 MW/min
400 Contract: 12 MW/min
Min 290MW
350
15 MW/min Proven: 15 MW/min
• 630 MW lignite, built 1975 300 Min 270MW

• Boiler design for base load 250

20 MW/min
Potential: 20 MW/min
Min 250MW

• Siemens
200
00:00 00:05 00:10 00:15 00:20 00:25 00:30 00:35 00:40 00:45 00:50 00:55 01:00
time

• Ramp rate tripled (5 -> 15 MW/min),

• Minimum load reduced by 40% (440 -> 270 MW)

• Startup time reduced from 4 hr 15 min -> 3 hr 15 min

• Optimisation of all subordinated controllers, e.g. air, feedwater, fuel 36 © OECD/IEA 2018
 Flexibility requirements in India’s power system
Diesel Nuclear
0.2% 2.0%

Gas Hydro
7.4% 13.3%
Wind
10.1%
SHP
Renewable 1.3%
Energy
20.07% Biomass
Coal Waste 2.6%
57.3% 0.05% Solar
5.8%

Installed generation capacity by technologies as of March 2018

• Rapid growth of wind and solar with high targets in 2022

• The system is still dominated by coal-fired generation

Source: POSOCO, Central Electricity Authority (CEA) 37 © OECD/IEA 2018
 Flexibility requirements in India’s power system

Hourly variation in net demand

• Typical ramp rate: 250 MW/min; Peak requirement: 500 MW/min

• Increasing flexibility requirement – power plants, grid, storage, demand response
Source: POSOCO 38 © OECD/IEA 2018
 Increased variation in thermal generation in India
Hourly variation in thermal generation
Declining plant load factor of coal power plants

• Hourly variations in thermal generation has significantly increased due to increased net
demand: From 2-4 GW in 2008 to 6-8 GW in 2017
• Actions taken: load and RE forecasting; power plant flexibility; flexible transmission;
established RE management centres; reserves and ancillary services
Source: POSOCO 39 © OECD/IEA 2018
 Power system flexibility enhancement roadmap in China

• Around 200 GW of conventional power plants will be retrofitted by 2020 (~20% of the
total coal capacity China).

• Lowering the minimum stable operation load is the first priority in the near future.

• 22 demonstration power plants with 17 GW total capacity

50%->20% 2%/min->5%/min 4h->2h

Lower
Fast ramp-up Quick startup
minimum load

Increasing wind and solar penetration

Source: EPPEI 40 © OECD/IEA 2018
Fleet coordination and the use of PSH – Kyushu, Japan

Kyushu has the highest VRE penetration in Japan

First PV curtailment on 13 October 2018
• 6 GW PV capacity
• 16 GW peak load, 8 GW min. daytime load,
6 dispatch rules developed by the Japanese
Organization:
• Avoid generation from reservoirs and PSH
during daytime.
• Prioritise electricity surplus absorption by PSH.
• Reduce thermal plant output to min gen
• Export surplus electricity through cross-
regional interconnectors.
• Reduce biomass power plant output
• Curtail solar PV and wind as a last resort.

Introducing protocols for coordinating power plant response to manage VRE variability can be useful in
maintaining system stability at high VRE shares.
Source: Kyushu EPCO, Case-study on portfolio coordination based on system conditions from 30 April 2017 41 © OECD/IEA 2018
The role of energy storage in the power system

• Storage can play a key role to integrate high shares of VRE

• Pumped hydro storage accounts for the majority of storage technologies that are
currently being deployed.

• Some storage technologies can provide system services to the grid.

- Flywheels can add to system inertia
- Batteries can provide frequency response – Examples in Chile and PJM

• Main benefits in the early phase is economic (arbitrage). At high shares of VRE,
storage can contribute to maintain grid reliability (congestion management,
frequency response)

42 © OECD/IEA 2018
 Storage in power system applications

Different storage technologies can be best suited for different power system applications
Source: IEA, Energy Technology Perspectives 2014 43 © OECD/IEA 2018
Electricity storage can provide grid services

Jurisdiction Detail
Chile
• Battery storage is used for grid stabilisation purpose

Italy
• More than 40 MW of battery storage technologies have been deployed
to solve grid congestion and to provide frequency regulation

National Grid UK • Procured 200 MW of FFR through tenders in 2016. Most of which are
battery projects

PJM
• 250 MW of electricity storage can provide fast frequency response

Australia
• Tesla built 100MW/MWh battery in South Australia
• Able to provide frequency control ancillary services
44 © OECD/IEA 2018
Demand shaping – the role of demand response
Change in load with Demand shaping
30000
Load

25000

Load
20000 (demand
MW

shaping)
15000
Net Load

10000

Net Load
5000 (demand
shaping)
0
1:00 3:00 5:00 7:00 9:00 11:00 13:00 15:00 17:00 19:00 21:00 23:00

Shifting power demand away from the morning and evening peaks, and towards midday, may reduce
ramping needs and facilitate continued deployment of solar PV
45 © OECD/IEA 2018
Demand Side Response in PJM
Demand response committed MWs by delivery year (left axis) and
share of total flexibility sources (right axis) in PJM market
14 000 7%

12 000 6%
Capacity

% of Total PJM Committed Capacity

10 000 5%
MW

8 000 4%

6 000 3%

4 000 2%
Share of
2 000 1% total

0 0%
2000 2001 from:
Adapted 2002 PJM
2003(2016),
2004 Demand
2005 2006 2007 2008
Response 2009 2010
Operations 2011Activity
Markets 2012 2013 2014
Report, 2015 2016
September 20162017 2018 2019

46 © OECD/IEA 2018
Demand Side Response from EV smart-charging

• DSR are valuable with high VRE

• A case study of Thailand’s system showed the role of smart EV charging
- Utilise high solar output during the day to charge EV
- Reduce evening peak demand

Generation/Load (MW) With optimised EV load

30 000 30 000
25 000 25 000
20 000 20 000
15 000 15 000
10 000 10 000
5 000 5 000
0 0
31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec
00:00 03:00 06:00 09:00 12:00 15:00 18:00 21:00 00:00 03:00 06:00 09:00 12:00 15:00 18:00 21:00
Nuclear Coal Biomass and waste Other gas CCGT
Hydro Solar Wind CCGT (OC mode) GT (diesel)
VRE curtailment Load Net load Unmodified load
47 © OECD/IEA 2018
Summary

• Power systems experiencing technological, institutional and economic innovations,

combining to transform the sector
• Challenges for integrating wind and solar are smaller than expected at the beginning
- Power systems already have flexibility available for integrating wind and solar

• Challenges and solutions can be group according to different phases

- Measures should be proportionate with the phase of system integration
- Barriers can be technical, economic and institutional, all three areas are relevant

• The role of existing conventional power plants is transitioning in many power systems
toward more flexible modes of operation and, at times, reduced operating hours.
- Significant system flexibility lies latent in many power plants; global experience suggests a
range of known strategies are available to unlock that flexibility, many non-technical.

• Power plants are one option to provide system flexibility, but many other options are
available in modern power systems.
48 © OECD/IEA 2018
Expanding to all flexibility options!

Non-government members
Campaign Co-leads

Participating CEM Members

49 © OECD/IEA 2018
Power System Flexibility Campaign

Advanced Power Demand Side

Plant Flexibility Response
IT and increased
Building on experiences
connectivity are
from APPF
enabling rising shares
Novel approaches for
of industry, businesses
virtual power plants
Flexibility strategies are
POWER SYSTEM and households to
adjust their demand
Digitalization and
evolving constantly
Grids and DSM and
Power Plants
Modern grid
FLEXIBILITY
Future
HarnessingMarkets
Technology and Markets
Storage
Rapid development of
management techniques, for Power System Transformation storage technologies
interconnectors and making applications
balancing area
across the power system
coordination
increasingly competitive

Grids Storage

Institutional, economic and technical aspects of system flexibility are addressed in 3 thematic blocks.

50 © OECD/IEA 2018
 PSF – Project timeline
February 2019
14-15th
Deep-dive event & April 2019 Deep- 27th May 2019
18th and 19th
May 2018 High-level forum on dive event & Report launch at
October Suzhou
Launch at System Integration high-level forum CEM10 and High-
Jun 2018 Forum on Power
CEM9 of Renewables Copenhagen or level forum
Kick-off System
Copenhagen Yokohama Paris Berlin Vancouver
Transformation

Planning
Grids & Digitalization & Future
Preparation for DSM & Storage Finalization
Power Plants reliability Markets

21st -22nd November

Rio de Janeiro Early January
“CEM Days and Grid First formal
integration request for case
workshop” studies
51 © OECD/IEA 2018
 www.iea.org
IEA

[email protected]
52 © OECD/IEA 2018
Possible locations for electricity storage

Storage can be deployed at different scales and help to integrate different energy systems.

53 © OECD/IEA 2018
Battery storage – Lower cost of balancing

Deployment of battery storage for trading in the

balancing mechanism
Background: Wholesale market participants in unbundled markets
such as the UK are obliged to stick to their generation or
consumption position as stated in the day ahead. The intraday and
real-time markets provide further opportunities to adjust their
position closer to real time. The Uks ESO, National Grid, operates
the balancing mechanism, allowing market participants to balance
their position in each half-hour period.

Prices in the balancing mechanism can reach up to 2 500 GBP/MWh, and can be above 100 GBP/MWh for
a third of the time
Engaging battery storage can help reduce the cost of balancing using expensive peaking plants.

Due to their speed of response, battery storage can contribute to balance the system in the presence of
supply-demand deviations in the very short term.
54 © OECD/IEA 2018
Grids and Interconnection – Western US

• Western Energy Imbalance Market (EIM)

- Share balancing resources regionally
- More efficient dispatch (reduced costs,
VRE curtailment)

• Efficient operation of the power system

and also increase security of supply

• Large regional areas can advances VRE

integration

55 © OECD/IEA 2018
Demand Side Response – United Kingdom

Today’s load shape already contains DSI – Electric heating in Great Britain

• Electric heating systematic demand side strategy used today

• Flexibility source used in UK (Island) when inflexible nuclear was added to the system
56 © OECD/IEA 2018
(Thermal) power plants as a flexibility option

Low short run Non Location

Uncertainty Variability Modularity
cost synchronous constrained

Short term Asset Transmission Distribution

Stability Reserves
changes utilisation grid grid

Abundance Scarcity
Seconds Years >100km <<1km

Stability Balancing Profile / utilisation Location Modularity

In the short term: make room while keeping the lights on

In the long term: critical for bridging multi-day periods without VRE
57 © OECD/IEA 2018
Options for addressing power system operation challenges

Measures Phase 1 Phase 2 Phase 3 Phase 4

Real-time monitoring and control
Enhancing capacity of transmission lines
Power plant flexibility
Special protection scheme
Technical

Advanced VRE technologies and design

System non-synchronous (SNSP) limit
Smart inverter
Advanced pump hydro operation
Inertia-based fast frequency response (IBFFR)
Grid level storage
Sophisticated sizing of operating reserves
Economic

Integrating forecasting into system operations

Faster scheduling and dispatch
Incorporating VRE in the dispatch

Coordination across balancing areas

58 © OECD/IEA 2018
Better system operation

• VRE forecasting
Impact of scheduling interval on
• Better system operations: reserve requirements, illustration
- Dynamic generation scheduling Actual load curve
Update schedules close to real time
- Dynamic generation dispatch Load schedule -
15 minutes
Short dispatch intervals

Capacity (MW)
Load schedule -
- Dynamic use of the grid 60 minutes

Update interconnection Balancing need

schedules close to real time; 15 min schedule

sub-hourly scheduling Balancing need

60 min schedule
- Reward flexible operation 6 7
Time (hours)
8 9

Make payments based on what is

helpful for the system, not just MWh

Make better use of what you have already!

59 © OECD/IEA 2018
ToU rates and AMI for distribution operation savings

Oklahoma Gas and Electric: roll out of Advanced

Metering Infrastructure and time-of-use tariffs
Background: Between 2012 and 2015 OG&E implemented AMI roll-out
along with trialling the switch to time-of-use tariffs.

O&M saving: 36 million USD resulting to higher value services, reduced

service vehicle miles-travelled and 180 fewer legacy meter operation
positions.

Rate type USD/kWh

Variable peak pricing pilot:
Low 0.05
• 4 000 residences, 1 320 small businesses.
• Day in advance notification of critical peak pricing times Standard 0.092
• Peak load reduction of 70MW in participating customers
• 99% saw savings. Avg. 191.7 USD (Res) and 570.02 USD (Com) High 0.218
• OG&E expects to defer 170 MW of additional generation through roll-
Critical peak 0.458
out to 20% of customers

Engaging residential and commercial consumers in demand response can result in substantial cost
savings for utilities
Source: EPA AMI report 2016 60 © OECD/IEA 2018
Non-wire alternatives for the transmission grid

Bonneville Power Administration I-5 Transmission

project
Background: BPA, US Pacific Northwest, had planned a 500 kV
127km line, and associated substations totalling 722 mio. USD to
meet expected demand increase.

BPA agreed to carry a review in response to stakeholders concerns

regarding the project’s impact.

BPA contracted a firm to carry out an alternative assessment. The

firm’s pre-screening found it would be possible to maintain
reliability through a combination of transmission system upgrades,
demand side response and energy efficiency measures.

Demand side integration can contribute to reduce the cost of grid reinforcements in the face of rising
energy demand
61 © OECD/IEA 2018
Measures to integrate variable renewables

Technical measures Economic measures

• Address system reliability issues • Improve the cost-effectiveness

arising from VRE of power system operation
• Some measures can also improve • Without economic measures, the
the cost-effectiveness of power grid can still operate in a reliable
system operation manner (but more costly)
• E.g. real-time monitoring and • E.g. better forecasting, reduce
control, power plant flexibility, dispatch interval, include VRE in
enhancing line capacity the dispatch

• A range of measures to maintain reliability and cost-effectiveness

• Different measures are needed for different phases of VRE deployment
• Grid code is important for successful integration
62 © OECD/IEA 2018
The energy and data structure of the power system is changing

Centralised fuel production,

power and storage

The system is moving away from a one-directional energy delivery philosophy

63 © OECD/IEA 2018
The energy and data structure of the power system is changing
Co-generation Renewable energy resources

Centralised fuel production,

power and storage

Distributed
energy resources
Smart energy
system control

H2 vehicle

Surplus heat EV
The system is moving away from a one-directional energy delivery philosophy to a digitally-enhanced,
multidirectional and integrated system. Paradigm change for the low- and medium-voltage grids
64 © OECD/IEA 2018
 Key transition challenges in different phases of integration

Need for seasonal storage and use

of synthetic fuels or hydrogen
Key transition
Phase 6. Seasonal or inter-annual Long term energy storage,
challenges Coping with longer periods of 6
surplus or deficit of VRE supply e.g. power to gas, renewable
surplus or deficit of energy
fuel trade
Ensuring robust power supply 5 Phase 5. Growing amounts of VRE surplus
during periods of high VRE (days to weeks) Medium term storage, e.g.
generation electrification
4 Phase 4. The system experiences periods where VRE
Accommodating greater variability Advanced tech to increase
makes up almost all generation
of net load and changes in power stability; digitalization and
flow patterns on the grids Phase 3. VRE generation determines the operation pattern of the smart grids; storage; DSR
3
Minor changes to operating system
Plant retrofits, improve grid
patterns of the existing
infrastructure,
system 2 Phase 2. VRE has a minor to moderate impact on system operation
Integrate VRE forecasting in
economic dispatch
1 Phase 1. VRE has no noticeable impact on the system
Flexibility options to enable
transition

Key challenges in each phase that should be addressed for moving up to higher phases of VRE
integration
Source: World Energy Outlook 2018 65 © OECD/IEA 2018
Flexibility options for different phases of VRE integrat
Operation
Phase 6 Long-term storage

time monitoring and control, faster dispatch

Peer-to-peer

Improved operations e.g. forecasting, real

Policy, regulatory and market frameworks

trading Medium-term

Institutional roles and responsibilities;

Phase 5 Advanced
technology to Commercial and storage
Advanced
increase stability residential Battery storage
plant design

to enable transition
Phase 4
Flexibility from Special protection Large industrial Reservoir hydro
VRE schemes
Phase 3
Improved grid
Plant retrofits
infrastructure
Phase 2
Phases 1 and 2 can usually be managed through existing resources and operational
Phase 1 practices

Power Plants Grids DSR Storage

Key flexible resource examples to enable transition
Flexibility resources can mitigate the challenges from VRE integration in different phases and allowing
the system to integrate more VRE
66 © OECD/IEA 2018