Joint OSPE – PEO Chapter Energy Policy Presentation Prepared by OSPE’s Energy Task Force 1.

Joint OSPE – PEO Chapter

Energy Policy Presentation

Prepared by OSPE’s Energy Task Force

Limits to Renewable Energy Penetration

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The Ontario generation (other than solar) and customer demand data was obtained from the IESO website (http://www.ieso.ca).

Solar flux data comes from the Canadian Weather for Energy Calculations (CWEC) dataset for Toronto, Environment Canada. Solar generation output simulations were produced courtesy of CarbonFree Technology using PVsyst simulation software.

Electricity production cost data was obtained from Ontario FIT rates and the Projected Costs of Generating Electricity, 2010 Edition, Organization for Economic Co-operation and Development, median case with carbon tax removed.


Data Sources

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Renewable (permanent) resource.

Low operating emissions (CO2 and other waste) excluding consideration of backup generation.

Low fuel costs (small royalty for property owners). Easy to build/install, short project cycle. Easy to distribute geographically (less transmission). Wind/solar deliver the best value in grids that have

significant amounts of maneuverable coal fired generation (eg: USA, Europe, China). When the wind blows or sun shines, coal backs off and CO2 emissions drop dramatically.


Benefits of Wind/Solar Generation

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High capital costs (but costs are dropping). Production profile does not match customer

demand profile. Wind has the worst match. Ontario does not have seasonal storage to help

integrate wind and solar generation. Low capacity factors (wind 30%, solar <15%). Electrical demand is not rising in Ontario. Wind generation has health and esthetic

concerns. Solar generation has land use concerns.


Challenges Facing Renewable Generation

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Renewables need a significant amount of backup capacity. For example, wind generation across the entire province dropped to 10% of installed capacity for over 24 hrs on 20 occasions in 2011.

Hydroelectric and nuclear plants provide base load power at night. Wind has a fuel displacement value of only 0.5 cents/kWh at night but we pay about 10 cents/kWh for wind energy.

Natural gas fired plants provide peak power during the day. Solar has a fuel displacement value of only 3 cents/kWh but we pay about 50 cents/kWh for solar. GHG reduction value is only 1 cents/kWh at $30 /ton CO2


Challenges Facing Renewable Generation

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Hydraulic and nuclear stations currently supply most of the base load demand. And don’t have much load following capability.

If we shut down a nuclear unit to accommodate wind generation one evening. The reactor cannot return to service for 3 days due to reactor physics characteristics (Xenon 135 poison buildup).

That means gas is required to back up the wind if it subsequently drops off and nuclear is shutdown. The IESO (System Operator) estimates that in 2014 (not the worst year) nuclear shutdowns, if we don’t shut down wind & solar when we can’t use it, would result in >180 Million $’s in additional natural gas fuel costs and 1.6 million tons in additional CO2 emissions.


Electrical Grid Constraints

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Ontario hydraulic plants have limited daily storage capability and no seasonal storage capability.

Seasonal storage is expensive. Pumped hydroelectric storage is the cheapest at about $6,000 - $9,000 per kW depending on the storage reservoir size. About 20 - 30% of the energy is lost in the storage conversion process. Storage cost has to be added to the production cost of that energy source.

Hydroelectric storage requires large land areas. To handle 7,500 MW of planned wind capacity and shift production from spring to summer and fall to winter we would need about 5,000 MW with 500 hours of storage capacity. That would require a 750 sq. km. upper reservoir, 15 meters deep and 100 meters above the lower reservoir or lake.

Battery storage is much more expensive at about $1,000 to $2,000 per kWh of storage capacity. That’s a 2.5 trillion dollar battery !


Electrical Grid Constraints

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Dispatching is the deliberate change in the output of a generating unit to match customer demand (up or down).

Solar and Wind have low capacity factors so if we dispatch them their effective cost per kWh rises rapidly.

Ideally you don’t want to overbuild wind and solar capacity because you can’t afford to waste their energy !


Why We Don’t Like to Dispatch Solar and Wind

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Limits to Renewable Energy PenetrationWhy We Don’t Dispatch Solar and Wind

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Impact of Dispatching on LCOE for 5% DFCCGT at 16 $/M.BTUCCGT at 12 $/M.BTUCCGT at 8 $/M.BTUCCGT at 4 $/M.BTUNuclear with Stm BypassOn-shore Wind, 29% Max CF",

Reduction in % Capacity FactorCaused by Dispatching

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Electricity demand is not steady and generation must always match demand for stability.

Spring and autumn demand is much lower than winter and summer demand. Summer demand is the highest.

Daytime demand is much higher than nighttime demand. Daily demand variations must be managed by

dispatching generation to match demand. Not all seasonal demand variations can be managed by

careful scheduling of maintenance outages. The remaining seasonal demand variation is managed by bringing idle plants into service during high demand weeks.


The Challenges of Meeting Electricity Demand

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Ontario Spring / Summer Demand Variation

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Electrical Demand Profile (excluding exports)

Base load is provided by:- Must run natural gas- Must run hydraulic- Must run nuclear- Must run CHP- Night time wind

Peak load is provided by:- Solar- Daytime wind- Flexible nuclear- Flexible hydraulic- Flexible CHP, bio-

energy- Flexible Natural Gas

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Meeting Demand in Ontario + Exports – 1 Week

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Hydraulic and Nuclear Production ( Lowest demand week in 2011 )

Total Demand incl. exports

Hydraulic + Nuclear Output

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Hydraulic and Nuclear Produciton( Highest demand week in 2011 )

Total Demand incl. exports

Hydraulic + Nuclear Output

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The gap is available for solar, wind, CHP and gas-fired generation.

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Where Can Wind/Solar Fit In ?

The distance or gap between the red demand line and the blue production line in the previous slide is the “residual demand” after the production from hydraulic and nuclear plants are accounted for.

We can re-plot the residual demand on its own so we can more easily see what is available for renewables.

If we don’t want to waste (dispatch) wind and solar production, we need to keep the maximum amount of wind/solar generation below the residual demand line on the next slide.

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Where and How Can Wind Fit In ?

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Residual System Demand with Max Wind Generation( lowest demand week in 2011 )

Residual Demand for Wind, Solar, Gas

Max 2,250 MW Wind Output without Waste or Storage

MW

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Where and How Can Solar Fit In ?

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Residual System Demand with Max Solar Generation( lowest demand week in 2011 )


Max 3,300 MW Solar Output without Waste or Storage

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Where and How Can Wind & Solar Fit In ?

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Residual System Demand with Max Combined Wind and Solar Generation( lowest demand week in 2011 )


Max 1,400 MW Wind + 2,050 MW So-lar Output without Waste or Storage

MW

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On April 29, 2013 Ontario achieved a CO2 emission level of 72 grams per kWh. One of the lowest emissions of any mixed generation grid in the world. Europe is at 375 and the US and China are higher.

The day that record was set, nuclear and hydraulic plants provided 84% of the energy. Renewables provided 2% and natural gas provided the rest.

Renewables currently use natural gas backup so they cannot achieve low GHG emissions overall.

Low GHG emissions are only achievable economically with hydroelectric and nuclear generation.


How is Ontario Doing on CO2 Emissions ?

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Ontario does not have enough daily and seasonal storage or nuclear load following capability to allow higher penetration of wind and solar generation.

By 2018, Wind generation projected at about 7,500 MW capacity in the province’s 2010 Long Term Energy Plan (LTEP) will be significantly overbuilt. It appears the government is reconsidering that capacity commitment.

By 2018, solar generation projected at about 2,400 MW in the LTEP will be close to its maximum capacity.

Additional storage will allow greater penetration of wind and solar generation but will increase the cost of electricity significantly.


Summary/Conclusions

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Overbuilding wind and solar capacity results in:

Hydraulic spill (eg: at Niagara Falls), nuclear unit shutdowns, higher gas fuel costs and higher GHG emissions if we don’t shutdown wind an solar generation when the energy cannot be used (pre-September 2013 situation).

Waste of renewable energy if we shutdown wind and solar generation (dispatching will begin in Sept 2013).

Higher electricity rates via the global adjustment mechanism.

Scaling back our commitments for wind and solar capacity will reduce the rise in electricity rates and lower our GHG emissions.


Summary/Conclusions (continued)

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Questions ?

Joint OSPE – PEO Chapter Energy Policy Presentation Prepared by OSPE’s Energy Task Force 1.

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Transcript of Joint OSPE – PEO Chapter Energy Policy Presentation Prepared by OSPE’s Energy Task Force 1.