Imagination at work

Distributed Generation and DER Management: Technical Perspective

Jovan Bebic, GE Energy Consulting ARPA-E Workshop, Washington DC July 31, 2014

Overview

The question:

Quantify the benefits of more flexible DER management (Load, DG, ES) Concentrate on

improvements to efficiency and emissions

The approach:

Study impacts at large scale, e.g. PJM (~20% of US load)

Define modeling proxies for DER technology features

and quantify their value using production simulations (GE MAPS)

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Acknowledgment

Thank you to the GE Energy Consulting team:

Gene Hinkle

Bahman Daryanian

Derek Stenclik

Bob Woodfield

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Initial Condition – PJM Non-Renewable Fleet Markets favor low cost

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Tech CO2 t/GWh

SOX t/GWh

NOX t/GWh

Nuclear -- -- --

Coal 1007.3 1.014 0.869

CCGT 433.5 0.071 0.003

SCGT 666.1 0.339 0.040

CCGT, 38,143 , 18%

Coal, 63,714 , 29%

NUCLEAR, 34,827 , 16%

1%

1%

1%

SCGT, 64,592 , 30%

1% 3%

CCGT

Coal

NUCLEAR

OTHER

Pondage

PumpedStorage

SCGT

STEAMGAS

STEAMOIL

Tech Cap Cost $/kW

Var Cost $/MWh

Eff %

Nuclear 5,530 12.21 32.2

Coal 2,934 44.15 34.7

CCGT 1,023 56.22 46.8

SCGT 676 95.78 30.5

183GW Gen Capacity, 165GW Peak Load, 794GWh Annual Energy, 61M People Source: PJM 2013 Annual Report

Primary fuels consumption for generation Increase in renewable production can lower energy output of thermal fleet

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30% PJM study target

The 2026 Base Case (30% renewables)

1.0

34.5

14.7

0.4

1.6

5.1

4.0

0.2

0.4

1.1

2.5

Wind GW

Solar GW

8.9

0.2

3.5 3.9 5.4

2.9

2.7

0.4

1.3

Total Wind & Solar

Onshore Wind 59.8 GW

Offshore Wind 6.8 GW

Solar 30.8 GW

0.5

0.3

0.1

0.2 0.4

1.1

0.3

Note: Dots indicate wind plant sites; Solar resources are not shown.

Wind forecasting will be a key challenge beyond 30% penetration

Supply/Demand Balance

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Change in net load and its impact

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Nuclear ceiling

Demand response

The Impact to the Power System

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0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

Thursday Friday Saturday Sunday Monday Tuesday Wednesday

Solar Dispatch

Wind Dispatch

Pondage

PSH

STEAMOIL

STEAMGAS

Net Imports

SCGT

CCGT

COAL

NUCLEAR

OTHER

Load

A more controllable DER… … How does it impact system operation?

The load can act dynamically:

a. operating reserves can be reduced => operating costs lower

b. transmission constraints can be relaxed => energy supplied by thermal plants with lower var. costs => system-wide price drop

c. can compensate for renewable forecast errors => reduced operating reserves (same as a.)

The load can be scheduled:

d. the peaks are lower => SCGTs (peakers) run less

e. the daily profiles are flatter => alters dispatch of CCGTs & Coal

Distribution circuit impacts:

• integration convenience, but insignificant economics… ARPA-E Workshop | 31 July 2014 10

Studied sensitivities

Code Description

2%BAU 2% Renewable energy, business as usual

14%RPS 14% Renewable portfolio standard

30%OrigT 30% Renewable: Low Off-shore, Best On-shore; 2017 transmission

30%NoSpin 30%OrigT + no operating reserves (~4.5GW reduction)

30%ModT 30% Renewable; transmission reduced to ensure <$5 LMP diffs

30%InfT 30% Renewable; infinite transmission

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The results

Coal falls-off nonlinearly with renewables increase from 14 to 30%, CCGTs go up.

Peakers in trouble – 0.6% capacity factor (down from 2% in BAU)

Weighted capacity factors

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Transmission constraints have the dominant impact on renewable curtailments

Delivered renewable energy

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PJM emissions dropping – renewable energy substitutes thermal energy

PJM emissions

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OrigT - NoSpin: $3.3bn/year savings in production costs

OrigT – InfT: $10.1bn/year savings in production costs

Production costs

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Customer energy costs do not have a uniform trend!

Exports to more expensive regions elevate average prices in PJM

Wholesale energy costs

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Summary

• The most impactful role of flexible DER is to alleviate transmission congestion (worth up to $10bn/year)

• The easiest to implement is substitution of operating reserves (worth up to $3bn/year)

• The markets are structured to yield lowest operating costs, so any flexibility plays first in favor of renewables, then coal

• Efficiency and emissions can be driven by energy policy to desired levels, but not without an impact to the cost of energy

• Future market and policy design should account for consumer choice that can be explicitly enabled by DER

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