BRINGING VARIABLE RENEWABLE ENERGY up to SCALE Options for Grid Integration Using Natural Gas and Energy Storage

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BRINGING VARIABLE RENEWABLE ENERGY up to SCALE Options for Grid Integration Using Natural Gas and Energy Storage TECHNICAL REPORT 006/15 BRINGING VARIABLE RENEWABLE ENERGY UP TO SCALE Options for Grid Integration Using Natural Gas and Energy Storage ESMAP MISSION The Energy Sector Management Assistance Program (ESMAP) is a global knowledge and technical assistance program administered by the World Bank. It provides analytical and advisory services to low- and middle- income countries to increase their know-how and institutional capac- ity to achieve environmentally sustainable energy solutions for poverty reduction and economic growth. ESMAP is funded by Australia, Austria, Denmark, Finland, France, Germany, Iceland, Lithuania, the Netherlands, Norway, Sweden, and the United Kingdom, as well as the World Bank. Copyright © February 2015 Copyright © October 2014, Conference Edition The International Bank for Reconstruction And Development / THE WORLD BANK GROUP 1818 H Street, NW | Washington DC 20433 | USA Energy Sector Management Assistance Program (ESMAP) reports are published to communicate the results of ESMAP’s work to the develop- ment community. Some sources cited in this report may be informal documents not readily available. The findings, interpretations, and conclusions expressed in this report are entirely those of the author(s) and should not be attributed in any manner to the World Bank, or its affiliated organizations, or to members of its board of executive directors for the countries they represent, or to ESMAP. The World Bank and ESMAP do not guarantee the accuracy of the data included in this publication and accept no responsibil- ity whatsoever for any consequence of their use. The boundaries, colors, denominations, and other information shown on any map in this volume do not imply on the part of the World Bank Group any judgment on the legal status of any territory or the endorsement of acceptance of such boundaries. The text of this publication may be reproduced in whole or in part and in any form for educational or nonprofit uses, without special permis- sion provided acknowledgement of the source is made. Requests for permission to reproduce portions for resale or commercial purposes should be sent to the ESMAP Manager at the address below. ESMAP encourages dissemination of its work and normally gives permission promptly. The ESMAP Manager would appreciate receiving a copy of the publication that uses this publication for its source sent in care of the address above. All images remain the sole property of their source and may not be used for any purpose without written permission from the source. Written by | Silvia Martinez Romero and Wendy Hughes Energy Sector Management Assistance Program | The World Bank C TABLE OF CONTENTS Acronyms and Abbreviations iii Acknowledgments iv Executive Summary 1 1 | INTRODUCTION 7 Focus on Flexibility 8 2 | INTEGRATING VARIABLE RENEWABLE ENERGY INTO POWER GRIDS: CHALLENGES AND SOLUTIONS 11 Characteristics of VRE generation 11 Variability 11 Limited Predictability 14 Site-Specific 14 Power System Operator Responsibilities 15 Challenges for Power System Operators and Planners 17 Planning 17 Scheduling and Load Following 19 Regulation 20 Suite of Measures for VRE Integration 21 3 | NATURAL GAS AS A FACILITATOR FOR VRE INTEGRATION 27 Natural Gas-Fired Generation as a Source of Flexibility 27 Limitations of Gas-Fired Generation in Supporting VRE 29 4 | STORAGE AS A FACILITATOR TO VRE INTEGRATION 33 Storage Technology Options 33 Benefits of Commercial Storage Technologies at Different Timescales 38 Limitations of Storage for Supporting VRE 41 Prospects for Overcoming Storage Limitations 44 5 | PLANNING, POLICY, AND REGULATION CONSIDERATIONS 47 Financial Viability of Existing Gas-Fired Power Plants 47 Incentivizing Flexibility and Capacity 50 Implications for Natural Gas Demand 53 Taking Care of Short-Term Imbalances in Long-Term Planning 55 Competitiveness of Energy Storage vs. Other Flexibility Sources 57 Combined Use of Flexibility Measures 58 6 | CONCLUSIONS AND RECOMMENDATIONS 59 ANNEXES 61 GLOSSARY 77 REFERENCES 80 List of Figures and Tables Figure 1.1 Countries with Renewable Energy Targets 8 Figure 2.1 Effect of Wind Aggregation on Variability 12 Figure 2.2 Comparison of Photovoltaic Power Production Variability in Southern California, USA 13 Figure 2.3 Monthly Solar Photovoltaic and Wind Power Production, Germany (2013) 13 Figure 2.4 Stability and Reliability as the Pillars of Quality of Supply 15 Figure 2.5 Comparison of European and US Operating Reserves Terminology 16 Figure 2.6 Potential Impact of High Shares of VRE on Power System Operations and Planning 18 i Figure 2.7 Balancing (Load Following) Requirement 20 Figure 2.8 Regulation Requirement 20 Figure 2.9 Main Measures to Reduce and Manage Generation Variability and Uncertainty at High Levels of VRE 22 Figure 2.10 Issues Assessed in Planning and Simulation VRE Integration Studies 24 Figure 3.1 Typical Open Cycle Gas Turbine Part Load Performance 28 Figure 3.2 Comparison of Start-up Rates in CCGT: Conventional vs. New Fast-Response Designs 29 Figure 3.3 Comparison of Hot Start-up Rates among Different Natural Gas Technologies 30 Figure 4.1 Commercial and Pre-Commercial Storage Technologies 34 Figure 4.2 Map of Storage Technologies and Their Applications 35 Figure 4.3 Energy Storage Participation along the Power Supply Chain 36 Figure 4.4 Community Energy Storage 37 Figure 4.5 Potential Contribution of the Main Commercial Storage Technologies to VRE Integration at Different Timescales 41 Figure 4.6 Average Energy Storage Equipment Costs and Installed Costs, by Technology 43 Figure 4.7 Anticipated Research and Development Investment for Utility Scale Storage Technologies 45 Figure 5.1 Global Distribution of Dynamic and Static Powers Markets 47 Figure 5.2 Impact of Extreme Wind Events on Gas Demand 54 Figure 5.3 Elements of Natural Gas Infrastructure 55 Figure 5.4 Recommended Loop for a VRE Grid Intergration Study 56 Table 4.1 Energy Storage Performance Metrics 33 ii ACRONYMS AND ABBREVIATIONS AGC Automatic generation control LNG Liquefied natural gas CAES Compressed air energy storage MAE Mean absolute error CAISO California Independent System Operator MT Micro- or mini-turbine CCGT Combined cycle gas turbine NaS Sodium sulfur (battery) CES Community energy storage NERC North American Electric Reliability Corporation CO2 Carbon dioxide NG Natural gas CPV Concentrated photovoltaics O&M Operations and maintenance CSP Concentrating solar power OCGT Open cycle gas turbine CT Combustion turbine PJM PJM Interconnection, LLC (a regional transmission organization, US) DES Distributed energy storage PV Photovoltaic DR Demand response R&D Research and development DSM Demand-side management RD&D Research, development and deployment GHG Greenhouse gas RE Renewable energy GWEC Global Wind Energy Council SMES Superconducting magnetic energy storage HTF Heat transfer fluid T&D Transmission and distribution LAES Liquid air energy storage TES Thermal energy storage LCOE Levelized cost of electricity VRE Variable renewable energy All currency in United States dollars (USD or US$), unless otherwise indicated. iii ACKNOWLEDGMENTS This report synthesis draws from several internal reports commissioned by the World Bank under the Renewable Integration initiative financed by Energy Sector Management Assistance Program—NOVI Energy (2012) and DNV_KEMA (2012; 2013)—and several other recent World Bank publications— Transmission Expansion for Renewable Energy Scale-up: Emerging Lessons and Recommendations (Madrigal & Stoft 2012) and Operating and Planning Electricity Grids with Variable Renewable Generation (Madrigal & Porter 2013). The final synthesis was written by Silvia Martinez (Senior Energy Specialist, ESMAP) under the guidance of Wendy Hughes (Lead Specialist, ESMAP) and Rohit Khanna (Program Manager, ESMAP). Recent developments and findings described in published reports, as well as additional information obtained in conferences, knowledge sharing events, and expert interviews were used to provide an updated overview on the topic. The work on Renewable Energy Integration was initiated by Natalya Kulichenko (Senior Energy Specialist, World Bank) and supported by Michael Levitsky (Senior Energy Specialist, World Bank) and Silvia Martinez Romero. In a second stage, Silvia Martinez led the project to completion with the assistance of Rafael Ben (Renewable Energy Specialist, consultant). Substantial guidance was received by Marcelino Madrigal (Senior Energy Specialist, World Bank), Pierre Audinet (Clean Energy Team Leader, ESMAP), and Rohit Khanna (Program Manager, ESMAP). Comments from Marcelino Madrigal, Rhonda Lenai (Energy Specialist, World Bank), Karen Bazex (Energy Specialist, World Bank), Robert Lesnick (Senior Energy Specialist, World Bank), Istvan Dobozi (consultant), Almudena Mateos (Energy Specialist, ESMAP), and Guillermo Hernandez (Energy Specialist, World Bank) were greatly appreciated. Special thanks to the peer reviewers of the internal consolidated report: Kwawu Mensan Gaba (Lead Energy Specialist, World Bank), Sergio Augusto Gonzalez (Senior Energy Specialist, World Bank), and Alan F. Townsend (Senior Energy Specialist, World Bank). Finally, thanks to the external reviewers of this synthesis report: Thomas Ackerman (Energynautics), Ralf Wiesenberger, and Enrique Serrano (S2M). Final editing and production of the report was undertaken by Nick Keyes and Heather Austin (ESMAP). The financial and technical support by ESMAP and the Energy and Extractives Global Practice of the World Bank is gratefully acknowledged. ESMAP—a global
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