The MIT Energy Initiative MITEI is also a resource for policy makers and the public, providing unbiased analysis and serving MITEI pairs the Institute’s world-class research as an honest broker for industry and government. teams with key players across the innovation MITEI’s educational offerings combine single-discipline Managing Large-Scale spectrum to help accomplish two important depth with multidiscipline breadth, making our goals: improving today’s energy systems campus an energy learning laboratory. Through Penetration of Intermittent and transforming tomorrow’s global energy research, analysis, and education, MITEI is working marketplace. to find answers to reinvent our energy world. Renewables Linking science, innovation, and policy to transform the world’s energy systems Energy Initiative Massachusetts Institute of Technology An MIT Energy Initiative Mailing address Symposium 77 Massachusetts Avenue, E19-307 Cambridge, MA 02139 USA April 20, 2011 Visiting address 400 Main Street, E19-307 (3rd Floor) Cambridge, MA 02142 USA 617.258.8891 web.mit.edu/mitei MIT Energy Initiative Symposium on Managing Large-Scale Penetration of Intermittent Renewables | April 20, 2011 C Export pages Managing Large-Scale Penetration of Intermittent 1-55 only!!!!!! Renewables An MIT Energy Initiative Symposium April 20, 2011 A B O U T T H E R E P O R T Summary for Policy Makers On April 20, 2011, the MIT Energy Initiative (MITEI) sponsored a symposium on Managing Large-Scale Penetration of Intermittent Renewables that brought together experts in electricity generation, transmission system management, and regulation to discuss the impacts of large- scale penetration of intermittent renewables on electrical power systems. Intermittency refers to the limited control of electrical output from variable and partially predictable generating technol- ogies, such as wind and solar. The grid can accommodate small amounts of intermittent electricity generation, but large-scale penetration requires rebalancing the different elements of the elec- tricity system: generation, transmission, storage, demand management, and regulation. The symposium focused on three different aspects of intermittency: (1) prospects for more flexible operation of thermal power plants — coal, nuclear, and natural gas-fired — to compensate for intermittent sources through cycling and ramping, and the economic significance of this added flexibility; (2) impact of intermittent generation on the transmission grid and system operation; and (3) intermittent renewable generation policies and regulation. The symposium did not address the question as to the desired level of wind and solar, just the issues of managing their large-scale deployment. Prepared and contributed papers informed panel discussions; these documents are available at www.mit.edu/mitei. Symposium participants came from different backgrounds and expressed a wide range of views. Here we summarize for policy makers the key points from the lively discussions. The summary reflects our observations, and it is not offered as a consensus view of the symposium participants. s Framing the issue. Twenty-nine states, the European Union (EU), and countries around the world have adopted policies and incentives to encourage deployment of low-emission renew- able elec tricity generating technologies. This has led to a rapid increase in wind and solar generation, both of which are intermittent non-dispatchable electricity sources. While their deployment remains small today in aggregate, some regions of the US and some countries have sub stantial amounts of wind power. This operational experience informs the challenges facing technology, policy, and regulation in managing widespread large-scale deployment. The characteristics of intermittent sources require system operators to adopt different, and more costly, measures to balance load and generation and maintain system reliability. Intermittency also will influence planning and design of future systems, electricity markets, and regulation. The technical and policy issues will not be resolved quickly because new arrangements will involve winners and losers compared to conventional grid operations. 1. Flexible operation of thermal power plants. In 2010, thermal generation plants — coal, natural gas, and nuclear — provided 88% of US electricity generation. In the absence of pervasive utility-scale and economic storage systems, these units will be required to provide flexibility in a power system where large-scale penetration of intermittent renew- ables is mandated in the absence of large-scale storage. Providing generation flexibility entails fast ramping times, short startup times, and efficient partial load operation. Coal plants and current nuclear plants were not designed specifically for this flexible operation, but were instead intended to provide steady baseload generation. Natural gas plants, on the other hand, have been built, in part, with flexibility in mind in order to respond to the daily variations in load. However, the economics of baseload plants are affected signifi- cantly if they are called upon to operate in load-following mode. This is most clear for nuclear power. The very high capital costs require very high capacity factors for cost recovery. 2 MIT Energy Initiative Symposium on Managing Large-Scale Penetration of Intermittent Renewables | April 20, 2011 Expanding the ability of coal, natural gas, and nuclear plants physically to ramp and cycle to varying degrees will negatively impact their operations, maintenance schedules, and expected operational lifetimes. Retrofits, advanced control systems, and newer plant designs can improve flexible operations and provide better monitoring of physical wear, but these upgrades are technically demanding and costly. In addition, when thermal generation plants are operated at partial load, fuel efficiencies will decrease, emissions will increase, and total system costs will be raised, thus diminishing the benefits of renew- able generation. Accordingly, it will be crucial to assess continuously the balance between the benefits of greater renewable penetration with the cost of adapting conventional baseload systems to meet new operating requirements. Increased flexibility of baseload generation will require new regulatory practices to allocate the recovery of the additional capital cost incurred by more flexible thermal generation capability among intermittent generation units, to adapt economic dispatch rules that take into account the differences in variable cost, and to offer incentives and compensate for sufficient capacity for balancing supply and demand in the face of uncertainty in both. The costs to thermal plant operators of dealing with increased ramping and cycling requirements at different timescales remain to be understood in detail. Today, the optimal dispatch of thermal and intermittent sources cannot be implemented. The underlying point is that increased cycling of thermal power plants because of large-scale deployment of intermittent sources will require incorporation of both spatial and temporal consider- ations that have not been employed in economic dispatch algorithms. 2. Managing intermittent generation on system operations. Transmission, distribution, and storage technology improvements can aid the integration of intermittent renewables. These improvements include geographic aggregation, which smoothes the variability of the intermittency of wind and solar energy over large distances; increasing network intercon- nections to facilitate balancing through electricity imports and exports; and utilization of advanced sensors, control systems, and dispatch algorithms that can monitor and respond to power system changes in real time. Progress is slow because of inadequate mechanisms for exchanging data and setting interface standards, and because system operators under- standably tend to be risk-averse and place a higher premium on reliability than on innova- tion. Improved analytical and modeling tools are needed to optimize operation and regulation of the transmission and distribution system with significant deployment of intermittent generation. 3. Intermittent renewable generation policies and regulation. Policies have been adopted around the world to promote deployment of renewable generation. These policies have been successful in increasing the capacity of wind and solar generation in various national systems, but the cost and operating implications of these policies are not fully appreciated. It is clear that policies that regulate investment, operations, and rates will undergo significant change. It is becoming clear that the total costs and consequences of these policies were not fully understood. In order to ensure the goals of reliability and economic efficiency while simultaneously lowering carbon emissions, substantial regulatory changes are needed. This is further complicated by the location of renewable resources, which is often remote from major load centers, which means transmission may cross multiple jurisdictions, greatly complicating siting options and opportunities. MIT Energy Initiative Symposium on Managing Large-Scale Penetration of Intermittent Renewables | April 20, 2011 3 In the US, power sector regulation is complex and involves three distinct levels of regulation with the Federal Energy Regulatory Commission (FERC) and the North American Electricity Reliability Corporation (NERC) at the federal level, a range of Regional Transmission Operators (RTO) and Independent System Operators (ISO) at the