Want more Solar and Wind Power? Then You Need More Gas Backup.

transmission_lineby James A. Bacon

Elona Verdolini, Francesca Vona and David Popp are deeply concerned about climate change and the need to deploy more renewable energy sources. “Decoupling economic activities from fossil-fuel use (and hence, from anthropogenic carbon emissions) is the only way to avoid severe and pervasive impacts from climate change while sustaining economic growth,” they write in a paper just published by the National Bureau of Economic Research.

But they also acknowledge a reality typically missing from economic studies of renewable energy. Wind and solar are not “dispatchable,” that is, they do not generate electricity upon demand; they generate electricity when the wind is blowing and the sun is shining. “This translates into high system costs of renewable generation, as it requires holding significant back-up capacity to ensure a balanced energy supply throughout the day. In fact, these challenges will only further increase as the share of energy generation increases to levels never witnessed before.”

Unless cheap electricity storage options become widely available in the immediate future, “the penetration of renewable energy will increase system costs, as a significant amount of capital-intensive and under-utilized back-up capacity will have to be maintained,” write the authors, who hail from Italy, France and the United States respectively.

Delving into data for 26 Organization of Economic Cooperation and Development (OECD) countries between 1990 and 2013, the authors found that an 0.88% increase in renewable energy capacity is associated with a 1% increase in the share of fast-reacting fossil generation capacity.

“To date [fast-reacting fossil] technologies have enabled [Renewable Energy] diffusion by providing renewable and dispatchable back-up capacity to hedge against variability of supply.  Our paper calls attention to the fact that renewables and fast-reacting fossil technologies appear as highly complementary and that they should be jointly installed to meet the goals of cutting emissions and ensuring a stable supply.”

Bacon’s bottom line: This is essentially the argument that the utility industry has been making, although the implications for Virginia of this high-level conclusion drawn from 26 OECD countries, many of which are far farther along in the deployment of renewables than the United States, are not immediately apparent.

PJM Interconnection, the regional transmission organization that supports wholesale electricity markets for Virginia, has estimated that the electric grid can accommodate up to 30% renewables without threatening the integrity of the electric grid. The current level of wind and solar in Virginia is a tiny percentage of that level, and even Virginia’s voluntary Renewable Portfolio Standard for 2025  is only 15%. So, it’s not as if wind and solar are likely to create the reliability issues seen in countries that heavily committed to renewables.

But this is not an issue we can ignore in the Old Dominion. If solar penetration is merely 1% or 2% of Virginia’s electricity, the need for back-up capacity is de minimus; any needed power can be purchased from wholesale markets. But what happens if solar and wind reach 15%? There is a finite amount of electricity that can be purchased from outside Virginia because there is a finite amount of transmission capacity. At what level of solar/wind penetration would Dominion Virginia Power, Appalachian Power and the smaller electric utilities be required to maintain expensive backup capacity? I don’t know of anyone who has even asked that question.

The question goes to the heart of the debate over energy policy in Virginia in the era of the Clean Power Plan, which will accelerate the phase-out of coal-powered electricity production. Environmental groups have pushed not only for more wind and solar, but they oppose the construction of new gas-fired plants, new pipelines to supply them, and new nuclear units. Some even oppose extending the life of existing nuclear units. Again, that’s fine when solar/wind is a negligible component of electricity output, but it creates problems if renewables come to dominate the system. The NBER paper reminds us that we need to understand the tradeoffs better as we make decisions that we’ll live with for decades. Right now, I fear that we lack the information needed to make intelligent choices.

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36 responses to “Want more Solar and Wind Power? Then You Need More Gas Backup.

  1. I don’t know if you purposefully confuse the issue or you genuinely do not understand.

    DVP is building combined cycle plants baseload plants when they could be building hybrid gas/solar plants.

    In other words – instead of thinking you need gas as a backup – gas becomes complementary to solar so that when solar is available -you use the solar – and when it is not -you use gas.

    this is really no different than using baseload plants when they can meet demand then bringing more gas online when demand exceeds baseload.

    using your logic – baseload (combined cycle and Nukes) is _not_ “dependable” because by itself, it cannot satisfy peak load demands.

    that’s not logical – but neither is the idea that solar by itself is not “dependable” either.

    you use a diversity of sources – to satisfy total demand.

    no one source can do it without using other sources also.

    baseload by itself “fails” unless you have peaker plants (or buy from PJM). It’s the same thing with solar. Solar by itself “fails” – but no more or less than baseload by itself fails.

    The question is why do you accept, legitimize the things (peaker gas plants) that have to be done to supplement baseload but not for solar?

    per the WaPo article that Acbar provided:

    ” The type of “fast-reacting fossil technologies” being referred to here is natural gas plants that fire up quickly. For example, General Electric and EDF Energy currently feature a natural gas plant in France that “is capable of reaching full power in less than 30 minutes.” Full power, in this case, means rapidly adding over 600 megawatts, or million watts, of electricity to the grid.

    “This allows partners to respond quickly to grid demand fluctuations, integrating renewables as necessary,” note the companies.”

    that’s a solution – Jim.

    why do you ignore it?

  2. exactly right Larry. The evidence is already clear in the European experience, where they incorporate the different energy sources. There, they deal with greater than 30% renewables; and while there have been problems, all this is effectively being dealt with as they learn over time.

    Here, in VA, we already have a substantial reserve (greater than 15%) over max. use (including a lot of new nat. gas quick response units), and our renewable infiltration is truly minimal. we need to get up to the 30% the regional compact says we can effectively deal with!

  3. Point of fact – when you burn gas instead of using solar when solar is available -you are essentially squandering a finite resource that will eventually become scarce and expensive.

    What we SHOULD want to do – is to CONSERVE that finite supply by using it ONLY when it is necessary to use it.

    Conservation came from the word Conserve – and so did that other word Conservative… – not so much any more….as “Conservatives” argue AGAINST Conservation and in favor of giving resources to for-profit ventures and to add insult to injury- use the force of government to take property from people when there is no true public purpose – when, in fact, the gas will sold for as high a price as it can fetch.

    this whole issue is a charade designed to enrich those who sell gas and electricity – to the detriment of ratepayers – longer term – when gas is not as abundant and prices higher.

    If an entity was actually working on behalf of citizens – they would want to secure supplies of gas at a fixed price for as many years as they could – and then they would husband that gas to use it as efficiently as possible by using solar whenever they could and not use that gas until they had to.

    None of this – as currently evolving is truly in the best longer term interests of citizens and consumers of electricity – and that’s the truth.

  4. LarryG, I do not see where Jim disagrees with you. But I disagree with you on one nit: you say, “DVP is building combined cycle plants baseload plants when they could be building hybrid gas/solar plants.” There is no difference between these! As long as they both feed into the same grid, they might as well be side-by-side — they are already “hybrid” in the sense of working together. Instead, put them separately wherever it’s convenient to do so — put the solar on commercial or homeowner rooftops or in fields near transmission substations, and put the NGCC plants near where there’s both transmission and a gas pipeline. The grid operator chooses which to run when. As for “base load” versus cycling, an NGCC (natural gas combined cycle) unit is inherently capable of both. In fact it’s that flexibility that is one reason they are popular with utilities these days.

    • @Acbar – in my reading, I had got the impression that peaker plants were much less efficient than combined-cycle – I think one of the other knowledgeable guys who comment here – made that point also:

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      what I’m now hearing is that the latest combined-cycle plants are both efficient AND can ramp up and down quickly.

      My impression was that was not what DVP was using at their two newest plants.. and that those plants were not designed for use as quick-ramping but rather base load.

      Oh – and as far as the pipelines go – again – we have existing pipelines that DVP chose to NOT site their new plants on and instead had to build extensions. Why?

      It would have made perfect sense to put new plants on the Transco or Columbia gas lines..

      http://www.vagrowth.com/news/18-latest-news/139-dominion-power-to-build-natural-gas-power-plant-in-greensville-county

  5. I would like to clear up a few misconceptions created by the WaPo article and the report that it refers to.

    First, the study is about what has happened during the past 20-25 years. Both the study and the WaPo article infer that the same type of responses will be needed over the next 20-25 years.

    For the past 100 years the utility industry has met variations in demand with changes in supply. Many utilities are still planning on that same type of response to deal with changes in solar output. The article suggests that the only solution is “fast response fossil” units. The means oil, diesel and natural gas fired peaking units. Even the new faster responding combined cycle units (some of which can ramp up to full power in 10-30 minutes) are too slow to meet this need. In fact, many of the old combustion turbines (peaking units) might be a little too slow to meet the needs of higher solar penetration. New faster responding combustion turbines are under development.

    These new combustion turbines will be an important part of the future grid as we see a higher percentage of solar generation. Maintaining an adequate supply of low cost natural gas will help keep everyone’s bills low when this is our primary response.

    There are two problems with the impressions left by the article. The first is the notion that natural gas is crucial as a “bridge fuel”. There is a huge build-out of natural gas infrastructure, ostensibly in response to the Clean Power Plan. Natural gas fired units, both peakers and combined cycle units will have an important role in our energy systems over the next 25 years. But not an exclusive one. There is no “bridge” required. Today’s price for solar and energy efficiency are already on par with or significantly cheaper than gas-fired units. Overbuilding natural gas capacity (combined cycle units) will leave us at risk to stranded costs as gas prices go up and solar power continues to decline.

    The second issue is that bringing on peakers to adapt to variations in solar is not the cheapest, fastest or cleanest way to match up with solar. Rolling short-term control of space heating and cooling and water heater loads is a much faster, cheaper way to match load with supply. As prices come down, storage will also be superior to peakers because that will not only handle the intermittent variations but can provide voltage support and deal with volt/var variations in ways that save ratepayers money.

    Einstein reminded us that we should not try to solve problems using the same mindset that we used to create them. I believe the BFER study and the WaPo article was telling us to stay rooted in the past. Already too many of our energy decisions are continuing those old traditions for another 40-100 years while better options are readily at hand.

    • Thank you, TomH, excellent response to a subtle issue.

      The problem with any article about the generation of electricity today is that there is so little popular understanding of how the grid works, including by journalists. And anything we say here on BR has to be simplified to make it succinct, at the risk of over-simplifying necessary background.

      The range of types of generation is one of those simplifications. Commonly we refer to base load, cycling, and peaking, although there are no sharp lines there. But there are more subcategories: dispatchable or not, fast startup or long-lead-time startup, better or worse at VAR control, must-run (cannot be shut down except in an emergency), etc. NGCC is complicated even to categorize because it’s really a compound machine: the basic generator is driven by a gas-fired turbine, which has all the flexibility of any fast-cycling unit; but then there’s add-on equipment that extracts heat from the first stage exhaust which is used both to preheat the first stage intake and to drive a separate second stage turbine. The importance of this is, some NGCC units can be quick-started just on the first stage, but do not run very efficiently until all the ancillary stages kick in, which takes a while, at which point they acquire “base load” efficiencies and are run as such.

      Now consider PJM’s role as system operator. PJM suddenly needs to increase generation because a big cloud bank has just rolled over Indiana and Ohio, shutting off isolation over a wide area, offset slightly by a temporary increase in wind. What generation does PJM call for? Its computers map out the demand and the non-dispatchable generation (solar and wind) for the next few hours across all of PJM, then add in the dispatchable generation that’s already running, then recommend units to be added, weighing each unit’s bid run price, bid startup price, likely run time, operating or maintenance limitations if any, and if relevant, the degree to which the unit’s location will ease transmission constraints and save money overall despite the unit’s higher run price. Often, this analysis will recommend fast-start, inefficient peaker units for a short time while more efficient cycling units are brought on-line as quickly as feasible.

      Dominion isn’t making these decisions; DVP is not the system operator. What DVP does is fix an energy market bid price on each of its units that will fairly compensate DVP if any of them are called by PJM to run. Usually that price is near the unit’s marginal operating cost. Fix the price too high and they won’t get called; to low and they will get called when they are not profitable to run; but that decision is DVP’s. Also Dominion’s decision is what new units to build in order to yield maximum profits in the PJM energy market (and in the parallel PJM capacity market).

      What does distributed generation do to all this? Complicates it, yes; but the grid is not going to be rendered obsolete anytime soon. It’s up to DVP to adapt to the evolving PJM markets. Read Dominion’s IRP to see how they are proposing to do that.

      • On re- reading that, I see spell-check wrote “isolation” rather than “insolation.” Also, as TomH pointed out, any discussion of resources available to the grid operator should mention “negative megawatts” or dispatchable demand-side reductions. The increased sophistication and depth of these resources today is astounding, yet there is huge potential for more. Both residential and particularly commercial customers can sign up to sell reductions at the call of the system operator, who will call for load management rather than a generator if the price is right. Most of these customers don’t deal with PJM directly but sign up through load management aggregators, including our local distribution utility (DVP) and a number of third party businesses.

  6. re: bridge fuel

    I’m not fully understanding – “buying” the idea that at some point in the future -we won’t need peaker plants to modulate demand because we’ll be doing things on the demand side to modulate demand.

    unless I misunderstood what was being said.

    Some day – we might have a “grid” that actually regulates actual devices in private structures – homes, businesses, etc but I think that is beyond the lifespan of current gas plants and no one in their right mind is – today – going to oppose building a gas plant because we don’t need to because we’re going to control demand .

    The idea that in houses and businesses the temperature is going to go to 80 on high demand periods because we have no peaker plants on purpose is not going to be an acceptable solution to anyone.

    I just totally doubt that’s where we are headed..

    But even if I’m wrong – we’re a long way from that right now and right now we are building solar and building gas plants and the issue what should we be doing – right now.

    Should we not build solar because we have to wait until utility scale demand side control happens?

    Is that what DVP is going to say? “No more solar until the grid can turn off your air condition when it’s hot as hell and we don’t have enough power to meet demand”?

    Come on… I like innovation and progress as much as anyone but I’m also pragmatic enough to keep optimism within the bounds of reason and logic!

    I’ve mentioned Islands without fossil fuels and horrendous electricity prices -3-4 times what we pay. One would think that those islands would be the prime first adopters of utility control of demand. Has it happened ? Anywhere?

    I think we’re still a long way from that… I don’t even see it mentioned online as anything beyond a concept.

    I will admit that I have in the house right now a box that turns off my water heater in high demand periods but I will never agree to such a box on my air conditioner and furnace no matter what the utility wants. To pass laws that allow the utilities to do this – would be akin to the govt putting mileage GPS devices in cars … it’s just not going to happen.

    • See Acbar’s clarification of what I was attempting to say. My point was that the grid is getting more sophisticated and our options more plentiful. We will not be limited only to the simple tools of the past to deal with load variations. New combustion turbines will be designed to rapidly respond to variations in renewables, and they will be engaged in a choreographed dance with faster ramping combined cycle units and more widespread demand response and load management measures. These technologies are already in use in areas with greater solar penetration and will expand the fastest in areas where they have regulatory and utility support.

      They do not yield the results you portray. The rolling control of heating, air conditioning and water heating devices are for about 15 minute periods and have little effect on household comfort but a big impact on peak usage. And they respond faster than any peaker.

      Of course we will continue to build new peaking units. I never recommended that we should not. What I am trying to portray is a more elegant system where all of these contributions are optimized so that we achieve a more flexible, cleaner and cheaper energy system.

      Out of habit and 20th century regulations we continue to choose the same options that have been used for the past 50-60 years. They have their place but they are not the only choice.

      My point about a “bridge fuel” is a “bridge” is required to get you between where you are and where you want to be. The options that natural gas is supposed to be a bridge to are already here. As you have stated many times, natural gas is a wonderfully flexible and currently low-cost fuel. I agree. We should treat it that way. LNG exports and rapid expansion of combined cycle units will drive gas prices up.

      The next major unit that Dominion is planning is scheduled for 2022. They will need to gain approval for it in the next few years. That means the utility and the SCC will use our current mindset to approve the plant and plan the future. Solar additions are sprinkled throughout the 15 year planning period, with the addition of more peakers to complement them. But the solar is all owned by Dominion and utility scale.

      There is no discussion of energy efficiency. Demand response is discussed every year but it is the same meager response that won’t make a dent in the need to install more peakers. Massachusetts has set a statewide goal of having 30% of their new generation provided by energy efficiency by 2020. Where is Virginia? California and New York have committed to 50% renewables by 2030. Where is Virginia?

      I am not arguing against appropriate use of natural gas. I am suggesting that it should not be our “only” response. Continuing the mindset of the past well into the future will increase our costs and harm Virginia’s economy.

      The best business leaders know that you should not worry about sunk costs when making decisions about the future. It does not work that way with utilities. They always look to recover the costs of their projects whether they were good ideas or not. Investment choices today foreclose other options in the future. Many new technologies are just 5-10 years away from making major contributions to our energy system. What if we decide in 2018-19 to build a new plant in 2022. No one really knows what our supply of affordable natural gas will be. There are forecasts from respected sources all across the spectrum. Dominion is expecting gas prices in 2025 to be 250% higher than current levels. Today energy efficiency is 50 -70% cheaper than combined cycle units and it provides 100% baseload capacity.

      As new technologies such as storage become cost-effective what happens to the capacity factor of those new gas-fired plants that are just a few years old? Certainly the output can be sold to PJM and displace older less efficient units. But other utilities in PJM will be attempting to do the same. Does that mean our choice will be between not investing in cheaper, cleaner technologies or paying stranded costs for installed capacity? That is a poor choice brought on by lack of foresight.

      That is why we need to address these issues now. Much of my time with utilities was spent dealing with projects 15 years in the future. We were constantly striving to find ways to be sure that the decisions we made in the present would still be good in the future. I know Dominion and other utilities are involved in the same process. But my knowledge of utilities is that they tend to project the experience of the past well into the future. They expect load to keep growing and conditions to remain about the same. We are in a time of great transition in our energy system. We have to begin to see in a different way or we will pay a heavy price.

  7. there’s some logic issues here.

    first – we have when solar can be used on the grid – and not

    second – we have periods of high demand that exceed baseload generation – no matter what solar does – at least in any predictable way.

    solar is purely a not very predictable resource. You cannot depend on it to provide peak load help – on this Bacon and I completely agree.

    so solar is, at best, a “harvestable” resource that can be used to supplant other generation IF the grid is configured to be able to do that.

    the only real way that can be done is to be able to use gas as a dynamic complementary resource that can ramp up and ramp down in response to solar varying in it’s input.

    I just don’t see any other way for solar to be efficiently harvested.

    then when we talk about how to deal with peak demand – we seem to say – that we’ll deal with that by demand-side strategies and not gas.

    where does that leave solar if you don’t have the gas?

    you can’t really have dynamic demand side variations that vary not only with regard to peak demand but also solar variation… that would seem to be an exceptionally difficult thing to do – not to mention having rapidly changing demand-side variations… in response …

    I just don’t see solar as ever being a useful fuel without it being used in tandem with gas. And if turbines can’t change fast enough – then when that happens – the solar will be dumped…. we can only harvest the solar that we can accommodate with the ability of technology to quickly enough substitute gas when solar decreases.

    Anything beyond that – that would introduce demand-side juggling in real-time would seem to require a grid that is vastly distributed and is, in fact, a computer network.

    I just don’t see this happening within the current expected life-cycle of the equipment we use today and when we do see it – it will happen first in areas where electricity is already very expensive.

    Remember – right now, today – we are seeing 200 acre solar installations … and unless something changes, we’re probably going to see a lot more of them. How do you accommodate them on the current existing grid?

    So , now, can you guys explain where I’m wrong on my thinking?

    • Solar will be used on the grid whenever it is available. It has zero marginal cost, cheaper than any other source of generation.

      Yes, we will continue to have baseload, intermediate load and peaking (cycling) loads. It is a continuum – not a set boundary between the types. Solar is very useful for intermediate and peak loads because it is cheaper than existing alternatives to meet that same load profile. Fossil fuel peaking units (natural gas, oil, diesel) will be used to balance variations in solar output. Other cleaner, lower costs options will add to the peaking units over the next 10 years. If we don’t have total reliance on gas we can keep its price lower and it will be used whenever it makes the most sense. It will not be either we must have gas peakers or not have solar. Over time there will be a blend of options to deal with variations in solar output.

      You are exactly right. The future grid will be much more interactive and information rich. That is where we need to make significant investments to make it easier to integrate renewables and load management methods.

      We will see more solar installations because they will be cost-competitive choices. They don’t all have to be 200-acre central station installations. Having a significant percentage of the solar be distributed will reduce the variations from intermittent clouds and we will avoid extra costs such as new transmission lines. Either type can be currently accommodated by the grid. There is plenty of existing peaking capacity. As we put hundreds of megawatts of solar into the grid we will need to add more peakers and Dominion already has that in their plan.

  8. re: ” As we put hundreds of megawatts of solar into the grid we will need to add more peakers and Dominion already has that in their plan.”

    baseload is what I perceive to supply the nominal grid demand.

    then when that demand increases – other generation has to be brought online and it won’t be baseload because baseload would take too long and then once peak starts to recede – you can’t dump the baseload fast enough unless you just disconnect the turbines while you burn fuel anyhow.

    That would seem to be the default condition.

    so peaker plants that ramp up and down quicker than baseload would be used to serve peak.

    all of this -without solar.

    the question is – what happens when you add significant solar to the grid and it’s pumping out electricity – that is even in excess of baseload?

    do you just not take the solar when the baseload is enough to satisfy demand?

    so I don’t see solar as useful at those times when your static baseload is adequate… and you just don’t need additional power even if solar is generating…

    so how does this work?

    do you cut your baseload as more and more solar installations are built ?

    And if you do that – what do you do when solar drops it’s contribution? How do you make that deficit up ? It seems like you’d HAVE to use peaker plants or equivalent… fast-ramping combined cycle plants.

    so you do that – you’re running your peaker plants and then the sun shines again and solar starts pumping out electricity but the grid doesn’t need it because the peakers are running… so what do you do just not use that solar?

    or do you take the solar but lower the output of the peakers?

    I just don’t see how you use solar at all – without peakers.

    solar is incompatible with baseload… and only “works” if you have peakers.

    even buying and selling power from PJM won’t fix regional variations …. like Buchannon where that one solar project is enough to power the county – when the sun is 100%. But the question is – how do you supply power to Buchannon when the sun goes behind a cloud – unless you have a peaker near by… otherwise – even if you bought power from PJM – you’d still have to re-route – in real time – the substations … nearby – and perhaps that’s possible.. but multiple that problem by 100 – 200 acre solar spread around the state and you can see a massive problem trying to keep up with a dynamic and, at times, rapidly changing demands …

    Now – TomH says Dominion already has anticipated this and are putting up peakers – are they putting up dozens or multiple dozens around the state? All we hear about are their new combined-cycle plants…

    Finally think about Hampton -and the plans to provide Surry baseload across the James. How does Hampton deal with peak loads? If DVP planning on routing Surry’s baseload according to demand and have it essentially not use it’s available power when it’s not needed? It seems like you’d have to have peaker plants in Hampton to deal with peak loads… and it would seem that if you have to have the peaker plants – it would be also an opportunity for solar in tandem with those peakers….

    You get none of this from VDP when they say they need powerlines across the James. There is no “plan” as to how they intend to operate.

    • Acbar has provided an excellent summary of how the grid works. It is a complex issue and by necessity we can can only discuss it in simple terms in this forum. You seem to want to grasp the concepts so I will attempt to go through it one more time. If I make any gross technical errors in my attempt to simplify, Acbar please bail me out.

      “baseload is what I perceive to supply the nominal grid demand.”

      If you mean the minimum load that exists all day long, then you are correct. The terms baseload, intermediate load and peaking units are general terms that describe where you are on the daily demand curve rather than a particular type of unit.

      A unit might run 24 hours a day (in baseload mode) during the summer and winter. In the spring and fall when demand is less the unit might be dispatched when people begin to start their day and run until they go to bed at night (in intermediate mode).

      “then when that demand increases – other generation has to be brought online and it won’t be baseload because baseload would take too long . . .”

      Whenever demand increases, PJM will bring on the next cheapest unit wherever it exists in the grid. It could be baseload generation. Night time Midwest wind generation often displaces other generation because wind energy is cheaper than other forms such as nuclear, coal and natural gas. If the amount contributed by wind recedes at night, other baseload units will be brought on to make up the difference. The huge size of the 13-state PJM power pool evens out the variations. Besides, large-scale sources of wind energy have peaks and valleys but they do not suddenly stop and start.

      About 5-7 AM the intermediate load period begins and additional units are dispatched in merit order (the next cheapest). For a few hours of the day demand reaches its highest level (the daily peak). In summer and winter, this peak period requires so much extra energy that special units (peaking units) are dispatched to provide the necessary energy. Once the peak subsides, these units are no longer necessary. Other less expensive units continue to serve the intermediate load until people go to bed and the load declines to its baseload state.

      Think of the generating units as transportation vehicles. Tractor-trailers are expensive to build but carry freight at the lowest cost per mile. The most efficient units are on the road 24 hours a day (baseload). The next lowest cost units are dispatched until all the tractor-trailers are on the road. When more freight must be delivered the box trucks come on line. These are less expensive units so it is OK for them to be idle many hours a day. But they are good for delivering a moderate amount of freight at a reasonable cost (intermediate units). But at certain times of the day you really need to get somewhere at a specific time. You don’t pay too much for the vehicle (a car) but it is expensive per mile because you only use it for a little while and not even every day (peaking units).

      “ . . . and then once peak starts to recede – you can’t dump the baseload fast enough unless you just disconnect the turbines while you burn fuel anyhow.”

      As the peak recedes you are not rapidly dumping baseload units. You would be shutting down peakers if they have been used, then shutting down units serving the intermediate load in an orderly way. Baseload units would continue to run throughout the day.

      “what happens when you add significant solar to the grid and it’s pumping out electricity – that is even in excess of baseload?”

      Solar works only when the sun shines. It operates only during the intermediate and peak periods of the day. A common misperception is to say that solar has value only if it is as cheap as the lowest cost source of generation in the system. Solar is primarily offsetting moderate to high cost sources of generation, not the lower cost sources that serve the baseload.

      With higher levels of solar penetration could there be times when there is so much solar generation that it reduces the need for other units to supply some of the baseload capacity? Yes, this is the belly of the “duck curve” that is experienced in California that causes cutbacks in conventional generation that are supplying the baseload.

      “do you just not take the solar when the baseload is enough to satisfy demand?”

      “so I don’t see solar as useful at those times when your static baseload is adequate… and you just don’t need additional power even if solar is generating… “

      PJM always accepts solar capacity when it is available because the cost of generating the next unit of energy from solar is zero. All of the cost for solar is capital cost; none for fuel. So you use solar whenever you can because it is cheaper than any other alternative. With higher levels of solar penetration it can cause units serving the baseload to be cut back. This saves money because solar is cheaper but it reduces the revenues from those conventional units that have been cut back. Depending on the regulatory scheme this can cause utilities problems.

      “do you cut your baseload as more and more solar installations are built ?”

      In Virginia’s case there is so little solar in our local system that solar will only offset intermediate and peak load units. If you are contemplating solar penetration of 30-50% then you need to design the system in a different way. This can be done and is beginning to be done in ways that will be cleaner and less costly. Both New York and California have committed to having 50% renewables by 2030.

      “And if you do that – what do you do when solar drops it’s contribution? How do you make that deficit up ? It seems like you’d HAVE to use peaker plants or equivalent… fast-ramping combined cycle plants.”

      Currently, the main solution is to use fossil-fired units that can ramp up and down quickly (peaking units). In some ways, solar is reducing the need for peakers to handle the peak load. In other ways solar is increasing the need for peakers to handle variations in solar output.

      Soon other methods such as load management and storage will assume the role of some of the peakers because they will respond to variations faster, at lower costs and with less pollution than the old peaking units. Then we will have a variety of solutions to deal with the variability issue.

      “you’re running your peaker plants and then the sun shines again and solar starts pumping out electricity but the grid doesn’t need it because the peakers are running… so what do you do just not use that solar?”

      No. Peakers are very expensive to run. As long as the sun is shining you don’t need the peakers. Peakers in that scenario are needed only to pick up the variations in solar output, if other methods are not available.

      “I just don’t see how you use solar at all – without peakers.”

      You are right you need some way of dealing with the variation in output. Peakers are the solution now. Other methods will be available soon.

      “solar is incompatible with baseload… and only “works” if you have peakers.”

      Solar is very complementary with baseload. In Virginia, the units supplying baseload energy would run 24 hours a day as they normally would. Solar would offset the older, more expensive, less efficient coal, oil and natural gas units that serve the intermediate and peak loads. Some peakers would be needed to handle the variation in solar.

      “otherwise – even if you bought power from PJM – you’d still have to re-route – in real time – the substations … nearby – and perhaps that’s possible.. but multiple that problem by 100 – 200 acre solar spread around the state and you can see a massive problem trying to keep up with a dynamic and, at times, rapidly changing demands …”

      These are not “massive problems”. Grid energy is always supplied by PJM and it has reliably been dealing with variations in load for decades. PJM has said that they could accommodate up to 30% penetration of solar continuing business as usual. Higher penetrations would require a more robust intelligent grid but we are heading in that direction anyway.

      “Dominion already has anticipated this and are putting up peakers – are they putting up dozens or multiple dozens around the state?”

      No need for dozens of units around the state. Just a few are necessary. In fact, they could be three states away. But there are some advantages to having it in the state and advantages to Dominion to own it themselves.

      “It seems like you’d have to have peaker plants in Hampton to deal with peak loads… and it would seem that if you have to have the peaker plants – it would be also an opportunity for solar in tandem with those peakers….”

      From what I understand, the transmission is needed for peak periods. The rest of the time there is sufficient capacity that can be brought into the region. Solar, energy efficiency and some modern peaking units or combined heat and power units could probably eliminate the need for the transmission at a far lower cost. However, I don’t know enough about the situation to say for certain that this would solve the problem.

  9. Thanks for this post. This is the kind of discussion we should be having.

    Virginia generated 2.6% of her electricity with renewables and 13.4% from pumped hydro in 2012. PJM has said that the system can accommodate 30% renewable energy without causing grid issues, leaving us, as you note, a lot of leeway to increase renewable generation without encountering grid issues. My question … Why have we not really begun? Why did the legislature set aside all the changes that would encourage new clean energy without acting on them in the last session? Study after study has shown that policy makes a difference.

    Georgia Tech has just completed a new evaluation of the South, charting a variety of futures with the primary criterion of keeping ‘least cost’ electricity in view, and meeting the Clean Power Plan too. By their calculations, maintaining our “current trajectory would cause the electricity bills of a typical Virginia household to rise by about 19% over the next 15 years.” If, on the other hand, we choose the direction their analysis found … “The average Virginia household could cut its electricity bill in 2030 by $307 (or 12.6%) and could save a total of $2,899 over the next 15 years, representing a cumulative electricity bill savings of $9.9billion.

    Their first recommendation … “Energy efficiency makes the transformation to clean power more affordable to consumers.” Neither the state, nor Dominion, has any substantial plans to incentivize retrofitting our buildings, the primary source of our electricity use. There are lots of ways being used in other parts of the country that are increasing building efficiency spending. It’s not that hard to do and doesn’t have to mean substantial state subsidies.

    In the Georgia Tech future scenarios, emphasizing energy efficiency also avoids a ‘natural gas lock-in’ caused by over building gas infrastructure, and also avoids a “legacy of other missed opportunities.” One opportunity; meeting corporate energy planning choices. Corporations, contrary to the word in Virginia, are not shopping for gas. They are shopping for clean, renewable energy that is increasingly cheaper than conventional alternatives. As members of REBA, the Renewable Energy Buyers Alliance, tech giants, whose appetite for electricity is a key operating expense, and other corporate giants such as Disney, General Motors, Microsoft, Nike, Starbucks and Walmart, have set a goal of facilitating 60 gigawatts (GW) of new corporate renewable energy capacity by 2025. We can’t provide what they are looking for until our rules allow a variety of ownership and financing structures. Long-term contracts, power purchase agreements (PPAs), are the most common way for corporations to purchase their distributed renewable energy. Obtaining a long-term contract is also often the make-or-break requirement for a new wind or solar project to secure financing from investors, giving the project developer, and the corporation purchasing the power, long-term price certainty.

    Solar has a tax benefit connected to it meaning 30% of cost can be written off until the end of this year. In 2017 that credit will be reduced to 10%. 30% has been an important part of making projects financially viable, but for some buyers it can require a lot of financial/ownership restructuring. Our farmers, for instance do not have the profits to benefit from that solar tax deduction, so farm projects would require investor owners to lease farm lands.

    Then there is the issue of selling excess electricity produced. The projects you have discussed have done that by selling all their energy to the grid directly, not to a utility.

    It is clear that Dominion believes it can maintain the old monopoly structure, preferring to be the sole generator of centrally distributed electricity. They have shown that by purchasing the few large-scale solar installations that have managed to find a way through the regulatory road-blocks that still exist in Virginia. Maybe they should not have given up so easily on offshore wind. Our East Coast OWE has some pretty good characteristics, especially when combined with solar capacity. Granted the fledgling industry in the US needs support, but the long-term payoff will be much different than paying for a $5B pipeline that could possibly become a stranded asset in 15 years.

    Turns out that East Coast OWE is a terrific resource for meeting peak demand in winter when solar produces less energy, and works synergistically with solar in the summer. “The sun will peak at noon, offshore wind will peak at 7 p.m. or 8 p.m., and the load peaks at 3 p.m. or 4 p.m. in big cities like New York, Baltimore, and Washington, D.C., so the wind and solar are really complementary. … “the more you put those two technologies on the grid, the bigger the synergy effect.”

    The researchers’ modeling showed, as other modeling has, that there is “almost twice the capacity value with wind and solar than you would get with solar alone at 30 percent penetration. And compared to wind alone, it is huge, maybe five or six times.” (Published online 25 July 2012 in Wiley Online Library (wileyonlinelibrary.com). DOI: 10.1002/we.1524)

    Overall, ECOWE can provide “about one-third of US or all of Florida to Maine electric demand can technically be provided with the use of US East Coast OWE. With the exception of summer, all peak-time demand for Virginia to Maine can be satisfied with OWE in the waters off those states.” (wind Energ. 2013; 16:977–997)

    Isn’t peak power the expensive kind, and if we are using wind and solar to meet peak load, then isn’t the expense of backup a different matter?

    Finally, a certain amount of gas is necessary and gas can work synergetically with wind and solar, but there are other ways to decrease the problems of intermittency. Hydro can also be used, and the Atlantic Wind Connection, the under water connection of wind farms from VA to NY has been designed to minimize the fluctuations of wind. Jumping into offshore wind and not connecting to the AWC would be a huge mistake.
    http://earthsky.org/human-world/willett-kempton-on-interconnected-offshore-wind-farms-to-counteract-lulls-in-wind

    I like the way Tom put it….“Today energy efficiency is 50 -70% cheaper than combined cycle units and it provides 100% baseload capacity.” Let’s insist at least on investments in creating efficient buildings today.

  10. ” PJM has said that the system can accommodate 30% renewable energy without causing grid issues,”

    does anyone know where the 30% came from? why not 20% or 40%? what is it based on?

    and second:

    ” Isn’t peak power the expensive kind, and if we are using wind and solar to meet peak load, then isn’t the expense of backup a different matter?”

    IF you HAVE wind/solar for peak but what if you do not?

    you have to use something else – and that something else has to be able to “turn on” fairly quickly and then to modulate fairly quickly as it “follows” demand and then reduce quickly as demand recedes.

    but that capability is ALSO the VERY reason it can be teamed with solar – because solar also varies – but instead in output.

    trying to use solar alone to “follow” demand would be a disaster as it has no way to “follow” demand and, in fact, it has no way to guarantee it’s own ability to remain online.

    the way that off-grid homes that use solar “work” is that they have no “gotta have” peak loads. If solar is pumping out – they can use that power but if solar is not – they have to turn off equipment or suffer brownouts

    or… have a natural gas or propane backup generator… to step in and maintain meeting that demand.

    NOW….. if you want to talk about a highly distributed load-management grid – what you COULD DO is having natural gas backup generators at each house and that generator is dispatchable by the utility so that when the utility is experiencing peak demands , it can actually turn on those massively distributed backup generators to meet that demand.

    Now, one step more. In those same homes -you could have solar tha could be harvested, when available, to meet demand and those same gas backup generators used for ‘backup’ when/if solar drops.

    okay – now – a final step – instead of each house having a dispatchable natural gas generator – do a gas turbine for that neighborhood – perhaps 200, 500, a 1000 homes – on the grid but supplemented with a local proximity natural gas turbine when that neighborhood starts to demand more than what baseload is providing.

    this is what is going to evolve organically anyhow once solar starts to grow in percent of grid.

    Think about it this way -and this goes back to my original question as to where the 30% threshold came from.

    what does that 30% refer to in scope? all of PJM?

    how about at the neighborhood level? does that same 30% apply?

    or can one neighborhood have 60% solar and another 0% as long as between the two of them the percent is still capped at 30%?

    so how do you actually reach that 30% at the PJM level – on a grid – with millions of homes spread all over creation?

    Can Virginia have 40% as long as Pennsylvania has only 20%?

    so where does that 30% come from ? what is it pertaining to?

    • “does anyone know where the 30% came from? why not 20% or 40%? what is it based on?”

      I believe it came from a PJM study. The 30% is a system wide average. Some areas of the grid could probably accommodate more and some less without needing more investment in the grid.

      “trying to use solar alone to “follow” demand would be a disaster as it has no way to “follow” demand and, in fact, it has no way to guarantee it’s own ability to remain online.”

      True. But you misunderstood my point. What I said was that solar could reduce the need for peakers when the sun is shining, but solar increases the need for peakers to deal with solar variability.

      “the way that off-grid homes that use solar “work” is that they have no “gotta have” peak loads. If solar is pumping out – they can use that power but if solar is not – they have to turn off equipment or suffer brownouts ”

      Off-the-grid homes are only off the grid because they are too isolated for it to be economical to string the distribution lines to connect them to the grid. Or the residents have a particular philosophical position about energy and are willing to pay a premium to be independent from the power company. Whether they use solar, wind or both they have a battery system to store excess daytime generation so that they have power at night.

      Back-up generators are for emergency situations only. They have a delay in startup and can only provide for a fraction of the typical household use. They have crude power conditioning capability that is important for electric motors and especially electronics.

      I think you underestimate the sophistication and value of the grid. A single combustion turbine, combined with the voltage regulation and power conditioning capability of the grid, can smooth out variations from renewables and other sources for tens or hundreds of thousands of customers at a fraction of the cost of in-home batteries or back-up generators. The grid is similar to a computer network (but not yet as intelligent). The value of the individual components is enhanced because of the interconnections.

      Large scale batteries are currently being installed by utilities for balancing loads, voltage regulation and many other valuable functions. Commercial and industrial customers are beginning to install batteries because they can complement solar and also reduce demand charges that make up about half of their bill. All of these technologies will work their into the residential sector, but typically larger scale uses are more economical first.

      “how about at the neighborhood level? does that same 30% apply? ”

      No. There will be differences in local areas throughout the grid. In some areas there will be transmission or distribution congestion that could use a good deal of local distributed generation. Other neighborhoods might have 50-60% residential solar penetration and need grid improvements to deal with large swings of local inflows and outflows.

      Much will be done to improve the resiliency and reliability of the grid in the next 10-20 years. My recommendation is to do that in a way that also accommodates a significant portion of distributed solar, because that will be cleaner and cheaper in the long run. I think Dominion can do that. They have an excellent grid services subsidiary. If they can get regulatory encouragement and payments for doing that from the SCC, we should be in good shape.

  11. Larry … you ssk a lot of good questions.

    First of all, I am not talking about off grid installations.

    Second, think storage at the on-site level, not individual gas generators. Storage is on the way and will get economically viable within the next 5 years, they say. It already is in places where electricity is more expensive than in VA.

    Third, I posted this before Tom’s excellent ‘grid lesson’. I was talking about the “Solar is primarily offsetting moderate to high cost sources of generation, not the lower cost sources that serve the baseload.” Comparing costs to baseload cost is not exactly accurate.

    Tom also says that “If you are contemplating solar penetration of 30-50% then you need to design the system in a different way. This can be done and is beginning to be done in ways that will be cleaner and less costly. Both New York and California have committed to having 50% renewables by 2030.” That says to me that we need to be working on making the grid flexible and more information based. That is where are money should be going … not into pipelines that aren’t needed today and probably won’t be needed 15 years from today.

    I put up the Offshore wind example, not only because it is the central, large scale generation Dominion wants to continue building, but also to show that it is possible to turn isolated installations of either wind or solar into something else … where, by working together, they can make the downtimes much less problematic.

    The 30% figure came out a few years ago … not just Virginia’s? NY is planning for up to 50% they must be accommodating that in their part of the grid. I don’t really know.

  12. what does “PJM can accommodate – up to 30% solar” really mean?

    what are the things that limit PJM from accommodating MORE than 30%… what are the limitations?

    are those limitations things that would also limit smaller regions within PJM – like states, even areas within a State?

    Say for instance – solar on 200 acres in a place like Buchannon with about 8000 homes of which – in theory – that solar could easily power all 8000 of them – during the day.

    Are there limitations to the grid in Buchannon that would limit the amount of solar that that it could handle? Perhaps those limitations are such that it cannot handle 200 acres of solar unless things are done to the grid first?

    So go back to PJM – PJM does not care where the electricity comes from when it arrives on the grid as “available”. It could come from coal or gas or solar and it don’t matter.. right? so what’s the 30% about?

    on the “storage”… “almost here”… I’m a heavy skeptic … I’ll believe it when I see it – and until then natural gas backup generators are here and do the job. the main issue is that the retail price of natural gas at the consumer level is several times in cost what the utilities would pay – even to run one of their peaker plants.

    I strongly suspect a natural gas backup unit would be cheaper than a storage unit but could be convinced otherwise with actual numbers. The storage units are going to be for Telsa type consumers who are early adopters and money is not the issue.

  13. Info on commercial storage…
    “Large commercial customers in 17 U.S. states will have an internal rate of return of 5 percent or higher, which GTM Research identifies as “in the money.” For small/medium-sized systems, 14 states will be economically attractive. Taken together, there will be 19 states primed for commercial storage adoption in 2021. Under GTM Research’s aggressive-cost-reduction case, storage costs are forecasted to fall 15 percent annually over the next five years. In this scenario, there could be as many as 26 states where commercial storage is economically attractive by 2021.”
    http://www.greentechmedia.com/articles/read/commercial-energy-storage-economics-will-be-attractive-in-19-us-state-marke

    And here is info on a variety of combos … micro grids etc
    http://www.utilitydive.com/news/how-storage-can-help-solve-the-distributed-energy-death-spiral/421160/

    and then there are car batteries … old or in use
    http://www.greentechmedia.com/articles/read/bmw-is-turning-used-i3-batteries-into-home-energy-storage-units

    RMI has info on using car batteries as storage …

  14. well the operative word phrase in it’s entirety : ” Commercial Energy Storage Economics Will Be Attractive in 19 US State Markets by 2021″

    I remain a skeptic.

    If that kind of storage was here now – many homes and certainly most islands could convert to solar and live through the night with what Solar generated during the day – and the utility centralized grid model in serious financial jeopardy.

    I think 2021 is close enough that I AM amazed that DVP seems to have no plan for that future and instead is doubling and tripling down on – gas-generated baseload … and no obvious strategy for accommodating solar , much less solar with storage.

    If storage was really on the cusp of reality -I KNOW that PJM would recognize it … and right now – they do not – they still have that 30% cap on solar…right?

    I think we don’t understand as much as we should – if we do not understand what that 30% number represents. we should work on that.

    • “I KNOW that PJM would recognize it … and right now – they do not – they still have that 30% cap on solar…right?”

      Over 280 MW of storage are expected to be installed in the U.S. in 2016, mostly for non-residential and utility use. PJM has been one of the leaders in this area. Commercial and industrial customers can use storage to complement solar and reduce demand charges that make up about half of their bill. In 2021, 2,081 MW of storage is expected to be installed. By that time the residential market is expected to be larger than the non-residential market. Utilities will continue to install the largest share of storage.

      PJM does not have a “cap” on solar. We have to be careful with our language. The study said the existing system can accommodate 30% renewable penetration without major modifications. Above that level improvements would be needed in portions of the grid to maintain the high standards of service. This is not a limit on solar. It is a notice that additional investments will be required to maintain a high standard of service when greater than 30% percent of renewable sources exist on the grid.

      New York and California have goals for 50% renewable penetration by 2030. They will have figured out the technology and designs needed to deal with this long before Virginia or PJM has any great concerns. This is a bit unfortunate because it means that the innovative new companies, the high-paying jobs, and the investment dollars will go to New York and California, while Virginia will be on the tail of the dog.

      • re: not a limit – agree.

        but still questions on scope especially when states and regions are planning on MORE than 30%.

        If that happens – does that mean the other states percent has to be lower to counter-balance?

  15. I remembered the 30%as coming from PJM and looked it up … Here is a reference to the study
    http://www.pjm.com/committees-and-groups/subcommittees/irs/pris.aspx

    • Thanks.. the report furthers knowledge… significantly:

      ” Ten scenarios were chosen, ranging from a business-as-usual reference case with wind and solar resources at 2011 levels, to a scenario with 30-percent of energy over a year provided by wind and solar resources. ”

      so they’re looking at a scenario where there is a 30% gain of renewables in one year – how that would impact ….

      The study’s main conclusion is that the PJM system, with adequate transmission expansion (up to $13.7 billion) and additional regulation reserves (up to an additional 1,500 MW), would not have any significant reliability issues operating with up to 30 percent of its energy (as distinct from capacity) provided by wind and solar generation. ”

      and

      ” Determining Reserve Requirements – It is recommended that PJM develop a method to determine reserve requirements based on forecasted levels of wind and solar production.”

      just reading through it – it strikes me as a seat-of-the-pants perspective because their recommendations have seemingly big scope open questions to be answered.

      and somewhere in their words – they expect each utility to take the lead necessary to maintain system reliability … in their own regions…

      so back to my Buckingham question. 200 acres of solar – almost 20 mwatts – that’s enough for 10,000 houses.. Buckingham has about 8000. One presumes that solar project is going to have a big impact on the grid in that location… if the grid is currently delivering less than 20 mwatts…

      what happens if a second 3rd party in the same county wants to put another 200 acre project?

      see – what I’m getting at is that 30% at the PJM level is not the same as 30% – everywhere in the PJM region and in fact, some places may have huge percentages of solar so what exactly is PJM thinking of when it sets a 30% threshold?

      are they merely stating that the PJM grid can accommodate a 30% increase in available power and it just happens to come from solar?

      would that 30% number be the same if VDP – was planning on adding 30% more gas/nuke generation?

      So I’m still not sure exactly what the meaning of the 30% is other than a rough estimate that they could handle a 30% increase of power generation on the inter-connections – – regardless of source.

      it doesn’t mean that if Va was going to generate 30% overall – that if 80% was in and around Buckingham that Dominion wouldn’t have issues… of it’s own on in-state interconnections.

      So – the 200 acre solar probably has nothing to do with anything specific to Buchannon – it’s just electricity feeding into the grid – when and if VDP can take it.

      Do they HAVE to take it – all of it – all the time it’s generating or can they not take it if they don’t need it or is it PJM taking it?

  16. and the problems with storage and not solved.

    1. – if storage was truly mature – we’d have cell phones that lasted a week and not a day –

    2. – Any cost that you put on top of solar -makes “solar” more expensive ….

    3. they’re not going to be buying storage just so they can capture their solar – unless doing that is going to be cheaper than buying electricity from the grid.

    4. – they’re not going to buy storage (increase their own costs) – so they can “help” the utility accommodate more solar on the grid.

    I just don’t think the storage advocates are thinking this through much less making any kind of compelling case for it’s adoption.

    all these issues – external to the grid – are going to be compared cost-wise – to what the cost of electricity from the grid will be.

    Where would grid costs be so expensive that one could justify storage? On any major island that currently generates power from fuel oil at a cost of 35 cents and up per KWH. Those are the places where on-site storage is going to be adopted first… because that storage could probably pay for itself very quickly – a no brainer type purchase.

    until we see this – I think “storage” is in the category of “cold fusion”. it’s the holy grail of energy but it has been forever in “coming soon”.

    • “Where would grid costs be so expensive that one could justify storage?”

      As we have discussed several times, Kaua’i is installing 52 MWh of batteries to offset conventional generation in the evening. You are correct to say that this is because the cost of the conventional generation is so high (the rates are about $0.35 /kWh not the cost of generation). Currently, 95% of their daytime generation is provided by solar.

      “until we see this – I think “storage” is in the category of “cold fusion”. it’s the holy grail of energy but it has been forever in “coming soon”.”

      I think you are misreading the data. Batteries have been used for years in utility applications and have increased significantly in the last 5 years to hundreds of megawatts installed per year. Annual storage installations will increase nearly 10-fold (to 2000 MW per year) within five years.

      I can assure you that business executives and utility manages would not be making these investments if they were not reliable and have economic value. Storage is in the “early adopter” phase and residential use will trail business applications at least for the next several years.

      Using storage just for voltage regulation can justify its use. When voltage is kept stable slightly above the necessary service level, less generation is needed to meet the same customer load. This saves money and can payback the investment in storage. But storage can provide many other advantages too. Its widespread adoption (where it is economic) will revolutionize how the grid is managed.

  17. Here is the basis of my thoughts on storage … Cold fusion time frame does not apply!

    First .. a list from Sunverge of what their new storage systems can do….
    ◦ Back-up power mode: Automatically isolates from the grid in the event of a loss of grid power then delivers power to the site with no interruption in service or loss in power.
    ◦ PV self-consumption mode: Automatically manages home energy to maximize the value of solar installation while maintaining connection to the grid for reliability and consumer savings.
    ◦ PV self-consumption with grid leveling mode: A variation of PV self-consumption that maximizes the value of solar installation while simultaneously smoothing imported and exported flows of energy to and from the grid.
    ◦ Time-of-use bill optimization mode: Automatically optimizes energy use around a defined time-of-use-rate tariff for the financial benefit of the consumer.
    ◦ Grid non-export mode: Modifies system behavior to account for non-export interconnection requirements, balancing home load, required solar and excess solar in real time. The system has the controls in place to automatically turn “off” PV when storage is full and the home is fully powered, a feature which allows consumers in Hawaii to take advantage of tariffs recently enacted by the state public utility commission (PUC).
    ◦ Peak shifting mode: Shifts the site or fleet peak load to an earlier or later time to better match the grid side energy capacity and constraints of the distribution network. Reduces peak load at an individual end-user site or across the grid, with additional controls available to shape aggregate loads to meet the specific needs of the grid.

    Second … My primary takeaway from the Lazard paper is that, while there are different technologies there are also a large variety of uses and each use case is different. There are lots of reasons to use storage … and that costs will come down as the technology and an increase in manufacturing scale brings them down. Lazard believes reductions will be fairly substantial over the next 5 years and I think expecting costs to drop in this case is reasonable.
    “L A Z A R D ‘ S L E V E L I Z E D C O S T O F S T O R A G E A N A L Y S I S — V E R S I O N 1 . 0”

    Third … Where this increased flexibility is being developed from ABB. CA is using storage differently than New England where they are most worried about hurricanes and such. FERC is now looking into what the effects of storage will have, and the California PUC has declared “Energy storage has the potential to transform how the California electric system is conceived, designed, and operated,”
    http://www.abb.com/smartgrids “Energy Storage: Moving toward Commercialization”

    Looks like storage is slated for a very big role in our clean energy system and that won’t be too far away, just maybe not in VA.

  18. Until I see it actually in use – somewhere – such that, combined with solar -it’s cheaper than buying grid power – I’m going to retain my skepticism.

    It’s not that I don’t believe it will ever come to be – it will – but I put it in the same category as passive shutdown Nukes… it’s a ways down the road – .. I’ll cheer when I see it actually in use.

    Hint – when GE starts producing these things – and islands are falling over over themselves to get them installed -we’ll know they are “here”.

    until then -all of us who support Solar have to deal with realities if we actually want more adopted and that means using gas to modulate -until we see “real” storage actually in use…

    otherwise – we just get put into “those crazy greenies” box…

    we have to be pragmatic and advocate for things that really work.

    • You are entitled to your skepticism. But in the meantime conservative utilities and other industries have been installing these devices for several years and will be to an even greater degree in the future. These are not “crazy greenies”. They are demanding executives who decide to install something only if it makes economic sense. You have been shown evidence that islands are installing these devices. The technology “really works” today, if it did not cautious business executives would not be investing in it. It will continue to get cheaper in the future. Peakers will still have a role, but many new technologies will soon provide better solutions than inefficient fossil-fired combustion turbines.

      I think you are limiting your definition of “real storage” to a residential battery and solar combination. That is one of the possible uses, but not the one that makes the most sense at this time.

      For commercial and industrial companies, they can use storage for load shifting to reduce demand charges and also for solar storage to further reduce peak energy charges – all in a way that can be manged by a third-party. They maintain their operations and save money with no additional effort.

  19. Crazy Greenie, huh?

    Well, here is my 4th and last try at your enlightenment!
    * 25 % of Fortune 500 companies are looking at this. Isn’t that good enough for you?
    * Storage can “eliminate gas peaker plants” and you can install storage in places where you can’t install a new peaker plants … in cities where the grid is congested!

    Here is a Bloomburg reporter questioning a salesman at STEM. Good and thorough stuff
    http://www.bloomberg.com/news/videos/2016-04-05/battery-market-comes-of-age

  20. Is it here right now and being installed?

    or is it that folks are just “looking at it”?

    you gotta deal with the current reality even if you fervently believe in future innovation.

    I’m all for it but I’m not willing to be marginalized by those that point out when I say storage is here now – and it’s not.

    until storage is here – and actually available, affordable and a real component of solar – we have to acknowledge that by itself is not going to gain much traction because those that claim it’s unreliable will be correct.

    the only way you can actually use solar is if you have answer to what to do when solar is not available.

    storage will not fix that for anyone other than those that actually have solar – and even that’s not true if storage is not here and is hoped to be by 2020…

    we need to be advocating real technologies that actually exist right now and to admit when something is not here right now.

    the only folks that use lead-acid batteries for the most part are those that are off grid or in locations where electricity is so expensive that they use solar instead – when they can.

    In order to be able to start up and run an air conditioner or a 1200 watt microwave or similar – you need a substantial bank of batteries…to go with the solar panels – tens of thousands of dollars worth.

    How much grid electricity could you buy for that?

    years worth?

    at some point – storage will come of age.. but until it does what do we advocate for – right now?

    Can you show me – right now – a major solar installation that is using storage? convince me.

  21. I’m sorry, this is the last time that I can go around on this. There are countless articles about the amount of storage that has been installed over the past several years. Many other articles show how rapidly the installations will increase as the price comes down. That does not mean that storage makes sense in every application. Currently, large-scale commercial, industrial and utility applications are the most likely uses.

    I have mentioned at least a half a dozen times on posts that you have made comments on that Kaua’i Island Utility Co-op is installing 52 MWh of batteries to store energy from their utility scale solar panels for use to meet demand after dark. Many other utilities and businesses have already installed storage for its various benefits, some of which include storing excess solar generation for use at an advantageous time. You keep asking for an island somewhere to show you that solar and/or batteries make sense. Well, there it is. You can see pictures of it in many articles. The battery system is under development. Obviously, the high rates justify its use on Kaua’i. It won’t make economic sense yet in other locations until the price declines further. But you wanted proof of the technology. I know some of the people making this happen on Kaua’i.

    These investments are being made right now by serious business people because the technology is reliable and makes economic sense.

    If the only proof that you will accept for the current viability of storage is the economic payback of a Tesla Powerwall for off-the-grid applications, then there is nothing more that I can say.

    The technology and its purchasers speak for themselves. I was only reporting the present situation not being an unrealistic advocate.

  22. I found the article and it says this in Feb of this year:

    ” It is hoped the solar farm and storage capacity will help KIUC further reduce fossil fuel use. SolarCity said it would charge the utility 14.5 cents per kilowatt-hour for power from the batteries in a 20-year arrangement. News of the solar storage deal was reported in September 2015.

    This project awaits approval from the state’s regulator, the Public Utilities’ Commission. SolarCity and KIUC asked last year for permission to accelerate development, so that it could begin by April this year, when existing ITC (investment tax credit) rates were due to drop.”

    is this project actually installed and working right now?

    here’s what I find on a search:

    SolarCity To Deploy Tesla Energy Batteries For 52 … –

    SolarCity’s Kaua’i solar plus storage project to use Tesla batteries:

    – SolarCity’s Kaua’i solar plus storage project to use Tesla batteries.

    SolarCity unveils smart energy home system in Hawaii 26.02.2016 …
    SolarCity and Tesla Package First Solar-Storage PPA To Deliver

    SolarCity and Tesla have introduced the solar-storage PPA at an

    SolarCity to Use Tesla batteries for Project in Hawaii – Fortune

    The project will be built on the island of Kaua’i for the local utility Kaua’i …

    SolarCity To Deploy Tesla Energy Batteries For 52 MWh … – PlanetSave

    To this point – I do not see it deployed but if you have a link I will certainly acknowledge it.

    The bigger point here is that this is cutting edge , first adopters – and more a pilot than something in the process of being upgrade across most of Hawaii.

    you may also notice this: ” Thirty-seven percent of electricity generated on Kaua’i will come from solar, hydro and biomass power generation in 2016, according to KIUC, the only member-owned electric utility in Hawai’i.”

    where does the other 63% come from ? diesel generation, right?

    again – I’m on board with this but until it’s evolved further and is much more widespread on other islands in the world -AND can deliver competitively-priced power in places that are not limited expensive diesel – it’s years away in places like Virginia …

    it’s not going to be cost-effective in places where electricity costs about 1/2 of what it costs in places that use diesel generators.

    This is the reality right now and it’s this reality that we have to acknowledge when we advocate solar in Virginia.

    we have to have an advocacy for solar that is realistic and has some real chance of being adopted – right now.

    I do not think advocating for something that is still in it’s infancy and not cost-effective is something that should be advocated because it gives the opponents a lot of ammunition to “prove” that the pro-solar folks are loony and not connected to realities.

    we make progress when we advocate solar that the opponents have no way to marginalize as not realistic.

    so folks that want to use solar -have to be responsible in their advocacy or it will be undermined and end up being rejected for “cause”.

    right now -solar has to be meshed with gas. that’s just a simple reality. In 10, 20 years, when advocates can point to 50, 100, 500 island that use it – rather than one that “will” – we succeed.

    I want to see Solar – succeed and am willing to make the compromises necessary to see it adopted even if not as fully as I’d like to see. I’d rather see that -than to see folks advocate for something not really real and have opponents set it back -for years.

    that’s my view. I don’t think I’m saying anything not true here but rather trying to confront the realities… in a way where we don’t promise more than can be delivered -so we can actually go forward with one does work – right now.

    we can agree to disagree.. I respect other positions but I am pragmatic at heart on most everything. Embrace the future but don’t wait for it — live with what you must -today. Time is the antidote.

  23. this is significant also:

    ” It is hoped the solar farm and storage capacity will help KIUC further reduce fossil fuel use. SolarCity said it would charge the utility 14.5 cents per kilowatt-hour for power from the batteries in a 20-year arrangement. ”

    does this mean that the utility is providing power at it’s cost to the batteries -to start with “free” -including the fact that only 37% of that power is coming from solar while the other 63% is coming from diesel at a cost of 35 cents per KWH?

    someone at some point in the chain will have to pay the costs of generating the power that will be stored.

    so night time solar will cost even more than if it were just diesel generated as it is now? how does that make economic sense?

    in a nutshell – does 37% solar-generated power + 63% diesel generated power + the storage costs – cost less than 100% diesel-generated power -alone?

    when you calculate those costs -and compare them to the cost for power in Va…using gas instead of diesel , the cost per KWH for storage battery electricity would be even worse! those kinds of economics would be a disaster for solar!

    No one who really wants to see SOLAR in Va NOW ought to advocate for storage electricity that will cost much MORE than what the grid cost would be – and expect to win over converts… with numbers like that!

    why would people who really want to see solar go forward try to do it on that basis ? it’s a recipe for losing – big!

    The opponents of SOLAR, WILL use this to eviscerate solar economically and to marginalize its supporters as loons; to demonstrate to ratepayers just how unrealistic solar really is and convince the public that incorporating even plain vanilla solar backed up by natural gas, into the grid is not good either.

    You see that right now in BR where the commentary says that solar is not reliable and too expensive..

    I want to see solar go forward now – and if it can only do that – mated with Gas – so be it. That’s better than having the whole solar case damaged so badly that the public agrees with the opponents and solar is rejected.

    • If you read the articles carefully you will see that KIUC has a power purchase agreement with SolarCity for solar power and this solar/battery “virtual power plant”. As a co-op, KIUC cannot take advantage of the investment tax credit so it has arranged to purchase power through SolarCity from the batteries at 14.5 cents per kWh. This includes the cost of the solar generation. This is cheaper than the cost of generation from its other sources (diesel generators and a naphtha fueled combined cycle plant). Otherwise, the owners of the utility would not have authorized the project.

      KIUC can generate up to 95% of their daytime use with solar, but their peak is at night. The hotel, restaurant and business usage remains high and people are coming home and increasing residential usage. Their peak is maybe from 7-10 PM. Hawaii is in the tropics so summertime day length is much shorter than here. They are using the battery system to capture daytime solar to meet the evening peak. They are doing it at a lower cost than the fossil alternatives.

      I don’t know if it is completely installed. I am sure they started as soon as they received all of the regulatory approvals. Most people do not realize how expensive it is to do construction projects there. Materials must be shipped thousands of miles over the sea to the port in Honolulu, offloaded , then shipped another 150 miles to Kaua’i and unloaded again. Ten years ago bananas sold for $1.19 per pound in the grocery stores even though they we had some growing next to our house.

      You are making incorrect assumptions about how these systems are used and are assuming scenarios that attempt to prove that investors in these projects are making bad choices. Consider that they know more about their particular situation than we do and that their investments in storage makes economic sense for a variety of reasons.

      Remember where we started this discussion. The article is about natural gas being required for increased development of solar. My comment was that this is the current situation but several new methods are being developed that are now being used in a small way, but will make a much larger contribution to the grid and managing variations in solar output as their costs come down and the cost of natural gas goes up.

      You asked for real-world examples, they were provided, but you found them unacceptable because they did not fit your criteria. This is exactly the point of view of Virginia utilities and policymakers in choosing to stay with the habits of the past.

      My suggestion is for us to stay abreast of developments in the energy industry and test their value in our particular situation. If we make a blanket statement that solar can exist only with gas peakers we will miss out on adopting cleaner, cheaper and more flexible technologies in appropriate situations.

      Extreme proponents and opponents of these technologies will continue to mis-characterize the situation. We can only hope that there are enough open minds to examine the facts objectively to chart our path forward.

      I hope you can accept the evidence that storage is being used today in many applications that make economic sense. They will be considered for more situations as their costs come down and the price of natural gas increases over the next 5-10 years. Both of these price trends have widespread acceptance.

      Here are headlines from just one source for one day (yesterday):

      1. Australia developer moves ahead with 5 MW solar and storage virtual power plant

      The virtual power plant model—centralized control of dispatachable distributed resources—is being considered as a strategy to support Australia’s grid issues and AGL’s project could help pave the way for regulatory changes to enable more of the projects, and could cement a trend of VPPs entering energy markets as more renewables come online.

      The approach aims to ease local network constraints and displace gas power during times of peak demand.

      2. GSA to request information on deploying storage in federal government buildings

      • The General Services Administration, an independent agency which helps manage the U.S. government, is preparing an energy storage request for information that could be the first step in bring more efficient energy use and load management to more than 10,000 buildings under its control.

      3. Stem secures $100M in financing to fuel battery deployment

      Stem, which started using its project financing model for energy storage in in 2013, says it has been used at more than 450 commercial facilities across the U.S. for companies such as Safeway, Wells Fargo and Adobe.

      “This financing vehicle gives our customers access to capital and allows them to achieve the benefits of intelligent energy storage without making a major investment,” John Carrington, CEO of Stem, said in a statement.

      4. Blackouts looming, California speeds battery deployment after Aliso Canyon gas leak

      If there is a silver lining to California’s massive Aliso Canyon methane leak, it could be for energy storage projects.

      The project is a demonstration of the “rapid procurement potential” of energy storage, said Matt Roberts, executive director of the Energy Storage Association. It also shows that given the right mix of policies and circumstances, batteries can serve major bulk power system needs typically reserved for traditional power plants.

      Realizing that the short supply of stored gas could put the region at risk of blackouts, utilities and regulators mobilized to reduce energy usage. In May the California’s Public Utilities Commission (PUC) issued a directive freeing up utility funds that could be used to increase energy efficiency programs.

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