by Thomas Hadwin
Editor’s note: Tom Hadwin submitted this article before Dominion and Appalachian Power filed Integrated Resource Plans Monday detailing forecasts of dramatically higher solar energy generation over the next 15 to 25 years.
According to a recent article in Utility Dive, U.S. electric utility concerns about integrating higher levels of renewables into the grid are declining.
Utility Dive surveyed more than 600 utility professionals in their fourth-annual State of the Electric Utility (SEU) survey. More than 80% of the respondents expect renewable energy resources to increase moderately or significantly over the next ten years in their service territories.
The lower costs of renewables and natural gas compared to other conventional generating sources are driving the trend to greater acceptance. PJM Interconnection Vice President, Mike Bryson, agrees that the very low price of natural gas and the declining price of renewable energy cause these sources to be favored over new coal and nuclear generation.
Survey respondents agree, with 62% expecting moderate or significant growth in natural gas generation, while 72% predict at least moderate coal retirements in the upcoming decade.
Southeastern states are less enthusiastic about the prospects for growth in wind resources. A majority (58%) of those responding from Southern states did not expect growth in wind generation, which might be due to the lower-than-average wind resource in the region. Advances in advanced turbine technologies might yield prices competitive with natural gas generation in the Southeast by 2025. In other parts of the country, especially the Great Plains, wind generation is often the lowest cost source of electricity today.
Texas is currently the nation’s leading wind generator with 18 GW of nameplate wind generation, with plans to add 14.5 GW more wind generation and 27 GW of solar by 2031 without any statewide Renewable Portfolio Standard. Economics are the driving force.
Utilities expect smaller scale solar will grow even faster than utility-scale facilities with 83% forecasting at least some level of growth in distributed generation solar units. This rapid build-out of solar will require other complementary technologies. Nearly 80% of the utility respondents expect moderate or significant growth in distributed and grid-scale storage units, while 81% predict more grid communication technologies and smart inverters will be required to ease grid integration of additional solar.
In last year’s survey, grid integration issues were the top concern, reported by 32% of respondents. This year, half of that number (16%), said grid integration of renewables was the most pressing problem. Instead, 35% of the utility officials indicated that since the election regulatory and market uncertainty are now the greatest concerns.
Few respondents reported concerns about transmission constraints, stranded assets, or having adequate flexible generation to cover variations in renewable output, which are issues often associated with renewable growth.
This might be due to the recent development of affordable and effective grid integration measures. A National Renewable Energy Laboratory (NREL) study confirms that higher levels of renewable energy will not disrupt system reliability. The study showed that the Eastern Interconnection, the world’s biggest power system, of which PJM is a part, can reliably add ten times more renewable generation than exists today.
Renewables then would comprise about 30% of the system capacity. The remainder would be gas, coal, nuclear, hydro and other types of generation that would provide dispatchable power to cover the variations in the output from renewable sources.
Batteries are not yet cheap enough to make solar plus battery combinations competitive with natural gas-fired combined cycle plants for base-load use. But solar plus batteries is currently cheaper than the more expensive peaking units in some regions. The batteries respond more rapidly to load fluctuations than do existing peaking units. Expected ongoing price declines will make their use more widespread.
Utility officials reported many reasons to invest in renewables and distributed energy resources. Customer demand for clean energy, sustainability and compliance with renewable portfolio standards were the three factors mentioned the most.
Major corporations are leading the campaign for cleaner energy. According to an Advanced Energy Economy report, 71 of the Fortune 100 companies have sustainability targets, and are looking to expand in regions that have easy and affordable access to renewable energy sources. According to the Rocky Mountain Institute, 8 GW of renewables are now on the grid because of corporate demand. Customers want more clean energy, they say.
Consumer demand was a driving factor for electric co-ops; 38% of whom chose that option. Investor owned utilities (18%) and municipal-owned utilities (23%) with large commercial customers selected sustainability goals as the main reason they were expanding renewables, as did utilities in New England, the Mid-Atlantic and the West Coast “where environmentalism is prominent,” the survey notes.
The survey projects that utility support for renewables is likely to strengthen. “Besides satisfying consumer sentiment for clean energy, these resources offer predictable purchase prices and are valuable hedges against fluctuations in natural gas prices,” reports the survey.
Innovative utilities are using renewables to gain a competitive advantage for themselves and the state within which they are located. Recently, Omaha Public Power District created a new renewable energy tariff devised to lure tech companies to their service territory in Nebraska. Up to now, many utilities adopted renewables to satisfy Renewable Portfolio Standards or other mandates.
“But over the past decade,” according to the survey, “as the cost of wind and solar have dropped, utilities have started to see them as opportunities, rather than obligations.”
Thomas Hadwin, a Waynesboro resident, formerly worked for electric & gas utilities in Michigan and New York.There are currently no comments highlighted.