Integrating Wind Power into the Electric Power System

1
Integrating Wind Power into the Electric Power
System
Ed DeMeo Renewable Energy Consulting Services,
Inc. Technical Advisor, Utility Wind Integration
Group
Michael Milligan National Renewable Energy
Laboratory Consultant, National Wind Technology
Center
Michigan Public Service Commission Wind
Forum April 25, 2007
Lansing, Michigan
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Overview

• Integration Issues and Wind Economics
• Electric Utility Planning and Operations Wind
  Impacts Overview
• Wind Integration Perspective from Around the
  Nation
• Environmental Issues Impact on Wind Economics
  and Integration

DeMeo Milligan Milligan DeMeo DeMeo
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Key Integration Issues

• Costs (capital, energy, OM)
• Variability Impacts (ancillary services costs)
• Energy (fuel displacement) and Capacity (serving
  demand growth) Contributions
• Environmental Considerations

4
Wind Energy Cost Trend
1979 40 cents/kWh
2000 4 - 6 cents/kWh (no subsidy)

• Increased Turbine Size
• RD Advances
• Manufacturing Improvements
• Operating Experience

NSP 107 MW Lake Benton wind farm 4 cents/kWh
(unsubsidized)
2004 3 - 5 cents/kWh (no subsidy) Today
Somewhat higher increased commodity costs
unstable market conditions
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Natural Gas Situation

• Todays tight natural gas markets have been a
  long time in coming, and distant futures prices
  suggest that we are not apt to return to earlier
  periods of relative abundance and low prices
  anytime soon.
• Alan Greenspan, Federal Reserve Chairman,
  Testimony at Senate hearing, July 10, 2003

Wellhead gas costs - 2002-2003 3 -
5/MMBTU Current prices and projections exceed
6/MMBTU
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Cost Comparison

• Wind total capital cost about 1,600 kW today
• Wind energy cost about 5.5/kWh (6.5 without
  PTC)
• Includes 0.5 to 1.0/kWh for OM
• Wind energy costs are stable over plant lifetime

Natural-gas plant fuel cost (HR 7,000 - 10,000)
/MMBTU 2 4 6 8 10
gas cost /kWh 1.4 - 2 2.8 - 4
4.2 - 6 5.6 - 8 7.0 - 10 fuel only

• Wind-gas synergy save gas when wind blows burn
  gas to maintain system reliability during low
  winds

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Wind Variability Impacts

• To what extent is wind energy value reduced by
  increased operating costs for the rest of the
  power system?
• How is the power systems ability to reliably
  meet load demands affected by wind-plant output
  uncertainties?

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Time Frames of Wind Impact Match System Operation
Tasks/cycles

• Power systems can already handle tremendous
  variability
• Capacity value (planning) based on reliability
  metric (ELCCeffective load carrying capability)
• Scheduling and commitment of generating units --
  hours to several days -- wind forecasting
  capability?
• Load-following -- tens of minutes to a few hours
  -- demand follows predictable patterns, wind less
  so
• Regulation -- seconds to a few minutes -- similar
  to variations in customer demand

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Where Does Wind Data Come From?
Minnesota Xcel

• Meso-scale meteorological modeling that can
  re-create the weather at any space and time
• Model is run for the period of study and must
  match load time period
• Wind plant output simulation and fit to actual
  production of existing plants

Colorado Xcel
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How is Regulation Impact Calculated?

• Based on actual high-frequency (fast) system load
  data and wind data
• If wind data not available, use NREL
  high-resolution wind production data
  characteristics
• Impact of the wind variability is then compared
  to the load variability
• Regulation cost impact of wind is based on
  physical impact and appropriate cost of
  regulation (market or internally provided)

• Realistic calculation of wind plant output
  (linear scaling from single anemometer is
  incorrect)

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How is Load Following Impact Calculated?

• Based on actual system load data
• and wind data from same time period
• Meteorological simulation to capture realistic
  wind profile, typically 10-minute periods and
  multiple simulated/actual measurement towers
• Realistic calculation of wind plant output
  (linear scaling from single anemometer is
  incorrect)
• Wind variability added to existing system
  variability

Implies no one-one backup for wind
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How is Unit Commitment Impact Calculated?

• Requires a realistic system simulation for at
  least one year (more is better)
• Compare system costs with and without wind
• Use load and wind forecasts in the simulation
• Separate the impacts of variability from the
  impacts of uncertainty

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How is Capacity Value Calculated?

• Uses similar data set as unit commitment modeling
• Generation capacities, forced outage data
• Hourly time-synchronized wind profile(s)
• Several years of data preferred
• Reliability model used to assess ELCC
• Wind capacity value is the increased load that
  wind can support at the same annual reliability
  as the no-wind case

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High-Penetration Cases

• Minnesota PUC 15-25 wind penetration (based on
  energy) (TRC)
• California Intermittency Analysis Project
  (Follow-on to earlier RPS Integration Study team
  participation)
• Pacific Northwest NW Wind Integration Action
  Plan (and Forum)
• Idaho Power about 30 (peak) (no TRC)
• Avista 30 peak (no TRC) some informal review
  at Utility Wind Integration Group (UWIG)
• BPA analytical work in progress integration
  cost is consistent with others
• Potential follow-on work to the NW Wind
  Integration Action Plan (NWIAP) on regional basis
• Northwest Wind Integration Action Plan
  http//www.nwcouncil.org/energy/Wind/Default.asp

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Renewable Energy Studies in CA

• RPS Integration Cost Analysis NREL, ORNL,
  Dynamic Design Engineering, California Wind
  Energy Collaborative for the CA Energy Commission
• Used actual renewable generation, load, and
  conventional data from ISO Power Information
  database
• GE/Exeter/Davis Intermittency Analysis Project
  for the Energy Commission
• Analysis of future scenarios of renewable energy
• Both analyses looked at wind, solar, geothermal,
  and biomass

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CA RPS Integration Cost Project

• Examining impacts of existing installed
  renewables (wind 4 on a capacity basis)
• Calculated regulation, load following impacts of
  all renewables
• Capacity value (effective load carrying
  capability, ELCC) for all renewables
• Regulation cost for wind 0.46/MWh
• Load following minimal impact
• Wind capacity credit 23-25 of benchmark gas unit

http//www.energy.ca.gov/reports/reports_500.html
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Regulation and Capacity Value RPS Integration
Study
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California Intermittent Analysis Project

• Up to 24 wind (rated capacity to peak)
• Savings
• WECC nearly 2B
• CA 760M
• Wind forecast benefit 4.37/MWh
• Regulation cost up to 0.67/MWh
• Unit commitment w/forecast results in sufficient
  load following capability (and no load following
  cost)

• http//www.energy.ca.gov/pier/notices/

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Load Following Impacts in CA

• RPS Integration Cost Analysis found little
  discernable impact
• Deep dispatch stack provided by market
• IAP found similar result
• Deep CA dispatch stack, augmented by the Western
  electricity market

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Factors that Influence Integration Costs Results
and Insights

• Wind penetration
• Balancing area (control area) size
• Conventional generation mix (implication for
  higher penetration and new balance-of-system
  capabilities
• Load aggregation benefits
• Wind resource geographic diversity
• Market-based or self-provided ancillary services
• Size/depth of interconnected electricity markets
• Unit commitment and scheduling costs tend to
  dominate
• Realistic studies are data intensive and require
  sophisticated modeling of wind resource and power
  system operations

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Emerging Study/Methods Best-Practices

• Start by quantifying physical impacts
• Divide the impacts by time scale corresponding to
  grid operation cycles
• Analyze cost impact of wind in context of entire
  system in each time scale based on physical
  requirements
• Load variability
• Wind variability
• System operator must balance TOTAL of all loads
  and resources, not individuals
• Capture wind deployment scenario geographic
  diversity through synchronized weather simulation
• Re-create real wind forecasts

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Stakeholder ReviewEmerging Best Practices

• Technical review committee (TRC)
• Bring in at beginning of study
• Discuss assumptions, processes, methods, data
• Periodic TRC meetings with advance material for
  review
• Examples in Minnesota, Colorado, California, New
  Mexico, and interest by other states

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Minnesota 25 Wind Energy Penetration Study (MN
DOC 2006)

• For 3500 to 5700 MW of wind generation delivered
  to MN load (15 to 25 of retail electric energy
  sales in 2020)
• An increase of 12 to 20 MW of regulating capacity
• No increase in contingency reserves
• An increase of 5 to 12 MW in 5 minute variability
• Incremental operating reserve costs of 0.11 per
  MWh of wind generation in the 20 case

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Minnesota 25 Wind Energy Penetration Study (MN
DOC 2006)

• Bottom Line The addition of wind generation to
  supply 15, 20 and 25 of Minnesota retail
  electric energy sales can be reliably
  accommodated by the electric power system
• The total integration operating cost for up to
  25 wind energy is less than 4.50/MWh of wind
  generation. Key drivers are
• A geographically diverse wind scenario
• The large energy market of the Midwest
  Independent System Operator (MISO)
• Functional consolidation of balancing authorities
  
• Sufficient transmission (i.e. minimal
  congestion)

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System Operating Costs Impacts Results from
Recent Studies (/MWh)
Penetra- tion () 3.5 20 7 29 15 15 20 34
Regula- tion 0 0 0.19 1.02 0.20 0.23 0.11 0.23
Load- Follow 0.41 1.6 0.28 0.15 0 0 0 0
Unit- Commit 1.44 3.0 1.40 1.75 4.77 4.37 2.00 4.1
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Total Impact 1.85 4.6 1.87 2.92 4.97 4.60 2.11 4.
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Study UWIG/Xcel Pacificorp BPA/Hirst We
Energies Xcel/PSCO Xcel/MNDOC MN/MNDOC MN/MNDOC
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Range of System Operating Cost Impacts Studies
Conducted To Date
6 4 2 0
1/2 /kWh
Integration Cost (/MWh)
0 5 10 15 20 25 30
Wind Penetration ( of System Peak Load)
All results to date fall within the crosshatched
area
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GE Energy/NYISO/NYSERDA New York Wind Evaluation

• Comprehensive study of winds impacts on
  transmission system planning, reliability and
  operations
• 3,300 MW of wind in system serving 34,000 MW of
  customer load (10 wind penetration)
• Energy prices based on functioning commercial
  wholesale markets -- day-ahead and hour-ahead
• All previous studies based on operating costs
  only
• Assumes wind is a price-taker
• Market (demand-supply balance) sets price wind
  generators are paid the market price

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GE Energy/NYISO/NYSERDA New York Wind Evaluation

• Overall Conclusion NY State power system can
  reliably accommodate at least 10 wind (3,300 MW)
• Minor adjustments to planning, operation and
  reliability practices
• Total NY system (less wind) variable operating
  costs (fuel, plant startup costs, etc.) reduced
  by 350 M
• State-of-the-art wind forecasting contributed
  125 M of this reduction (about 80 of
  perfect-forecast value)
• Electricity costs reduced statewide (0.18/kWh --
  all kWh)
• System transient stability improved

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Winds Contributions to Electric Power

• Energy displacement of fossil fuels
• In most cases, this is the primary motivation.
  Previously existing power plants run less, but
  continue to be available to ensure system
  reliability.
• Contrary to common lore, addition of a wind plant
  requires NO new conventional backup generation to
  maintain system reliability.
• In many cases, natural gas is saved, reducing
  total system operating costs. In all cases,
  overall emissions are reduced.

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Winds Contributions to Electric Power

• Capacity meeting new load growth
• Wind generally less effective in this respect
  than conventional generation. Winds may be low
  during peak electricity demand periods.
• But addition of a wind plant will allow some new
  load to be served. The amount depends on many
  factors. Examples
• New York about 10
• Long Island about 40
• Minnesota about 10
• With experience and over time, operating
  strategies and generation mix will evolve so that
  combinations like wind, hydro and natural gas
  will serve new load reliably.

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• IEEE Power Engineering Society Magazine,
  November/December 2005
• Utility Wind Integration Group (UWIG) Operating
  Impacts and Integration Studies User Group
• www.uwig.org

32

• UWIG Summary Key Points from IEEE Power
  Engineering Society Magazine, Nov/Dec 2005
• www.uwig.org

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Environmental Tradeoffs
We need to evaluate environmental impacts on a
relative basis. No energy-generation approach
is without impacts. The choice is wind vs.
something -- not wind vs. nothing.
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We cant lose sight of the larger benefits of
wind, says Audubon Washingtons Tim Cullinan.
The direct environmental impacts of wind get a
lot of attention, because there are dead bodies
on the ground. But nobody ever finds the bodies
of the birds killed by global warming, or by oil
drilling on the North Slope of Alaska. Theyre
out there, but we dont see them.
Audubon Magazine, September 2006 feature article
on wind power
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Environmental Benefits of Wind

• No emissions of any kind during operation
• No SOx, NOx, particulates or mercury
• No contributions to regional haze
• No greenhouse gases
• No toxic wastes or health impacts
• Nuclear waste transport and storage unresolved
• Respiratory diseases of growing concern
• No water consumption or use during operation
• Water availability a looming crisis in the
  Western US

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Environmental Benefits of Wind

• Global climate change concerns can no longer be
  ignored by any legitimate political entity
• Most environmental scientists view this as by far
  the most serious environmental issue facing
  society
• Unavoidable evidence mounting
• Very few doubters remain
• Not many arrows in the quiver to address this
  concern
• We need them all
• Wind energy is one of them

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Paul Anderson, CEO of Duke Energy(Southeastern
Utility, Coal/Nuclear)

• Lobbying for tax on carbon dioxide emissions
• Personally, I feel the time has come to act - to
  take steps as a nation to reduce the carbon
  intensity of our economy. And its going to take
  all of us to do it.
• Paul Anderson, quoted in AP press release,
  published April 7, 2005

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Wind Contributions in Europe and the United
States (2006)
Generation Total (MW)
Wind of Electricity
Wind (MW)

• Germany
• Spain
• Ireland
• Denmark
• USA

85,000 50,000 5,500 4,200 900,000
22,000 11,600 600 3,100 11,300
7 8 6 30 0.6
Approximate values
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Contrasting Approaches to Accommodating Wind
Power in Europe and in the U.S.

• Europe Wind power is environmentally preferred.
  How can we best accommodate it within the
  existing power system?
• U.S. OK, well accept wind into the existing
  system, but it will follow our traditional rules
  and procedures.

A change in mindset is needed in the U.S. It
will not come from within the power sector, whose
responsibility is reliability, not change.
Change, and the incentives to enable it, must
originate in the policy sector.
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The Climate Change Threat Is A Major Business
Opportunity

• Technologies to reduce CO2 emissions are needed
  worldwide
• Industries producing them will provide employment
  and profits
• Countries that produce them will enjoy export
  potential and trade-balance benefits
• Countries that do not may miss out on one of the
  21st Centurys best business opportunities

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Bottom Line on Wind Power
Wind power is a very low carbon, affordable,
domestic energy source It can make a large
contribution to the US economy -- 20 of
electricity and more As a responsible society, we
need to use it -- and use our ingenuity to
resolve the tactical issues it presents