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Integrating Variable Resources and Flexible Demand

Fereidoon P. Sioshansi, Ph.D.'s picture
President, Menlo Energy Economics

Dr. Sioshansi is President of Menlo Energy Economics, a consulting firm based in San Francisco, California, advising clients on the rapid transformation of the electricity sector and emerging...

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  • Dec 30, 2020

What is the best way to integrate growing levels of variable renewable resources into grid networks such as in California, as it marches towards 100% renewable mix by 2045? Among the usual suspects are better interconnections, and more generation diversity, including more storage and price responsive demand, a resource traditionally neglected.

This subject is gaining greater attention. It also is the focus of a newly released book, Variable Generation, Flexible Demand.

It highlights the need for grid operators to predict the amount of fluctuating wind and solar resources and schedule complimentary demand. This represents a major change from the traditional way in which demand was forecast and generation resources were dispatched to meet it. The book provides lessons and examples of integrating rising levels of carbon neutral resources into the grid.

 “California is one of the few places in the world where this paradigm change is happening because so much new solar and wind is being added,” Fereidoon Sioshansi, the book editor, said.

He added that the 100-year old utility model of predicting load and then matching it with fossil fuel generation, and some hydropower supplies, is out of sync with a green grid where the bulk of generation is non-dispatchable renewables. “Given the variable nature of renewable generation, particularly solar, a huge shift is needed to create a smooth, efficient, and low-cost transition to this new world order,” he told Current.

The book looks at a number of evolving markets including in California, ERCOT, Italy, Spain, and Australia, among others, all working to integrate rising levels of renewable resources to decarbonize their grids.

Renewable generation still plays a minor role in many parts of the world where it is squeezed into the traditional dispatchable generation model. In these places, the variable renewable supplies are the small tail on the big dog, Sioshansi said. In contrast, in California and some European countries, the big renewable tail is increasingly wagging the dog.

In Denmark, for example, on some blustery days, the wind output exceeds total demand on the network. But because of Denmark’s strong interconnections with Germany and Scandinavia, the excess wind can be absorbed in Germany’s much larger market and/or it can be stored in hydropower reservoirs in Sweden and Norway – acting as big batteries.

In California, however, the reverse is true, since its huge market dwarfs those of the neighboring states. Consequently, California’s excess solar generation cannot easily be exported to the neighboring states–nor can its deficits be covered by imports–resulting in renewable curtailment.

Contributors to the book examine the role of expanding flexible demand to balance supply, in conjunction with other flexible resources, including peaking plants and energy storage.

“Batteries are more versatile and can respond almost instantaneously, compared to a natural gas fired peaking plant, which takes time to respond to signals from the grid operator,” Sioshansi noted. Flexible demand can respond to signals in the same way.

The book explores practical ways that demand flexibility can play a constructive role as more systems move towards higher levels of renewable generation along with complementary market designs, business models, enabling technologies, policies, and regulation.

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Fereidoon P. Sioshansi, Ph.D.'s picture
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