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Innovations in the Power Industry—The Next Big Pairs of Things

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Rudy Shankar's picture
Director Energy Systems Engineering, Lehigh University

Summary Entire career experience has been devoted to technology development and implementation support for public and non-profit companies, mainly the energy/power industry, including change...

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This item is part of the Special Issue - 2021-04 - Innovation in the Power Industry, click here for more

We are reminded that good things come in twos. In the power industry we can envision so many technology developments that have been implemented, shown reliable performance and remain relatively inexpensive. But when operated together the synergistic combination may be more impactful than each individually. They become game changers. There are four candidate pairs in front: Solar + storage. Electric vehicles + charging infrastructure.  Decarbonization + demand side management. Artificial Intelligence + grid management.

Easier said than done, but will they be shown to be reliable, resilient, work under various circumstances and be inexpensive? If true we can expect to make significant advances toward combatting climate change in the next few decades. State and Federal policies play a large role for each pair to be successful; so forward-looking legislation are likely to be at least as important as the technologies.  Even the success of one or two pairs will be impactful.

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Solar + Storage

Photovoltaic solar energy has made remarkable advances in reduction of cost of installation and the levelized cost of electricity (LCOE) is now on par with several conventional generation sources. In the past decade, solar has experienced an average annual growth rate of 42%. Federal policies like the solar Investment Tax Credit, rapidly declining costs, and increasing demand across the private and public sector for clean electricity have powered this growth [1]. There are now more than 97 gigawatts (GW) of solar capacity installed nationwide, equal in capacity to our nation’s nuclear fleet. The cost to install solar has dropped by more than 70% over the last decade, leading the industry to expand into new markets and deploy thousands of systems nationwide. Recent utility-scale prices range from $0.02/kWh to $0.04/kWh, competitive with all other forms of generation. But deferring use of solar energy at a later preferable time with adequate storage is still not economical because the average cost of Li-Ion battery storage for 4 hours is $0.15/ kWh. This price will inevitably be  lower with wider adoption of storage and increase acceptance of solar as a reliable resource. More pointedly, solar + storage could increase the capacity factor for grid operators to consider them dispatchable. We have not reached that point yet, but many states have adopted mandated storage installation to complement solar resources. The operational success of solar + storage may drive innovation to build in modular storage with solar resources. Similarly, concentrated solar power (CSP) where the radiant heat of solar energy is converted to thermal energy to turn a turbine has a small but vital role, especially in sun-drenched states. Here cost-effective thermal storage can assist in deferring energy use for peak demands. The ambitious TuNur project which plans to install 4 GW of CSP in the North Saharan desert region will rely on efficient thermal storage to meet night-time demands for their proposed customer base in Europe [2].

Figure 1: Cumulative Growth of Solar Resources in the United States

               Source: SEIA/Wood Mackenzie Power & Renewables U.S. Solar Market Insight 2020 Year in Review

While rooftop solar has been adding capacity, community solar has become popular in some states to provide access to all, even those that may not receive the necessary insolation to justify installation on their roof. Community solar state rules are now making it accessible to a larger cross section of the demographics, preventing “squatters” from claiming a large share of capacity.

Distributed solar is expected to grow rapidly for a 20-year CAGR of 7.5% [3]. But what makes it attractive is the concomitant growth of storage technology and products in the market. The storage capacity is expected to grow an order of magnitude in the next decade, from 800MW installed capacity today to nearly 8,000 MW. But what had been missing were policies that could leverage the market adoption of storage, and the various forms it could be utilized, from energy deference to more suitable times to voltage and frequency control of the grid.  

In 2018, the Federal Energy Regulatory Commission (FERC) issued Order 841, which directs regional energy system operators to remove barriers for energy storage in wholesale markets. The order paved the way for full participation of energy storage resources in energy, capacity and ancillary services markets.

In September 2020, FERC issued Order 2222, a final rule allowing bundled behind-the-meter distributed energy resources to participate in wholesale energy markets. The order defines distributed energy resources.

These developments are likely to influence more use of virtual power plants (VPPs) to augment grid resources to meet peak demands as well as demand response.

Electric Vehicles + Charging Infrastructure

Electric vehicles have come a long way from when the Nissan Leaf was introduced with a modest driving radius on a full charge of less than 200 miles, to today when GM has pledged an all-electric fleet in a decade. However, electric vehicles form a very small percentage of the total number of cars: slightly more than 1.5 million (total: 280 million).  The number of EVs on the road is expected to grow nearly 40-fold by 2040. This extraordinary growth will be no doubt due to policy measures: the current administration is going to strongly advocate government fleets to be electric. This major shift to EVs is reflected world-wide, as shown in Figure 2. These projections are staggering: China and India are projecting that all-electric vehicles on the road will reach near 100% by 2050.  The US and Europe appear to have less ambitious but still impressive goals. These will be driven by more stringent environmental standards, decarbonization targets driven by individual cities and municipalities.

One of the fears for EV drivers is fuel anxiety, the availability of a charge to get one safely to “visit grandma”.  With the rapid introduction of EVs with larger driving radius on one charge, and the concerted attempts of some states to have charging infrastructure placed strategically along major highways, a certain amount of that anxiety was eased.  Here again policies may be one of the bigger impediments in encouraging charging infrastructure deployment.

In a study performed by the American Council for an Energy Efficient Economy (ACEEE) each of the US state policies were measured for EV favorability in six areas: electric vehicle promotion and EV charging infrastructure planning and goal setting; incentives for EV deployment; transportation system efficiency; electricity grid optimization; EV equity and transportation electrification outcomes [4]. States were scored on a 100-point scale and ranked in six tiers. California ranked first, earning 91 points. New York came in second, with 63.5 points, but only five states and the District of Columbia scored more than half of the points available. It clearly indicated that save a few states, most of the US was either not ready or prepared for a large influx of electric vehicles. The Biden plan calls for nearly $175B for increase in EVs and charging infrastructure that if legislated could see a widespread adoption of electric cars. For greater market penetration of EVs, the demand for electricity may be as much 20 to 38% above the norm. In developed countries, this should provide revenue for utilities to accelerate transformation to a grid-connected renewable energy system with extensive energy storage and to digital energy management. In developing countries, the increased electricity demand could spur the first-time installation of modern grids that are unencumbered by the legacy of the older, less functional grids of the developed world.

Figure 2: Growth of EVs Worldwide (courtesy: Ernst & Young)

Decarbonization + Demand Side Management

Many states are setting goals to achieve carbon neutrality by 2050. The Biden administration has stated: “At this moment of profound crisis, we have the opportunity to build a more resilient, sustainable economy – one that will put the United States on an irreversible path to achieve net-zero emissions, economy-wide, by no later than 2050.”

The contributors to GHG emissions are approximately split evenly among electricity generation, transportation, industrial processes, and facilities & agriculture. It was very quickly realized that as much as replacing fossil fuels for electricity generation by cleaner alternatives—the supply side—was important, there also is an immediate need to decarbonize the other three contributors. Hydrogen has emerged as a clean alternative to conventional fossil fuels. What if we can utilize “distributed” nuclear resources to generate hydrogen and/or electricity to replace conventional fossil fuels used for certain industrial processes? In a summary study performed by a student in the Energy Systems Engineering group at Lehigh University (https://ese.lehigh.edu )  showed that at carbon pricing at ~$10/ton, small nuclear reactors are practical alternatives.

Demand side decarbonization will enable great advances in meeting climate goals. This will not be easy, with less developed, and many developing countries wanting relaxation in their emission curtailment.

AI + Grid Management

Artificial intelligence has held a fascination for many applications in facial recognition, predicting the weather and human behavior. Its uses in the power industry were sparse in the early days. The author utilized “expert system” methods in the late 1980s to interpret nondestructive evaluation (NDE) signals for signal recognition[1] to capture human interpretive capabilities. These early attempts suffered from lack of extensive data, lack of the type of computing power that could “crunch” numbers; but they opened the door for what could be done if such capabilities were at hand.

With the increasing digitization of the utility, decentralization of assets and the utilization of renewable resources being asynchronously connected to the grid through inverters, grid management has become more dynamic and dependent on large swaths of data. Today, renewable resources are still a small fraction of other conventional resources—central thermal energy-based plants—but it is likely to become a larger fraction in the coming years and decades.

When the promise of AI can be fulfilled by its management of the grid to assure high reliability, high resilience under high penetration of renewables then it will be a true sign that, yes, the grid can be managed with the new data analytic tools. However, we must be humble and prepare for occasions when the answers may not be that simple, that a Texas-like grid situation engendered by extreme weather may open unseen or unexperienced challenges.

References

[1] “U.S. Solar Market Insight: 2020 in Review.” March 2021. Wood/McKenzie & SEIA.

[2] “The TuNur Concentrated Solar Power Project.” https://www.tunur.tn/

[3] “Power & Utilities- Our Latest Thinking- EY USA”. https://www.ey.com/en_us/power-utilities

[4] “State Transportation Electrification Scorecard.” February 7, 2021. https://www.aceee.org/research-report/t2101 

 


[1] https://core.ac.uk/download/pdf/191230628.pdf

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Thank Rudy for the Post!
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