Building the ‘ Solar Protection Factor ’ Into an Increasingly Green-Powered Grid RSS Feed

Building the ‘Solar Protection Factor’ Into an Increasingly Green-Powered Grid

Utilities need to prepare for the rise of wind and solar power and the retirements of baseload power plants, and that includes building “solar protection factors” into their long-term planning.

That’s one of the recommendations from consultancy ScottMadden in its latest energy industry update. The report, which covers subjects ranging from Trump administration energy policies, to blockchain, to smart cities, also gets into detail on today’s key grid paradigm shift — the increasingly frequent retirements of coal and nuclear power plants and their replacement by natural gas and renewables.

In the past decade, for the first time ever, baseload retirements outpaced baseload additions, with 23 gigawatts of net retirements since 2010, the report found. Of the 84.2 gigawatts of retirements, 61 percent were coal and 29 percent gas steam turbine plants, while the 61.1 gigawatts of additions have been 74 percent combined-cycle natural gas and 24 percent coal steam turbines.

The average age and size of retiring power plants have also both been rising over the past decade, and a significant portion of what’s left is aging — nearly 7 percent of today’s baseload capacity is over the age of 50, and more than 23 percent is 40+ years old, the report finds.

Natural gas, meanwhile, is continuing its trajectory of increasing supply and falling prices. This is being driven by the boom in shale gas production, which has outstripped some longstanding supply sources. Utilities are looking for ways to hedge natural-gas procurements, as the report describes in a rundown of U.S. and Canadian policy changes on this side of the energy business.

SPF: A new rule of thumb for solar oversupply risk

While natural-gas use is growing exponentially, natural-gas-fired power plants are seeing some challenges from the rise of intermittent wind and solar power — most notably in California.

State grid operator CAISO saw curtailments of renewable generation from wind and solar jump 46 percent in the first two months of 2017 compared with the same months last year. At the same time, the frequency of negative prices — times when the CAISO market is essentially paying people not to generate power — rose to 13 percent of all hours in February.

Solar power’s production curves have led to increasingly steep ramps in the late afternoon and evening demand for grid operators to manage, manifesting in the form of California’s “duck curve.” Bigger ramps will require more peaking capacity, which could be a market for natural-gas power plants. However, there’s little incentive to participate in the market, given the low power prices driven by rising renewables and today’s low gas prices.

All of these factors are coming into play in the pace of baseload retirements in the state. In February, Calpine announced that it was retiring four gas turbine plants in CAISO territory, each less than 15 years old, while La Paloma Generating LLC, owner of the 1,022-megawatt La Paloma power plant, declared bankruptcy. Last year, Calpine placed its 672-megawatt Sutter Energy Center into “cold lay-up,” and Dynegy said it would retire 1,500 megawatts at its Moss Landing facility — both for economic reasons. And CAISO has recently indicated that another 10 gigawatts of gas-fired generation may be at risk of retirement for economic reasons.

To deal with these challenges, ScottMadden describes a general guideline to assess solar oversupply risks, which it dubs the “solar protection factor.” The SPF is built on calculations of the grid’s “oversupply cushion,” or an estimate of how much non-baseload generation is needed at times of minimum midday load, and “solar headroom,” or the amount of solar capacity that can be added to the system before experiencing solar oversupply risks. It then divides solar generation by minimum midday load, minus its “minimum-run” baseload generation, to derive the system’s SPF, as shown in this illustrative graph.

Read full article at GreenTech Media