The Take

Designing the grid for renewables

Posting in Design

Real-world European experience and recent research show that renewables can achieve high levels of penetration onto the power grid, while increasing resiliency and reducing costs.

Americans have been repeatedly told a series of lies about accommodating renewables onto the power grid: That it can't handle large amounts of intermittent power generation. That standby fossil-fueled capacity must be maintained at 100 percent of demand for those times when the sun isn't shining and the wind isn't blowing. That brownouts and blackouts will inevitably result from depending on renewables. That nuclear is the only power source that can meet our needs in the future. And so on.

Europeans beg to differ.

An August 31 article by James Conca in Forbes ("Germany -- Insane or Just Plain Stupid?") regurgitated these hoary tropes, claiming that Germany's decision to shut down nuclear plants and transition to renewables was a colossal mistake, because "the grid can't handle it, the transmission system is not there, and the power disruptions and brownouts are wreaking havoc on the country's energy reliability."

Germany-based energy journalist Craig Morris shot back in his column at Renewables International:

The fact is that none of what is happening in Germany fits what Americans think, and the only regular source of news from Germany in English is Spiegel Online, a laughable source of energy news (the Forbes article cites Spiegel). Germany is switching to renewables quickly, without raising its carbon emissions, with probably the most reliable grid in the world, on a market with freedoms Americans don't even know they lack, with a job market that continues to strengthen (even during the ongoing economic crisis), and in combination with a nuclear phaseout. None of this makes sense to Americans, who respond not by accepting the facts and changing their minds but by getting the picture wrong.

Morris highlighted a 2010 study I mentioned in March ("Why baseload power is doomed"), which found that nuclear power plants are fundamentally "incompatible with renewable energies." Because renewables enjoy priority dispatch on the grid, conventional generators need to be cut back when the wind is blowing and the sun is shining. Older nuclear and coal power plants, which cannot be ramped up and down easily, are ill-suited to a grid with large amounts of variable renewable power.

Morris proceeded to dismantle the reliability argument, pointing out that instead of power disruptions, Germany's grid is now the most reliable of the EU member states.

Source: 5th CEER Benchmarking Report on the Quality of Electricity Supply, European Energy Regulators (PDF)

According to Germany's Federal Network Agency (Bundesnetzagentur), grid interruptions fell steadily since records started being kept in 2006, even as the number of operators/networks increased. Germany's grid had just 15 minutes of unplanned interruptions in 2011. Morris notes that by comparison, Germany had 19 minutes of downtime in 2007, while nuclear-heavy France had 62 minutes and the U.S. had 240 -- more than 12 times as much as Germany. Those outages cost the U.S. economy an estimated $150 billion a year, equivalent to four cents per kilowatt-hour, or about one-third the average retail price of grid power.

As I mentioned in March, the European countries with the largest share of renewables on their grids -- Germany, Denmark, Spain, Ireland, and Portugal -- were found to have "positive conditions for grid operations" in a recent study. And indeed, the CEER report from which I have taken the above chart shows that those same countries (with the exception of Portugal) sport the least grid downtime.

Grid penetration

European countries have supported far more intermittent power on their grids than skeptics have said was possible, and more than the averaged data in the chart I showed in the March article.

The German grid is a testament to good planning, having been able to accommodate renewable power growing at an astonishing rate, from 20 percent in 2011 to 25 percent just six months later. Much of that is due to their rapid deployment of solar PV, which grew 40 percent over the 12 months ending in June of this year. Germany installed 3 gigawatts (GW) in December 2011 alone, with another 4.9 GW in the first seven months of 2012. Germany added more capacity in one month -- 543 MW in July – than the U.S. installed in the first three months of the year. For a final perspective, Germany added as much PV in the first half of 2012 as the U.S. has in total cumulative installed capacity.

Wind provides over 9 percent of the country's grid power while solar PV has more than a 5 percent share. But penetration rates can be much higher in real time, as several slick public web sites helpfully tweeted by Kees van der Leun show.

On an SMA web site, you can watch how German solar production went from zero to 15.6 GW on September 30, at which point it was meeting 30 percent of total demand.

The day before, Danish state grid operator Energinet.dk showed 80 percent of Denmark's electricity demand being provided by wind. (On average, renewables supplied about 40 percent of Denmark's power in 2011.) On the same day in Spain, wind covered one third of the demand.

The antiquated U.S. grid has never come close to supporting that much power from renewables. Without significant "smart grid" upgrades and more transmission capacity, it simply can't. But the grid needs upgrading anyway. As the Washington Post recently reported, failing to modernize the U.S. grid will cost the U.S. $71 billion in service interruptions alone by 2020.

Grid management

A big part of accommodating renewables onto the grid is smart grid management. All that additional power from solar presents a bit of a challenge to the German utilities, who expect a bottleneck to develop in the distribution grids within the next five years. One way of working around that problem is smart demand response using dynamic pricing, which would persuade large industrial and commercial users to shift their usage to times when supply is ample and prices are low. Demand response will increasingly replace conventional power generation, according to the utilities. (Price-based demand management has long been a feature of electrical distribution in parts of the U.S.)

The distributed nature of renewable generators is helpful in itself. Researchers at the Max Planck Institute for Dynamics and Self-Organisation in Germany recently reported that greater network density means more inherent stability on the grid. This is partly intuitive: The more pathways there are for the power to travel, the lower the likelihood that a single downed line will take down larger portions of the grid. More interestingly, the researchers found that in a complex network, generators and consumers "synchronize themselves," which I suspect would reduce both the grid management challenge and the total generation capacity required.

New research is exploring grid management solutions to support renewables. Here are just a few of dozens of papers being published in the next several months.

A paper from Polytechnic of Porto, Portgual, models how advanced power grid scheduling techniques and wind forecasting can optimize grid power to ensure the lowest possible operation costs and reduce power losses.

Another paper from Siemens Corporate Technology in Germany considers the relative contributions of grid extensions and storage on a 100 percent renewable European grid, and finds that renewables could supply 60 percent of the power without additional grid capacity or backup, and 80 percent with an "ideal" European grid.

A technical paper from the Serbian government proposes a "reliability index" methodology that could be implemented as grid management software to predict the reliability of distributed generation.

A paper from the Norwegian University of Science and Technology finds that with better integration, Norway's immense hydro power potential could serve as storage for continental Europe and slash the need for conventional backup generation, while delivering a savings of at least 100 million euro per year.

And so on.

Back here in America, a white paper from the Center for American Progress is just trying to get the U.S. off the dime in grid development. Following the European examples, it argues that integrating better management and forecasting software into a more highly networked grid can allow it to accommodate larger amounts of renewable energy, while demand response and storage integration can improve efficiency and reduce the need for standby generation capacity, reducing costs.

The take-home lessons from these studies are straightforward: The more networked and distributed the grid, the more resilient and robust and inexpensive it is, and the less storage or backup generation it needs. It should be possible for renewables to meet up to 80 percent of demand, with more efficient use and responsive demand. The myth that the grid needs 100 percent standby fossil-fuel capacity is busted. Most of the challenges are in grid management, planning, and market design, not technology.

So what's the hold-up?

One could argue that the U.S. is lagging Europe so badly in grid development and renewables penetration because, unlike Germany, Denmark, Spain, Ireland, and Portugal, it has a significant amount of domestic fossil fuels left to burn. Our fossil fuel industry is very effective at legislative and regulatory capture. As long as our domestic fuels are cheaper than renewables (which will not be the case for much longer), we can resist change and argue over pennies per kilowatt-hour in the short term, while averting our gaze from the obvious realities of the long term, and the multi-fold savings offered by transitioning to renewables.

Platts offered a rare bit of insight a week ago into the institutional resistance of U.S. utilities, who were recently surveyed by Macquarie. The respondents worried about the impact that energy efficiency would have on the profitability of their businesses, which make most of their money on generation and transmission. In short, lower energy demand spells lower profits. One quoted analyst said the outlook for weak demand growth “might be a bad cold for utilities, but for merchant generators, it could be a heart attack.”

The more energy produced from distributed renewables, which deliver power to the grid close to where it is used, the less need for generation or transmission by the utilities. And the less the fossil-fueled generation units are used, the more difficult it is to justify their cost. As more renewable power is integrated into the grid, the profitability of conventional generation will fall.

This leads Morris to an ironic conclusion that renewable proponents should start worrying about how to protect the profitability of conventional standby power units. If no additional progress could be made in grid storage, management, and networking, I would agree. But it seems we are only beginning to understand the real potential of highly integrated and networked grids, and how better efficiency, demand response and storage could all but eliminate the need for standby capacity from fossil fuels and nuclear in the long run.

Photo: Conceptual design of transmission line pylons by Choi + Shine Architects

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Chris Nelder

Columnist (Energy)

Chris Nelder is an energy analyst and consultant who has written about energy and investing for more than a decade. He is the author of two books on energy and investing, Profit from the Peak and Investing in Renewable Energy, and has appeared on BBC TV, Fox Business, CNN national radio, Australian Broadcasting Corp., CBS radio and France 24. He is based in California. Follow him on Twitter. Disclosure