Wind and the Electrical Grid -­‐ OSPE Study Findings Outline of Presenta:on ²  OSPE and Energy Task Force role in policy advocacy
²  Why Ontario wind generation is out of step with electrical demand
²  Why wind generation is difficult to integrate into Ontario’s electrical
grid
²  Why electricity market prices collapse and even go negative in
Ontario
²  Why Quebec’s hydroelectric storage capacity is not available to
Ontario
²  Why wind generation results in higher GHG emissions in Ontario
²  Why nuclear generation is needed for low GHG emissions
²  The economic impact of load following (dispatching)
2 Wind and the Electrical Grid -­‐ OSPE Study Findings Data Sources for Today’s Presenta:on ²  The Ontario generation (other than solar) and customer demand
data was obtained from the IESO website (http://www.ieso.ca).
Analysis done in 2011 but demand in 2012 and 2013 was similar.
²  Electricity production cost data was obtained from Ontario FIT rates
and the Projected Costs of Generating Electricity, 2010 Edition,
Organization for Economic Co-operation and Development,
median case with carbon tax removed.
²  You can download OSPE energy policy documents and this slide
presentation at:
http://www.ospe.on.ca/chappres
3 Wind and the Electrical Grid -­‐ OSPE Study Findings OSPE and Energy Task Force Role ²  Energy policy affects business opportunities and that affects
engineering job opportunities.
²  To bring an engineering perspective to the attention of public
policy makers to help improve energy policies.
²  Non-partisan contributions from OSPE members with diverse
engineering backgrounds.
²  OSPE’s role is NOT to do actual engineering but to call attention to
policy issues that need engineering input.
4 Wind and the Electrical Grid -­‐ OSPE Study Findings Context ²  Ontario Green Energy Act in mid 2009 changed the nature of
electricity production.
²  Opened up the electrical grid to private sector producers of wind,
solar and other forms of renewable generation.
²  Introduced OPA FIT program & rules.
²  Created many design and operating challenges because
engineering factors were not considered during development of
the Act.
²  Ontario has more base load capacity than it can use (11,000 MW
minimum demand but over 17,000 MW of installed base load
capacity in 2013, and growing).
²  Ontario has very little storage to absorb intermittent (variable)
sources like wind and solar generation. Flexible backup is needed.
5 Wind and the Electrical Grid -­‐ OSPE Study Findings Ontario Electrical Demand Profile for 1 Year ßPeak load is provided by: -­‐  Solar -­‐  Day,me wind -­‐  Flexible nuclear -­‐  Flexible hydraulic -­‐  Flexible CHP, bio-­‐energy -­‐  Flexible natural gas ßBase load is provided by: -­‐  Must run natural gas -­‐  Must run hydraulic -­‐  Must run nuclear -­‐  Must run CHP -­‐  Night ,me wind 6 7 Wind and the Electrical Grid -­‐ OSPE Study Findings Ontario Electrical Demand Profile for 1 Day !
!
Wind and the Electrical Grid -­‐ OSPE Study Findings Wind Genera,on Does Not Align With Demand ²  Because of Ontario’s proximity to the Great Lakes, wind is primarily
driven by the solar cycle and associated weather patterns.
²  Wind is highly variable in Ontario.
²  Wind is strong at night when demand is low
²  Wind is strong during spring and fall when demand is low
²  Wind is weak in the summer when demand is highest
8 Wind and the Electrical Grid -­‐ OSPE Study Findings Wind Genera,on Does Not Align With Demand Ontario Wind Output Sep 2010 - Sep 2011
Total Production by Hours of the Day
Installed Wind Capacity of 1,412 MW
200,000
Annual Production
150,000
Wind
Output
MWh
Winter Production
100,000
Autumn Production
Spring Production
50,000
Summer Production
0
1
3
5 7 9 11 13 15 17 19 21 23
Time During Day (Hours)
9 10 Wind and the Electrical Grid -­‐ OSPE Study Findings Wind Genera,on Does Not Align With Demand Total System Demand vs Wind Generation
Output - Normalized to 100% of Peak
( highest demand week in 2011 )
Total System Demand vs Wind Generation
Output - Normalized to 100% of Peak
( lowest demand week in 2011 )
100%
100%
Total
Demand
incl.
exports
60%
Wind
Output
40%
80%
60%
Wind
Output
40%
20%
20%
0%
0%
Sun, 1 AM
Sun, 1 PM
Mon, 1 AM
Mon, 1 PM
Tue, 1 AM
Tue, 1 PM
Wed, 1 AM
Wed, 1 PM
Thu, 1 AM
Thu, 1 PM
Fri, 1 AM
Fri, 1 PM
Sat, 1 AM
Sat, 1 PM
Total
Demand
incl.
exports
Sun, 1 AM
Sun, 1 PM
Mon, 1 AM
Mon, 1 PM
Tue, 1 AM
Tue, 1 PM
Wed, 1 AM
Wed, 1 PM
Thu, 1 AM
Thu, 1 PM
Fri, 1 AM
Fri, 1 PM
Sat, 1 AM
Sat, 1 PM
80%
Wind and the Electrical Grid -­‐ OSPE Study Findings Wind Genera,on Does Not Align With Demand ²  Wind drops below 10% of installed capacity across the province
approximately 20 days a year for at least 24 hours at a time.
²  By 2021 Ontario will not have 7,500 wind turbines of approximately
1 MW each. It will have one 7,500 MW wind turbine.
²  Wind capacity requires a much higher system reserve (backup)
than conventional power plants.
²  Wind capacity in Ontario requires approximately 90% of flexible
backup supply to meet reliability needs compared to 15% for
conventional power plants.
11 Wind and the Electrical Grid -­‐ OSPE Study Findings The Impact of a Backup Supply for Wind ²  Because the backup supply needs to be available all the time,
wind is effectively a displacement energy source – it displaces the
backup energy source.
²  Consequently the economic value of wind energy is the displaced
fuel cost of the backup energy supply (3 cents/kWh for gas, 0.5
cents/kWh for hydroelectric and nuclear).
²  When wind displaces gas we also reduce CO2 emissions by 400 kg
per MWh or 400 g per kWh.
²  The FIT rate for wind generation is 11.5 cents/kWh or about 4x its
day-time value and 23x its night-time value. That’s not including
transmission upgrade costs.
²  The high premium for wind energy causes the global adjustment
portion of electricity prices to rise which then increases the cost of
electricity to consumers and businesses.
12 Wind and the Electrical Grid -­‐ OSPE Study Findings ²  Our base load generation resources, especially nuclear, are
inflexible.
²  Nuclear does not lower output enough when demand is low
(Bruce Power is the exception – they recently 2,400 MW in total,
out of a nameplate capacity of 6,300 MW).
²  Ontario has no seasonal storage and very little daily storage
(approx. 2,000 MW for a few hours).
²  The poor alignment of wind production with demand combined
with inflexible nuclear and lack of storage makes integrating wind
generation into the grid difficult and costly.
13 Wind and the Electrical Grid -­‐ OSPE Study Findings ²  Load demand has not grown as much as predicted due to the
global recession and loss of manufacturing and resource jobs.
²  Conservation programs are causing the night-time load to drop.
²  Air conditioning loads are causing the peak load to rise in the
summer.
²  Grid operating capacity factor is now only 63%. Which means 37%
of our grid assets are underutilized.
²  We have too much base load capacity at night and weekends
especially during the spring and fall.
14 Wind and the Electrical Grid -­‐ OSPE Study Findings Why Electricity Prices Can Collapse ²  Ontario uses an auction market to set the market clearing price to
determine which plants run and which ones shutdown.
²  If a plant cannot shutdown for technical or economic reasons, it
must lower its bid price into the auction to ensure it is chosen to run.
²  Nuclear plants have high shutdown costs because the reactors
cannot be re-started for 3 days after a shutdown.
²  Inflexible nuclear units must bid large negative prices into the
auction market to ensure they keep running.
²  However, during very low demand or strong wind periods this can
result in very large negative market clearing prices.
²  This has alleviated to some extent now that Bruce Power and wind
and solar plants begin to load following at a slight negative price.
15 Wind and the Electrical Grid -­‐ OSPE Study Findings Why Hydro Quebec’s Storage Cannot be Used ²  There are technical and economic reasons why Quebec storage is
not available for Ontario use.
²  Ontario will need about 7,000 MW of storage to effectively
integrate 10,000 MW of wind and solar generation.
²  The present tie-lines to Quebec are limited to 2,000 MW.
²  To utilize storage we need to both store (send) energy during low
demand periods and later receive energy during peak demand.
²  Storing energy is easier - water is held back at Quebec’s dams.
²  Receiving stored energy during peak hours is a problem because
Quebec’s dams have not been sized to supply both Quebec’s
peak load and at the same time to return Ontario’s stored energy.
²  Cost to upgrade the transmission lines and dams is prohibitively
costly.
16 Wind and the Electrical Grid -­‐ OSPE Study Findings Addi,onal Wind Genera,on Can Increase GHG Emissions ²  Hydroelectric and nuclear generation do not emit GHG’s.
²  Prior to the new dispatching rules for wind and solar that were
implemented on Sept 2013, inflexible nuclear units had to be
shutdown during periods of low demand and strong wind.
²  Nuclear shutdowns last 3 days. So for the subsequent 2 days after
the wind subsides you need to back up the lost nuclear and wind
output with natural gas which emits 400 kg of CO2 per MWh.
²  IESO estimated a nuclear shutdown strategy to manage surplus
generation will result in $180 - $225 million in extra fuel costs and 1.6
to 2.0 million tons of CO2 emissions in 2014 alone (IESO FPFG, Jan
24, 2012, SE-91 Renewables Integration presentation).
17 Wind and the Electrical Grid -­‐ OSPE Study Findings Low GHG Emissions Impossible Without Nuclear ²  Ontario has negligible remaining amounts of cost effective storage,
hydroelectric, bio-energy, and geothermal capacity.
²  Wind and solar do not emit CO2 but they need a backup source for
periods when the wind and sun are not available.
²  Gas fired generation is currently the backup supply of choice in North
America due to low gas prices of $4 per million BTU.
²  However, gas fired generation emits 400 kg of CO2 per MWh.
²  To achieve low GHG emissions you need a zero GHG emitting backup
for wind and solar.
²  Flexible nuclear plants are the only economic zero emitting technology
available to Ontario at present. Storage is still much too expensive.
18 Wind and the Electrical Grid -­‐ OSPE Study Findings Low GHG Emissions Impossible Without Nuclear ²  Solar has only a 13 to 15% capacity factor and wind has only a 30%
capacity factor. The grid has a 63% capacity factor. The
difference must be made up by gas fired backup generation.
²  A wind-gas powered grid emits about 200 kg of CO2 per MWh.
²  A solar-gas powered grid emits about 300 kg of CO2 per MWh.
²  Ontario is currently operating at about 80 kg of CO2 per MWh
thanks primarily to hydroelectric and nuclear generation.
²  If we used flexible nuclear plants with load following capability to
back up wind and solar we could drive emissions even lower, close
to zero kg of CO2 per MWh.
19 Wind and the Electrical Grid -­‐ OSPE Study Findings The Economic Impact of Load Following (Dispatching) ²  The real “all-in” cost to supply additional demand is the levelized
cost of electricity (LCOE). LCOE is the total cost of production
divided by the energy produced by that plant during its life.
²  Capacity factor has an enormous impact on LCOE.
²  LCOE is not the wholesale market price (HOEP) nor the retail price
of electricity (TOU).
²  Our retail prices for electricity overcharge for base load energy and
undercharge for peak load energy.
²  This discourages demand at night and encourages demand during the day – the opposite of what the grid needs to operate efficiently. ²  This encourages poor u,liza,on of the grid (lowers the capacity factor) and increases the cost to produce electricity. ²  Energy policies that improve grid capacity factors will help lower
electricity costs and GHG emissions.
20 Wind and the Electrical Grid -­‐ OSPE Study Findings Why We Don’t Like to Dispatch Solar & Wind Gen’n Abbrevia:ons: ²  LCOE = the levelized cost of electricity = total life:me costs divided by energy produced. ²  DF = discount factor ²  CCGT = Combined Cycle Gas Turbine ²  M.BTU = Million Bri:sh Thermal Units ²  CF = Capacity Factor 21 Wind and the Electrical Grid -­‐ OSPE Study Findings Summary ²  We need to include engineering considerations into the
development of energy policy.
²  We need to better integrate our renewable generation sources to
avoid wasting their environmental benefits.
²  In the longer term we need to:
²  manage demand to align be4er with available supply (smart grid). ²  improve electricity pricing to encourage be4er grid asset u,liza,on. ²  improve nuclear flexibility (load following) to reduce GHG emissions. ²  incorporate storage where it is cost effec,ve. 22 Wind and the Electrical Grid -­‐ OSPE Study Findings Ques:ons ? Notes: This presenta:on can be downloaded hUp://www.ospe.on.ca/chappres
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