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Yes, solar and wind ARE killing nuclear power, but not killing grid reliability

Are solar and wind really killing coal, nuclear and grid reliability? The Conversation, Joshua D. Rhodes, Postdoctoral Researcher of Energy, University of Texas at Austin, Michael E. Webber, Professor of Mechanical Engineering and Deputy Director of the Energy Institute, University of Texas at Austin, Thomas Deetjen, Graduate Research Assistant, University of Texas at Austin, Todd Davidson, Research Associate, Energy Institute, University of Texas at Austin May 12, 2017

Some energy analysts responded with confusion, as the subject has been extensively studied by grid operators and the Department of Energy’s own national labs. Others were more critical, saying the intent of the review is to favor the use of nuclear and coal over renewable sources.

So, are wind and solar killing coal and nuclear? Yes, but not by themselves and not for the reasons most people think. Are wind and solar killing grid reliability? No, not where the grid’s technology and regulations have been modernized. In those places, overall grid operation has improved, not worsened………

Wind and solar are making older generators less viable because their low, stable prices and emissions-free operation are desirable. And they aren’t hurting grid reliability the way critics had assumed because other innovations have happened simultaneously…….

How do renewables affect the bid stack? Renewable sources such as wind, solar and hydro have no fuel costs – sunlight, wind and flowing water are free. That means their marginal operational cost is near zero; the cost is essentially the same to operate one megawatt of wind as compared to the cost of operating 10 megawatts of wind since generators don’t need to buy fuel. That means as more wind and solar farms are installed, more capacity is inserted at the cheapest end of the bid stack.

This insertion pushes out other generators such as nuclear, natural gas and coal, causing some of them to no longer be dispatched into the grid – that is, they don’t supply power into the grid (or get paid). So as more renewables are installed, power markets dispatch fewer conventional options. And, because the marginal cost of these new sources is almost free, they substantially lower the cost for electricity. This is great news for consumers (all of us) as our bills decrease, but bad news for competitors (such as coal plant owners) who operate their plants less often and are paid less when the plants do operate.

What does all this mean? Natural gas and renewables are affecting coal in two ways. Natural gas is a direct competitor with coal because both can be dispatched – turned on – when a grid operator needs more power. That is helpful for grid reliability. But, as the cost of natural gas has fallen, coal has become less competitive because it is cheaper to operate a natural gas power plant.

The effect of renewables is slightly different: Wind and solar power are not dispatchable, so they cannot be turned on at a moment’s notice. But, when they do turn on, during windy evenings or sunny days in Texas, they operate at very low marginal cost and thus operate very competitively.

Research at UT Austin shows that while installing significant amounts of solar power would increase annual grid management costs by $10 million in ERCOT, it would reduce annual wholesale electricity costs by $900 million. The result of all this is that renewables compete with conventional sources of power, but they do not displace nearly as much coal as cheap natural gas. In fact, cheap gas displaces, on average, more than twice as much coal than renewables have in ERCOT.

What about nuclear?

Nuclear’s problems are largely self-inflicted. In short: The price to build nuclear is high, so we don’t build many nuclear plants these days. Since we don’t build, we don’t have the manufacturing capability. Since we don’t have the manufacturing capability, the price to build nuclear is high. Since the price to build nuclear is high, we don’t build nuclear these days…so on and so forth.

Today, cheap gas, having already beaten up on coal, is a threat to new nuclear power plants and less efficient, older plants. New natural gas combined cycle power plants can be built for about one-sixth the cost of a new nuclear plant, is almost twice as efficient and you can build them in smaller increments, making them easier to finance.

Market innovation and IT can fix reliability

Because wind energy comes and goes with the weather, it makes grid operators nervous. But wind forecasting has improved dramatically, giving more confidence to those who need to keep the lights on.

And, interestingly enough, the requirements for reserve capacity (backup power for when wind power dips) to manage the grid smoothly went down, not up, over the past few years in Texas, despite rapid growth in wind during Governor Perry’s tenure. That is, the costs for managing variability in the grid decreased……….

there is still more to do – information technology coupled with integrated hardware can help. Consider this: There are 7.7 million smart meters in Texas, most of them residential. We’ve estimated that installing 7 million controllable thermostats for just the households in Texas would cost $2 billion. Residential air conditioning is responsible for about 50 percent of peak demand in Texas in the summer. That means about 30 gigawatts of peak demand in Texas is just from residential air conditioners.

By dynamically managing our air conditioning loads – that is, adjusting thermostats to lower overall demand without impacting people’s comfort – we could reduce peak demand by 10 to 15 GW. That means we might not need $10 billion to $15 billion worth of power plants. Spending $2 billion to avoid $15 billion is a good deal for consumers. In fact, you could give the thermostat away for free and pay each household $700 for their trouble and it would still be cheaper than any power plant we can build.

In the end, Secretary Perry has posed good questions. Thankfully, because of lessons learned while he was governor of Texas, we already have answers: despite concerns to the contrary, incorporating wind and solar into the grid along with fast-ramping natural gas, smart market designs and integrated load control systems will lead to a cleaner, cheaper, more reliable grid.https://theconversation.com/are-solar-and-wind-really-killing-coal-nuclear-and-grid-reliability-76741

May 13, 2017 Posted by Christina Macpherson | renewable, USA | Leave a comment