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Rapid renewables growth brings challenges for US states: Part II – Northeast and ERCOT

On a rising number of days each year, some areas of the US have more renewable power than they know what to do with, write Rocco Canonica and Kassia Micek in a two-part series. In this instalment, what's in store for the Northeast and ERCOT region, and what can they learn from California?

California has emerged as a case study for the difficulties power system operators face in the transition to renewables energy. Those challenges, from rapid renewables growth and market penetration, are just beginning to be felt in other regions of the US.

Curtailments are not yet a significant issue in the Northeast, where renewable resources still account for a small portion of the overall power generation fuel mix. However, the New York Independent System Operator already has observed some onshore wind curtailment at certain times in the northern part of the state and anticipates the phenomenon could increase as New York moves toward a zero-emissions power system by 2040.

Go deeper: Rapid renewables growth brings challenges for US states: Part I – California

“Based on the NYISO’s operating experience, there are already high levels of wind curtailment in northern New York,” the market operator said in its 2019 Power Trends report.

The Climate Leadership and Community Protection Act requires 70% of statewide power sourced from renewable energy resources by 2030, 6 GW of installed solar capacity by 2025 and 9 GW of offshore wind power capacity by 2035.

A renewables-heavy market dominated by resources with zero variable fuel costs will depress and flatten location-based power prices, which places greater importance on ancillary services revenues, according to a presentation by PA Consulting given to the NYISO Market Issues Working Group on behalf of the Long Island Power Authority.

The consultants also pointed out that despite limited nameplate wind power capacity in New York of about 2 GW in 2018, the state is already seeing increasing levels of curtailment. For example, the percentage of energy curtailed in the state – measured as the ratio of curtailed energy to total production – was between 1% and about 3% from December 2018 to December 2019, according to the grid operator’s December Operations Performance Metrics Monthly Report.

ISO New England also appears to be experiencing limited instances of renewable energy curtailment, primarily from onshore wind plants, due to transmission system constraints or economic decision-making on behalf of the plant owners. However, renewable energy curtailment is not mentioned in the market operator’s 2020 Regional Electricity Outlook.

ERCOT

With nearly 24 GW of wind capacity, the Electric Reliability Council of Texas has seen the most wind power development in the US and is beginning to see an increasing push to add solar generation as well, driven by tax credit availability rather than a state renewable portfolio standard, which is surpassed long ago.

As tax credits phase down and transmission congestion drives down prices, generation additions could slow, but wind capacity is currently projected to jump as much as 40% year on year by the end of 2020 to nearly 33,450 MW if all signed Interconnection Agreements are executed, according to ERCOT’s “Capacity Changes by Fuel Type Charts” reports for January. Solar capacity could spike as much as 149% year on year by the end of this year as well and then 105% year on year for 2021.

Ercot renewable generation trend

Battery storage additions are also growing, with 262 MW expected to be added in 2020 to bring the total up to 366 MW and to as much as 568 MW in 2021, according to ERCOT data.

However, curtailments are also on the rise. An estimated average of nearly 500 MW of wind generation was curtailed in January due to oversupply, which was a jump of 87% month on month and nearly three times the level a year ago, according to ERCOT data.

While ERCOT is adding renewable generation, it is shedding thermal generation to the point that very tight reserve margins the past few summers, when demand is the strongest due to rising temperatures, have caused concern. This will be the third summer that ERCOT is projecting a reserve margin below its 13.75% target. In addition to less capacity coming onto the grid, ERCOT is one of the few regions where demand continues to grow with rising population, putting more pressure on the system. But low, renewable power prices are not creating the incentive to build new generation.

With the increase in less-expensive renewables sources comes a decrease in power prices. ERCOT West Hub on-peak real-time locational marginal prices have fallen into negative territory in five out of the last seven years as most wind –  and more recently solar – is added across the sprawling open fields of west Texas. West Hub real-time prices have already fallen as low as negative 3 cents/MWh so far this year, something that typically happens later in the year. In 2016, West Hub real-time prices fell as low as negative $9.68/MWh in Q4.

Preparing for zero-carbon

Cal-ISO is well aware that the rest of the country, as well as the world, is looking at how they manage a growing renewables fleet for cues on what to do in other regions. Many states study California’s actions as an example of how to manage the increase in renewables onto the grid, which is growing ever more important as states increase their renewable portfolio standards and target dates fast approach.

“We know full well what we’re doing here is an example for the national and internationally,” Cal-ISO CEO Steve Berberich told Platts.

Forecasting is the critical factor to making the transition to more renewable generation work on the electric grid.

“You have to change your entire outlook, even from a planning aspect,” Berberich said about the reliability concerns of renewables and the solar ramping. That includes load and renewables generation output forecasts, as well as distributed generation forecasting, Berberich said, adding that getting the necessary generation flexibility is important to fill in any potential gaps.

Cal-ISO recently completed a study in partnership with Avangrid Renewables, the National Renewable Energy Laboratory and General Electric that showed a commercial wind plant with a smart inverter-based controller can provide regulation up and down, voltage regulation control, active power control and frequency response, all important services to maintain grid services, according to an ISO news release. These are services that are currently being provided by conventional sources, including natural gas plants.

With some relatively simple operational upgrades and market redesigns, virtually all wind plants could provide the ancillary services and be compensated for them, creating new markets for renewable resources separate from energy, according to the news release.

“We don’t have all the answers for getting to 100% carbon-free,” Berberich said, adding that storage will be a critical element, and a variety of storage at that. In addition, having a wide geographic area from which to leverage generation resources will also play a major role in balancing generation.


US renewables forecasts and targets

US Renewables: EIA forecasts electric generation from renewables will surpass nuclear and coal by 2021 and surpass natural gas in 2045. Renewables share of the US electricity generation mix is expected to increase from 19% in 2019 to 38% in 2050.

Cal-ISO: California leads the country in renewable generation at an average of about 40%, nearly doubling in the last decade, while renewable curtailments more than doubled year on year for 2019 and reached a record of 223,195 MWh in May 2019.

ERCOT: Wind capacity forecast to jump as much as 40% year on year and solar capacity could climb 149% by the end of 2020. Grid operator forecast 10.6% reserve margin, below the 13.75% target for the third straight summer, as weak power prices from increased renewables diminish incentive to develop new power plants.

NYISO: Observing onshore wind curtailments and expects phenomenon to increase as the state moves zero-emissions power system by 2040. CLCPA requires 70% of statewide power sourced from renewable energy resources by 2030, 6 GW of installed solar capacity by 2025 and 9 GW of offshore wind power capacity by 2035.

US states renewables goals

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