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Welcome to the world of excess solar and “free” electricity

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For some time, pundits have been saying that with so much variable renewable generation flooding the electric power sector, wholesale prices will plummet and go negative with increased frequency and duration.

And that is precisely what is happening with regularity in Texas with roughly 19 GW of wind, or Germany, which has roughly 80 GW of mostly wind and solar, or California, which has nearly 19 GW of solar. Denmark, of course, frequently gets more wind than its total load.

Even not-so-sunny UK now gets episodes of solar generation dwarfing its traditional heavy reliance on coal. Ditto for South Australia and Queensland or the Iberian Peninsula. China and India, both countries with massive new investments in wind and solar are also finding that they don’t have sufficient transmission capacity to deliver the rising renewable output to major load centers.

Welcome to the brave new world of plentiful, variable, zero marginal cost renewable energy, By all indications – we ain’t seen nothing yet (see Box below).

When there is more renewable generation than load, of course, prices go negative – which means that the grid operator will pay to get rid of the excess generation.

As reported in the Los Angeles Times (22 June 2017), the California Independent System Operator (CAISO) has been doing precisely that. Which means neighboring states of Arizona, Nevada and others farther away are getting paid to take up some of the excess juice when there is more solar energy on the network than can be used within California.

EEnergy free solar

With an attention-grabbing title California invested heavily in solar power. Now there’s so much that other states are sometimes paid to take it, the LA Times reported:

“On 14 days during March, Arizona utilities got a gift from California: free solar power.”

“Well, actually better than free. California produced so much solar power on those days that it paid Arizona to take excess electricity its residents weren’t using to avoid overloading its own power lines.”

More sun than demand

More sun than demand

“It happened on 8 days in January and 9 in February as well. All told, those transactions helped save Arizona electricity customers millions of dollars this year, though grid operators declined to say exactly how much. And California also has paid other states to take power.”

As states like Hawaii and California, among others, move towards higher renewable targets – 50 to 100% – by 2045 – expect more such news headlines. Moreover, as described in the article on page 20, the debate about how much renewable is enough in the energy mix is heating up as states ratchet up their targets.

But beyond transmitting the excess generation elsewhere – assuming there are adequate capacity on the network to do so – retailers and distribution companies are beginning to pilot novel experiments where customer can get free electrons when they are cheap and plentiful. An example of this is offered by Sonnen, a German energy storage and management company in Australia.

Rising RPS targets

Rising RPS targets

The issue of what to do with the excess variable renewable generation, of course, is one that requires more fundamental, sophisticated and sustainable solutions, which can be scaled-up as the problem grows. The obvious solutions – no single one will suffice – include:

  • Bigger geographical footprint to diversify the type and time of generation from various forms of renewables – many of which are uncorrelated and/or those which are controllable or dispatchable such as hydro with storage;
  • More storage – a broad spectrum and diversity of which will be needed to cover a range of needs from milliseconds to hours, days, weeks or months;
  • More transmission lines allowing trading with neighboring countries and states on different time zones and with different load patterns; and of course
  • More flexible demand, or price responsive demand, which can follow variable generation while taking advantage of spikes and dips in prices.

All of these options, and much more, will be needed and not a day too soon.

Source: EEnergy Informa. Reproduced with permission.  

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  • trackdaze

    Given the duck curve any storage that shortens the neck or cuts the head off would be a boon

    • Mike Shurtleff

      Clearly battery storage can do that job now. Cost keeps falling. Daily cycling of power is good match to lithium ion batteries, with several other battery technologies also in competition. That’s the easy one to solve …now.
      Several days, weeks, and months of storage duration are harder to do cost effectively. Hydro and pumped hydro? CCNG? Bio-fuels? Syn-fuels?

      • Malcolm Green

        Hi Mike, I have read that reducing boron oxide to boron is a very good way of storing energy for longer term. Then when the boron is oxidised at a later stage for energy release, the boron oxide is totally recaptured as it is a solid at fairly high temperatures, thus it is a closed loop. And boron salts are abundant in the ocean …

  • Thanks Perry,
    Have been pondering this for a number of years:
    http://www.wattclarity.com.au/2016/04/what-happens-when-energy-is-free/
    What business models work, in that environment (for instance)
    Paul

    • Paul,
      Some technology solves a couple of problem including this one.

      Electricity demand on the hottest days of the year is nearly double that of the average for the year. Providing excess capacity for these occasions has created high electricity prices. The high prices are caused by the cost of the investment that is idle, and earning nothing, most of the time.

      Having solar and wind generators, and storage, to supply maximum demand on a few days of the year means it is inevitable that there will be excess electricity supply on most days of the year.

      Excess electricity can be converted into chemical fuels and exported to replace Australia’s fossil fuel exports. The plants that manufacture chemical fuels can be configured to adjust electricity consumption so they consume all excess electricity.

      One technology that does this developed by Sunfire in Germany is able to be quickly ‘reversed’ – it can generate electricity from chemical fuels so it can contribute to meeting peak demand whenever there is a shortfall in wind and solar generation.

  • brucelee

    Why not curtail rather than pay others to take it?

    • Andy Saunders

      Still get LGCs, makes it economical to avoid curtailment down to minus $80 or so in NEM at moment.

    • DJR96

      Keep in mind that it isn’t an overall excess generation. The “excess” is only as the market sees it. We all know wind and solar doesn’t cost anything to generate because the “fuel” is free. But for coal-fired generators, despite always having a cost to run, they too can have negative prices because they don’t want to shut down completely for just a few hours. Big thermal plants simply don’t work that way. So it would cause them financial pain.

      But why curtail “free” energy. Someone may as well use it to some benefit.

      It’s also a good example of why off-peak hot water systems shouldn’t be on just a dumb timer. They could be turned on to use some of the “excess” power.

      • Makes pumped storage hydro look attractive.

    • Hettie

      Put a box around the sun? Stop the wind?

  • Mike Westerman

    I don’t think we have even seen the start of price sensitive demand moving. I know that bulk water companies are already do so, by building more intermediate tanks and pumping when prices are low. Thermal storage may come to the party slower, particularly in cooling dominated areas since self generation to suit your load is cheap and easy in the first instance.

    Obviously electrification of the transport sector is going to make a big difference, as then we will have a largely curtailable load with a largely predictable but variable supply.

    • Tom

      Actually, we have seen the start of it. Check this screenshot from a windy day in SA: https://uploads.disquscdn.com/images/be1b292918b3a82238267e1d7bbe904a5cba4c8cacb6ee7cd2ae1ad4f9d08604.png

      The interconnectors to Victoria were flooded, and there was still more power than SA could deal with.

      • Mike Westerman

        I was referring to demand moving significantly to take advantage of excess supply. So far the only major consumer doing so is SA Water. But I expect to see other industries that are energy intensive start to set up their production around cheap daylight energy prices.

        • Tom

          Fair call – we’re pretty hopeless at demand management. Industry is the worst.

          Imagine if aluminium smelters could triple their production at the flick of a switch when prices were ultra-low, and desalination plants could pour water out of their filters, etc.

          • Mike Westerman

            Indeed…high rise buildings with basements full of chilled water instead of car, which have disappeared, displaced by TAAS.

  • DJR96

    This sure highlights the need for storage. Solves all issues.

  • Mark Roest

    Re “When there is more renewable generation than load, of course, prices go
    negative – which means that the grid operator will pay to get rid of the
    excess generation.”
    When batteries are US$100/kWh and last 10,000 cycles (probably by 2021), simple levelized cost of storage will be about US1 cent per kWh. it will pay to put up sufficient battery storage to sop up all the excess supply. The next generation of batteries will probably work just (or nearly) as well storing for a month as for a minute.
    That should keep costs at least positive.
    The next step is to rethink pricing, from a whole systems point of view. The issue is not really what someone can trick someone else into paying. The issue is really what is best for society, and that is obviously to provide stable, cheap energy, 24/7/365,dd after paying off the financing to get to that point.
    The savings to society as a whole (in Australia, the savings to everyone but the gentailers), can be used to pay for making the rest of society resilient to climate disruption, to suck CO2 out of the atmosphere in benign ways, clean up the fossil and nuke messes, and to make people prosperous and healthy.

  • Ian

    Like a fractal image, as in the micro scale so in the macro scale . House holds are wise to over-build their solar rooftop resource to accommodate bad days, so too are states and countries. Of course there will be excess supply sometimes, it’s overcompensation for cloudy,windless days.

    We obviously need to decarbonise transportation , have demand response and store ‘electrons’ for a CWD. Batteries are expensive, in desperate need of support and subsidy. The solution is so expletively obvious – give away excess electricity generation to those with EV, and home battery storage, in fact pay them to take it , and then pay them more to give it back at peak demand times.

    • solarguy

      How could I not agree about over sizing PV as that is exactly what I have done with my system. On the rest I will have to have a bit of a think. Off to see Al Gore’s new movie now.

    • Ken

      And how would you manage all these small and fragmented loads that are required to soak up excess energy when its available ?
      Home batteries are easy as they are static ( they stay at home) but what about all the EVs ?
      its either going to be as easy as herding sheep or as difficult as corralling kangaroos.
      Maybe run it all by an App or txt message system to alert you that free electrons are available and to plug into the nearest outlet near you ?

      • Mike Westerman

        Ken – if you’ve ever watched the doors open on a Myer sale you will realise price signals can be very good at “herding the cats”.

        • Ken

          Thats just herd mentality isn’t it ?

          ‘Why are you lining up outside Myer before the doors open?”
          “Dunno, I just saw everyone else doing it so I thought it must be important”

          We should embrace Minimalism.
          Minimalism should be the new black.

      • Ian

        You don’t have to dispose of the excess energy besides giving it away. If there is still excess, just curtail the windmills or solar arrays in the usual fashion. The point is that all that free juice can be offered to those that can store it in batteries or EV purely as a cost-free incentive. Any electricity over-spill, well too bad.

  • Caffined

    Excess solar power ?
    Most of it from PV farms ?
    Many of those with “tracking” ?
    Why pay someone to take the excess ?
    Just reposition the panels to limit the output for a while.
    …..where is the problem ?
    Wind farms ?….they can me easily adjusted too.
    But really…build more pumped hydro.

    • solarguy

      With PV, they can just turn inverters off. Or turn off parts of the Array.

      • Caffined

        I Suspected there would be a big red dial for that somewhere..
        But any idea why they prefer to pay to have it offloaded, rather than turning down the dial ?

        • solarguy

          No I don’t understand that.

          • Ken

            This also happens locally in WA on rare occasions.

            The reason for the negative spot market price is due to base load ( coal fired) generators bidding to stay online rather than shut down for a short time before starting back up when the bidding improves 🙂

            They prefer to pay a bit for a few hrs rather than come offline,, and make up the cost shortfall once they are getting paid to generate again.

          • Mike Westerman

            And on the NEM the high price of gas generation has meant that the sums work out. What worries the coal generators is that more and more solar and wind means the period of low to negative prices is a greater proportion of the day, and they can see the time coming when the high priced periods only outweigh the low cost periods during summer. And the thought of pumped hydro decimating the high priced periods would put many out of business.

          • Ken

            Yes, Yes, Yes, and Yes.
            Coal generation would have to be marginal right now at best.
            Regardless of low cost of the fuel,, the operational and maintenance costs are horrendous compared to static generation such as solar with batteries.

            As this progresses and more solar gets connected to the network the need for storage becomes more and more important.
            We are now only focused on big battery solutions and disregarding the solar component.
            Let others install the solar farms and just buy the output when the price is attractive, or spot market prices are low/negative.

          • Ian

            Well, yes, them’s the breaks for coal. Tough lumps of coal. That’s why these generators bleat so loadly about intermittent generators. If coal is viable only if run 24/7 and if solar takes an 8 hour chunk out of its load -profile then coal’s cost goes up by about 50%. That’s the beauty of renewables, you don’t have to match MWH to MWH produced, you only need to duck-curve their load resource to put them out of business.

          • solarguy

            Thanks Ken. So it seems more storage is in order as well.

          • Ken

            Yes more storage and large scale grid connected storage.
            At this stage that seems to be batteries but all forms of storage is the go.
            Load shifting, peak lopping, smoothing out the overall load demand curve.

          • solarguy

            I’ve been trying to get the big picture through for a while now on storage and 100%. The way we will succeed is with the right balance of generation and storage. As you and others may already know, my house, while still connected to the grid (and earning me money to do so) is for all intents 100% RE. I get a credit on my power bill, now if I can do that on a household level, then the whole bloody country on a grid scale, can do that and better.

            Because I design and install grid and off grid PV systems for a living, I’m very aware what can be done. Andrew Blakers idea of PHS, is worth a lot of merit for large scale storage and I think it will turn out to be they main way to go for most of OZ.

            Your serve.

          • Ken

            The problem with doing it on a grid scale to support the whole grid is that you have to consider additional parameters.

            The grid master is primarily concerned with balancing the supply and demand of MWs as well as MVar s.
            The grid is inherently capacitive and load is typically inductive.
            Generators need to be able to deal with both ( generate and absorb MVars).

            MW mismatch shows up as frequency deviation.
            MVar mismatch shows up as voltage deviation.
            In between you have loss of generation incidents and load rejection incidents along with network faults of various types that impact the network differently.

            A lot of the generation and storage devices connected to the network just give up and don’t respond or trip off to protect themselves during these various conditions.
            This compounds the condition and the network can then cascade into total failure ( blackout).

            In short, its easy to set yourself up as an island at a domestic or commercial sitaution as you can manage your small loads and even shut down non essential loads ( pool, toaster, water jug,storage HWS system, stereo and TV ) and just maintain essential supply to the important ccts ( lights, beer fridge).
            You can run off your battery till the BMS tells you to back off, or cuts in your Honda genset to backup the battery and keep the beer fridge going.

            I think the solution is to get the IoT to get all these devices communicating to link big storage with little storage, as well as to manage load and shed it if required, so that the grid remains stable till it can be rebalanced.

            Fault,,, Let… First Service.

          • Ian

            It seems that coal generators cannot just ‘free-wheel’ against an open circuit, they need a load to remove energy generated by burning coal. The coal furnace cannot be stopped and started at a moment’s notice. These types of generators have to run “24/7″, Baseloading regardless of demand. So Ken’s comment makes a lot of sense when the problem is coal generation. Renewables are different fundamentally :

            Solar arrays can be curtailed simply by breaking the circuit, wind can be curtailed by ?changing the pitch of the blades. Perhaps someone with experience in wind turbines can answer this question more definitively: How can electricity production from windmills be curtailed when the wind resource is at optimum speed?

            So much has been talked about regarding ” spinning reserve” and “frequency control” this usually implies the ramping up situation, when demand increases, but what about the situation where generation far exceeds demand? Coal cannot easily exhaust steam to equalise its energy equations, but it seems solar and wind can.

          • Ken

            Partly true.
            Steam generators definitely can’t sit there spinning for a long time without being loaded up on the generator. Its extremely wasterful plus they get all sorts of temperature problems across the turbine and generator.
            The operator will TELL you eventually that he is coming off if you don’t allow him to pick up load.
            Coming off means disconnecting from the network, and in that condition where the unit is still hot, it can be reconnected to the network without too much delay.
            They don’t have to run 24 /7 and can reduce their output to minimum levels,, but in that condition they can’t respond to load changes to either pick up load or reduce any more load,, in a hurry. They are typically very slow to respond.

            Frequency control has to go both ways,, ramping up as load increases, or for the loss of any generation,, as well as to reduce for the loss of any load (load rejection or too much unplanned solar or wind living up to its intermittency credentials).

            Spinning reserve is a different kettle of fish, and can utilise a number of sources to provide this reserve including non spinning sources, such as batteries which would probably more accurately be categorised as static reserve. ( unless you have your batteries going round and around). Load curtailment where customers agree to be cutoff can also count towards the spinning reserve calculation.

            For solar and wind,, both generate in DC so have to go via an inverter to convert to AC and connect to the grid. The inverter is controllable and can have its output reduced if required by the control system.
            Trials have been conducted by First Solar in the US to demonstrate that solar /inverters can control frequency and provide grid support.
            The same will apply to batteries as they have a control system which regulates the battery discharge and recharge.

        • Tom

          Possibly because they’re getting subsidies. They might pay $10/MWh for someone to take it but receive $20/MWh of subsidies, meaning they’re still ahead.

      • Ian

        Quite right, just open the circuit and the solar array stops producing electricity. The article must be talking about other issues, perhaps using solar output to attract subsidies, ie $x for yMWH produced as Caffined says, or maybe some sort of PPA where the curtailment problem is further along the supply / transmission chain. Fascinating really, similar to a hydro power plant with an overflowing dam. They are obviously terrified to share the excess with their customers in case their customers curtail their energy use at other times. Keep an artificial shortage and elevated prices at all times so that you can extract as much revenue from your customers as possible.

    • Mike Shurtleff

      “..long term..build more pumped hydro” Yep, and distributed battery storage.