Sioshansi F.P. Smart Grid: Integrating Renewable, Distributed & Efficient Energy
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enhanced by the new technologies of the smart grid, but there
is a huge amount of work to be done to realize the potential.
For those of us working at the CAISO these are exciting
times. The authors of this chapter span the whole range of
CAISO core functions, from smart grid strategy and
implementation (Sanders), to grid operation and spot market
performance (Rothleder), to market redesign and
infrastructure planning policies (Kristov). We see state
environmental policy as the main driver of the transformation
of the supply fleet, while smart grid and other new
technologies such as energy storage provide the means to
achieve the environmental goals. At the CAISO this means
undertaking several parallel initiatives to facilitate and
prepare for the new world, while maintaining through
cross-functional collaboration a view of the big picture that
reveals how all the changes interact and all the pieces fit
together.
Acronyms
AGC Automatic Generator Control
CMRI (ISO
Application)
CAISO Market Results Interface
DNP Distributed Network Protocol
DR Demand Response
DRS Demand Response System
DSA Decision Support Applications
EMMS Enterprise Model Management System
EMS Energy Management System
EPDC Enterprise Phasor Data Concentrator
GIS Geographic Information System
HTTPS Hypertext Transfer Protocol Secure
IEC 61850 International Electrotechnical Commission
LMP Locational Marginal Pricing
NAESB North American Energy Standards Board
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NASPI North American SynchroPhasor Initiative
OASIS
Organization for the Advancement of Structured
Information Society
OASIS (ISO
Application)
(California ISO) Open Access Same-Time Information
System
OpenADR Open Automated Demand Response
PDC (Synchro) Phasor Data Concentrators
PEV Plug-In Electric Vehicles
PMU (Synchro) Phasor Measurement Unit
PV Photovoltaic
RIG Remote Intelligent Gateway
RTDMS Real-Time Dynamics Monitoring System
SCADA Supervisory Control and Data Acquisition
SIBR (CAISO
Application)
Scheduling Infrastructure Business Rules
SOAP Simple Object Access Protocol
VSA Voltage Stability Analysis
WECC Western Electricity Coordinating Council
WISP Western Interconnection Synchrophasor Project
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Chapter 7. Realizing the Potential of
Renewable and Distributed Generation
William Lilley, Jennifer Hayward and Luke Reedman
Chapter Outline
Introduction 161
Modeling Approach 165
Modeling Framework 165
Scenario Definition 169
Results and Discussion 172
Modeling Results 172
Value of Potential Benefits 180
Conclusions 181
References 182
Smart grids provide a mechanism to help unlock the economic, social, and environmental benefits that
might be realized through more efficient use of large centralized renewable generation and the
deployment of renewable and non-renewable resources located near the point of use Economic
analysis suggests that the savings from allowing greater use of intermittent resources are large and may
well cover much of the costs in developing smart grid technologies These benefits are additional to a
number of other potential benefits already identified for smart grids, including increased system
security, enhanced consumer interaction, and improved power quality
Renewable energy resources, climate change, scenarios
Introduction
In a traditional network such as the one shown in Figure 7.1,
electricity is produced by large centralized plant located
remote to the user. These plant typically convert energy
contained in a fuel (e.g., coal, gas, or nuclear material) into
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electricity via some form of spinning machine, typically a
turbine. The output from these prime movers is fed to a
generator, which develops electricity at low voltage. This
electricity is then converted to a high voltage for efficient
transport through the use of a step-up transformer. The
electricity travels through the transmission network toward
the end-user at high voltage to reduce losses. When the
electricity nears major load centers (e.g., a town), it enters the
more widely spread distribution network for transport to
numerous end-users. When entering the distribution network
the voltage is brought to a lower voltage level by a step-down
transformer. This step might typically occur a number of
times before reaching the final consumer.
Figure 7.1
A simplified view of electricity generation and transfer.
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Source: CSIRO
Typically the amount of power produced by a given plant is
determined by a central control authority or market operator.
In Australia's eastern states, for example, this is the Australian
Energy Market Operator (AEMO). In the United States,
market operators are called independent system operators
(ISOs) or regional transmission organizations (RTOs).
1
These organizations control the dispatch of power to meet
system-wide demand. Dispatch takes into account issues such
as scheduled outages, power flows including losses, the price
offered by each generator for supplying electricity, and a
prediction of aggregated demand. The system is then
balanced through small changes to dispatch and ancillary
services, which control frequency and voltage.
1
Chapter 6 describes CAISO, and Chapter 17 describes PJM.
Because these large centralized plant are being fed a
consistent source of fuel, their output is readily controlled and
predictable. In response to concerns about climate change as
well as fuel diversity, energy security, and a host of other
reasons, there is a movement toward bringing large renewable
generators into the supply system. These systems are typically
connected where there is a good natural resource and where
there is access to the high voltage transmission system or
higher voltage sections of the distribution network. A number
of these renewable generators operate by capturing a source
of energy, which is variable by nature, for instance the wind
or sun. As a consequence their output is less controllable and
less predictable; hence these plants are referred to as
intermittent renewable generators. Because their output can
vary, their use can be problematic for the finely tuned
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electricity system, which must balance supply and demand
within quite stringent limits.
The rise in electricity prices in many developed countries has
been driven by expenditure on distribution networks to meet
growing demand from large consumer devices such as air
conditioners. The use of this equipment can lead to large
demands on supply at certain times of the year, in this case on
very hot days. The network must be rated to meet this large
demand that typically occurs on only a small number of days
per year. In response to rising prices to deal with this demand,
there has been a trend toward the introduction of measures to
better understand and control demand and to provide local
supply to avoid transmission and distribution losses. This
local generation is referred to as distributed generation (DG),
also often referred to as embedded generation.
The introduction of DG into a distribution network poses
potential problems to a system essentially designed to cater to
one-way flow from large centralized plant located in remote
locations to the end-user far away. These new two-way flows
need to be measurable and controllable to ensure that issues
around safety and performance are not unduly affected by the
use of DG.
Adapting the way in which energy is used and supplied is a
major challenge facing the world's economies as they attempt
to reduce emissions in response to climate change and to
reduce large expenditures in the supply and transfer of
energy. Ensuring that new sources of energy supply and
management can be integrated with existing technical and
economic frameworks is a challenge being addressed through
the emergence of smart grid infrastructure and control
techniques, including intermediary steps such as minigrid
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architecture, further described in Chapter 8. In this chapter the
results of a modeling analysis are provided that considers the
value that smart grids may provide by enabling the increased
use of intermittent renewable and distributed generation.
As smart grids represent a new and evolving way in which
energy is generated and delivered, the cost and benefits are
yet to be well characterized. Programs such as Smart Grid,
Smart City in New South Wales, Australia
(http://www.ret.gov.au/energy/energy_programs/smartgrid/
Pages/default.aspx), and SmartGridCity in Boulder, Colorado
(http://smartgridcity.xcelenergy.com/), have been developed
to explore these issues and report outcomes to industry and
the wider community. In other studies such as a recent report
by EPRI [1], efforts have been made to quantify at a high
level the potential cost and benefits associated with smart
grids.
In the case of EPRI's report, the major benefits considered
are:
• Allowing direct participation by consumers;
• Accommodating all generation and storage options;
• Enabling new products, services, and markets;
• Providing power quality for the digital economy;
• Optimizing asset utilization and operation efficiently;
• Anticipation and response to system disturbances;
• Resilience to attack and natural disaster.
However, as can be seen in Figure 7.2, the benefits associated
with changes to the development and use of centralized and
distributed generation were outside the scope of their study.
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Figure 7.2
Modeling scope for EPRI cost/benefit analysis of smart grid in the United
States; the dashed line represents the components of the energy sector in the
scope of the EPRI study [1].
Source: EPRI [1]
Potential changes that may be required by the smart grid to
deal with intermittency include:
• Better forecasting techniques for grid-connected wind and
solar generation (e.g., the Australian Wind Energy Forecast
System [AWEFS] in Australia and AEMO [2]) to allow
more accurate dispatch of supply to match demand;
• Better control of the output of intermittent renewable
generators to constrain plant ramp rates, that is, the rate in
which output varies (e.g., the semi-scheduled rules within
the Australian National Energy Market; AEMO [3]);
• The use of storage including electric vehicles (see
Chapter 5, Chapter 18 and Chapter 19) to increase revenue
earned by renewable generators;
• The adoption of new architectures such as mini grids (see
Chapter 8) that can provide local areas with high
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penetration of intermittent generation through a
combination of sophisticated control of generation devices
and demand.
This chapter attempts to put a value on the benefits of a smart
grid on a global scale. The analysis posits that greater
amounts of renewable and distributed generation can be
facilitated by a smart grid. Previous studies such as EPRI [1]
do not estimate the benefits of a smart grid on the integration
of renewable and distributed generation. This chapter presents
modeling of the global electricity sector to examine the
impact of intermittency constraints on renewable generation.
Varying this constraint in the model is a means to estimate the
potential benefits of a smart grid in facilitating greater
deployment of renewable generation.
Section “Modeling Approach” presents the methodology of
the economic modeling. Section “Results and Discussion”
presents results and discussion of the modeling. Finally,
section “Conclusions” provides conclusions resulting from
the analysis.
Modeling Approach
The modeling in this chapter complements the approach used
by EPRI [1] in their U.S. study by examining—using simple
assumptions—the economic benefits derived from increasing
levels of intermittent distributed and renewable generation in
the grid over a long time frame. In the context of increasing
global electricity demand, there are numerous supply-side
options that may become economically feasible over time.
The model assumes that smart grids will allow increasing
levels of intermittent renewable and distributed generation
into electricity networks. Prior to discussion of the scenarios,
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