How the Grid Needs to Change to Make Them Play Well Together
By Michael Bauer and Jim Tracey, Sentient Energy Inc.
Today’s electric grid was essentially designed for one-way power flow to end users from bulk generation facilities that encompass baseload plants to peaker plants. In this model, instantaneous demand changes are accommodated through small, temporary frequency adjustments that can be quickly reversed through the appropriate management of bulk generation output. The grid is rapidly changing, however. In just a couple of years, overall capacity of rooftop photovoltaic (PV) generation installed in the U.S. will exceed the total capacity of the Three Gorges Dam in China, the largest bulk-generation plant ever built. In one day during May 2017, rooftop solar exceeded 66 percent of overall peak capacity in the California Independent System Operator (CAISO) market, and electric vehicles (EV) are now projected to makeup over 50 percent of U.S. car and light-truck sales by 2035.
These distributed energy resources (DER) present a substantial challenge to the traditional model. Not only can power flows during on-peak periods reverse for several hours each day, the output from these new sources can also change quickly, potentially causing much more dramatic demand swings for bulk generation than the current system can accommodate. Although inferences can sometimes be made through advanced metering infrastructure (AMI) data, market operators and distribution companies currently have no direct visibility or centralized control over these resources. In the near future, smart inverters and vehicle-to-grid technologies will have to provide more advanced grid-interaction capabilities, while political and contractual hurdles must be overcome to allow utilities access and some form of control. Until this happens, voltage and frequency imbalances are a risk to equipment, personnel and reliability.
figure 1 : How Are DER Different from Bulk Generation for Grid Operator Today?
You Can’t Control What You Can’t See
Unlike larger, utility-scale DER, residential solar and battery-type DER on the distribution grid are not plainly seen by the operator (see Figure 1). They offer no direct control loop or measurement loop. Typically, their presence can be inferred from smart meter data if AMI is present, but they are not directly visible. In addition, they are not dispatchable or curtailable. They do impact and interact with frequency and voltage, but that’s entirely automated and not in any way controlled by the operator.
At times, DER can provide a high contribution to overall generation. Today, this is already the case in places like California and Hawaii. Unlike bulk generation, however, there are no price mechanisms available for DERs, such as minute-by-minute and day-ahead markets. Instead, there are time-of-use rates for solar, EVs and home batteries. Unfortunately, these pricing mechanisms are not dynamic or flexible.
On a high level, DER and bulk generation interact not only on the technical front, but also through pricing and regulatory avenues. The main way that DER and bulk generation directly interact is through second-by-second changes in load demand. This results in system frequency changes rippling across the entire grid until generation catches up. On the pricing side, there are wholesale prices, metering rates and time-of-use rates, among others. On the regulatory side, there are interconnection standards and incentives that various public utilities commissions and public service commissions put in place for end users who wish to use electric cars and install battery systems and solar. These are the main mechanisms where DER and bulk generation interact. Going forward, actions will be required on all fronts to better manage that interaction in a positive way.
Negative Wholesale Prices
In February and March 2017, mild California weather exacerbated the price effects of DER supply in the form of negative wholesale pricing (see Figure 2). This effect is most pronounced on Spring days in areas of high-solar generation but low air conditioning load. As a result, California exported power to other states, including Arizona, and paid those states to accept the excess power. There now may be times when bulk generators cannot sell their power at a profit. Experts expect this phenomenon to continue to grow, clearly showing there is a strong interaction between bulk and DER power that must be managed on the commercial level.
figure 2 : In 2017, California Wholesale Energy Prices Went Negative Due To DER
Smart Inverters Could Help Balance Voltage and Frequency
A smart inverter is one option that will help voltage and frequency imbalances from DERs. Smart inverters can actively regulate voltage as well as change real power in response to frequency deviation, helping regulate voltage and frequency. These inverters are now being mandated, but it will be a while before they see significant penetration. While existing inverters could be updated to have the same capabilities, doing so would require network connection. Most inverters aren’t connected, therefore, it’s safe to assume the benefits of these smart inverters are still a few years out.
The EV Phenomena
Driven by both voluntary and mandated targets, the U.S., China and other developed countries are ramping up EV production at unprescendented rates. China just introduced a mandate that 10 percent of new car sales must be electric by 2019. That will then rise by 2 percent per year. California and seven other states have a 15 percent EV sales target by 2020. Companies like Volkswagen and General Motors are investing billions of dollars in EV research and manufacturing capacity.
Despite all the talk of EVs communicating with the grid, serving as a battery for the grid and being managed by the grid operator, that idea could be overly optimistic. Based on EV charging behavior today, electric vehicles will typically be charged at work, so load will increase early in the day. This peters out as the currently available 40 kWh to 60 kWh systems reach full charge by 10 a.m. to 11 a.m. Then, when folks drive home, they plug them in again and a more pronounced peak occurs on that side of the day. The problem can be exacerbated by the direct current (DC) high-speed charging units that draw a lot of load quickly. These have the potential to generate serious spikes and must be managed on a minute-by-minute basis.
In a low PV-penetration scenario where the service area has less than 10 percent of homes equipped with PV solar, the solar systems start kicking in early in the day. There might be some load drop or reverse power flow that doesn’t extend far out onto the grid because it’s a small part of the grid and a small part of overall capacity. In the middle of the day, it might extend further out on the grid, depending on how much power the homes generate and how much they consume. In this situation, small, local areas of reverse current are created at peak, but they don’t reach all the way to the substation. This can still impact protection schemes, however. Inverters are equipped with anti-islanding functions to protect the grid in case there is a fault. At lower penetration levels, these anti-island functions typically work well. At higher penetrations, the presence of other connected DER can make it hard for anti-islanding to work effectively. As a result, over-voltage, harmonics issues and other problems might occur. Some short-term fluctuations from cloud cover, solar eclipses and other sunlight limitations also could exist, as well as current and voltage imbalance issues between the phases.
In service territories like Pacific Gas & Electric’s or Hawaiian Electric Co.’s where 15 percent or more of peak load is available from rooftop solar, areas of reverse current and imbalances between phases extend all the way to the substation. This creates more comprehensive problems because protection schemes might fail. The inverters can’t necessarily tell anymore that the feed from the substation has failed, so there could be more over-voltages and load imbalances. One example would be a sudden cloud cover change or a solar eclipse, much faster ramp rates will be needed, as well as more frequency support and flexibility to manage through those situations. One result will be negative wholesale pricing because there will be feeds going back out to and past the substation. A number of tools are available to manage these situations, but those tools must be in place and ready to respond.
All this together creates a monster challenge (see Figure 3). In some parts of the grid, there will be short, substantial load spikes from cloud cover and DC fast chargers that can impact voltage and frequency at any time. In other parts of the grid, there will be reverse load to the substation and beyond. A current protection approach might be in place, but it is likely incomplete and will leave work crews and the public at potential risk, while creating the potential for negative wholesale energy prices. In addition, over voltages can occur. Voltage and current imbalance between phases leads to increased wear and tear on transformers and other equipment. Furthermore, record load demand that ramps up in the late afternoon and when electric cars start charging at sunset, can send load demand into overdrive.
figure 3 : A MONSTER CHALLENGE
Real-Time Visibility is the Key
The real key to safe, reliable interaction between bulk power and DER is detailed, real-time visibility into the distribution grid. It’s hard to keep crews safe and manage the grid successfully without knowing where currents are reversed, where voltages are still present after an outage event, or why a substation breaker is open, but some inverters haven’t disconnected. Without knowing the locations of current flows, imbalances also are unknown. That means DER utilization can’t be optimized. This is why utilities in Hawaii and California are adopting a wide variety of sensors throughout the grid to monitor and measure load direction and power quality.
Sensors, and the analytics to interpret sensor data, are today’s most important tools to optimize power utilization, quality, safety and reliability. Unlike computer models, sensors provide real-time data based on real measurements from the grid, not extrapolations from assumptions that can result in inaccurate projections. In essence, the distribution grid is transforming into one big power-generation facility. You would be hard pressed to find a bulk power plant operator who wouldn’t want accurate, real-time visibility into every part of the facility.
Combining Peaker Plants with Storage
One technical approach to integrating DER and bulk power that is gaining traction is large-scale, utility-owned storage to support solar integration and frequency regulation. Regulating frequency within a tighter band can help smooth out the volatility you get from solar and electric vehicles. The present cost of storage, however, is still commercially challenged outside of those locations where demand response and congestion charges are high. The storage industry is racing to solve this problem.
Some utilities, like Southern California Edison, are now combining peaker plants with batteries. This is another method that can be used to regulate frequency and smooth out the volatility coming from DER. These facilities rely on batteries while powering up the peakers, resulting in substantial reductions in peaker startup costs. A generator can often avoid starting the peaker altogether and simply serve the entire load from the batteries. Experience shows it is possible to use batteries to reduce peakers’ overall run time by 60 percent, reducing wear and tear as well as pollution.
Balancing Power Flow through Interconnections
When solar power giant Germany experienced a 74 percent solar eclipse in 2015, it managed the higher ramp rate via interconnections with several other countries around it. It drew power from those countries during the eclipse, and exported the excess solar power as soon as solar generation ramped up again. This is fundamentally the same as the interconnected imbalance market that is being established in the Western region by CAISO and other participants. These interregional energy transfers will be important to relieve over and under supply conditions across the West Coast.
Show Me the Money
To optimize the interaction between bulk power and DER, sufficient pricing, commercial and technical mechanisms to manage electric vehicles and other battery storage to help flatten the load curve will be needed. This will require incentives to both deploy these DERs and make them dispatchable in some form. The static time/pricing models that are prevalent today will not provide sufficient incentives to make this happen. The industry must transition to dynamic time-of-use pricing, which must be completely automated to be effective because consumers can be slow to react to price signals.
Demand response will continue to play an important role in balancing the grid—especially demand response that’s targeted to heavy power users such as water pumps, cooling and heating that can be controlled in a more time-flexible manner. Precooling of industrial commercial facilities has been used successfully for some time, whereas demand response programs for the general public have largely had limited appeal and effect due to the high cost of information processing to and from a large number of small loads. Demand response will be an effective tool up to a certain percentage of peak load. It needs to be targeted at the right participants, however. Those who can effectively and profitably participate.
As additional DER capacity continues to come onboard, generators will retire some coal, nuclear and gas steam plants that are providing overcapacity and are not agile enough to play a role in this new, more flexible orchestra of generation resources. This is already happening.
Real Data in Real Time
Although utilities are actively pursuing many of the approaches mentioned in this article, bulk power and DER will coexist safely and efficiently only if market operators have visibility into real data in real time for optimal management and planning. Models are important, but not as important as real measurements. Sensors and analytics are the foundation of getting those measurements that will enable automated, real-time reaction to real-time changes in power flow, voltage and frequency.
As the founder and president of the company, Michael Bauer serves as chief operations officer, responsible for operations management, product vision, strategy and leadership at Sentient Energy. Prior to Sentient Energy, he served as entrepreneur in residence at Oak Ridge National Laboratory for the Department of Energy and for Foundation Capital. Bauer first entered the smart grid industry with BPL Global (acquired by Qualitrol) in 2005, were he was responsible for product strategy. Before that, he spent over a decade in broadband and video networking in Silicon Valley. Bauer earned advanced degrees in business administration and East Asian studies (Mandarin Chinese) from Stanford University, as well as general and theoretical physics from Technical University of Munich, with distinction. He holds patents in networking and smart grid, both domestically and internationally
Jim Tracey is Sentient Energy’s vice president, product management. Prior to joining Sentient Energy, Tracey served as product manager for outage and distribution management for the Software Solutions business of GE Energy. There, he was responsible for product vision and direction for outage and distribution management in coordination with all smart grid integration activities. Tracey was employed for 20 years at Florida Power & Light and was involved in various engineering and systems development roles. For 13 of those years, he was the manager of distribution operations systems and was responsible for the development and support of all major operational business systems supporting dispatch operations. He was also employed at Consolidated Edison for eight years and was involved in various roles in underground operations in New York City.