Integrating Reliable Renewable Energy into the U.S. Electrical Grid

Last updated May 31, 2017

Introduction

In 2016, renewable energy accounted for over half of all new generating capacity for the third consecutive year. This rapid expansion of wind and solar capacity throughout the U.S. electrical grid has contributed many benefits to our electricity system. These include a more secure and reliable grid, cost savings for consumers and health, economic and environmental gains. The growth of renewables contributed to a reduction in power sector carbon emissions -- in 2015 emissions reached their lowest point since 1993. All renewable sources combined provide about 15 percent of U.S. electricity, though that percentage varies from state to state. The falling cost of gas and renewables has made it harder for coal and nuclear power to compete on price.

The growth of renewable energy enables grid operators to draw power from a more diverse range of sources. Throughout history, operators worked with the inherent variability and uncertainty of all power sources, as well as fluctuation in demand to maintain reliable electricity for customers. While the output of renewable energy varies with the changing conditions of wind and sun, balancing the changes in supply and demand does not present an entirely new challenge. Renewables are helping to drive technological advances that are modernizing the grid while increasing its security and lowering costs. Government studies show that renewables give grid operators new tools to maintain reliability, and their widespread distribution can balance out daily intermittency. The National Renewable Energy Laboratory (NREL) estimates that renewables could supply up to four-fifths (p. iii) of total U.S. power generation by 2050 while balancing supply and demand.

California, Texas and Iowa are currently demonstrating the benefits that renewables provide to the grid, through a combination of widespread deployment, innovative regulation and cutting-edge technology.


Maintaining Grid Reliability

Today’s power grid is heavily reliant on aging infrastructure which “makes it susceptible to a wide variety of threats including severe weather and other natural disasters, direct physical attack or cyberattack, and accidents associated with the age of the grid or human error” (p. 1), according to the CNA Military Advisory Board.

For example, extreme weather can present major challenges to maintaining grid reliability with traditional coal and nuclear plants. The January 2014 polar vortex brought such frigid temperatures to the eastern and southern U.S. that some coal plants shut down because they could not access frozen coal stockpiles (p. 3). Although gas usage rose and prices spiked due to higher demand, grid operators were able to maintain power supply with strong wind power output and temporary reductions to consumer electricity use, demonstrating that a more diverse grid increases resilience to a wide array of potential disturbances.

Even as renewables provide increased diversity and reliability, there are some uncommon challenges associated with integrating them onto the grid. In March 2017, a surplus of solar generation in California contributed to a drop in power prices which at times fell below $0 per megawatt-hour. Large generators like nuclear plants, which run constantly because they are difficult to shut down, also contributed to the drop in prices due to their high level of output. Such instances of “negative pricing” happen infrequently when supply exceeds demand and have virtually no impact on average market prices.

In rare cases, operators must switch off, or “curtail,” some generators when the grid is acutely oversupplied. This can happen when solar power peaks during the day in California, or at night when wind power is greatest in the Midwest, augmenting the grid’s supply of power from coal and nuclear with cheap renewables. Good hydro conditions in California this spring led to the curtailment of small amounts of renewable generation in the morning and mid-day when load is lighter. However, these curtailments have not caused reliability issues, and grid operators have an array of tools to deal with variability. Among these tools are accurate weather forecasting, sophisticated controls for renewable generators, flexible balancing of other resources like natural gas, utility-scale energy storage, and transmission lines to move power to areas of high demand. Changes in the wholesale market that allow for better scheduling of power plants and sharing of reserve margins across wide geographical areas could also reduce curtailment.

The challenges renewables pose to the national power grid are minor compared to the larger systemic problems of aging infrastructure, susceptibility to weather-related outages and an overreliance on fossil fuels. Xcel Energy CEO Ben Fowke recently acknowledged, “I don't think 5 or 10 years ago I'd be comfortable telling you we could not sacrifice reliability when we're going to have 35% of our energy come from wind. I'm telling you, I'm very comfortable with that today.”


Case Studies of Successful Renewables Integration

California accounted for 35 percent of U.S. cumulative installed solar photovoltaic capacity in 2016.

  • The California 2030 Low Carbon Grid Study found that the state can use renewables, natural gas and efficiency to cut its power sector carbon emissions in half by 2030 “with minimal rate impact, minimal curtailment of renewable energy, and without compromising reliability” (p. 1).
  • California set a new record by serving nearly 42 percent of electricity demand with wind, solar, hydro and other renewables on May 16, 2017, according to the state grid operator.
  • In September 2016, Tesla partnered with Southern California Edison to create one of the world’s largest energy storage facilities to make up for lost capacity following the catastrophic rupture at the Aliso Canyon natural gas reservoir.
  • Southern California Edison recently launched the world’s first hybrid battery-and-gas turbine system. The system’s 10-megawatt lithium ion batteries put out energy while the gas turbines are off, significantly reducing emissions and helping to balance energy supply and demand.

Texas wind power has the most installed and under construction capacity of any state, supports over 22,000 jobs and has generated more than $38 billion in capital investment.

  • On March 23, 2017, the Texas grid operator, ERCOT, set a new wind energy record by powering 50 percent of the grid with wind.
  • Wind power is saving family farms in Sweetwater, a town on the edge of the oil- and gas-rich Permian Basin. Four of the eleven largest wind power plants in the world are around Sweetwater, and the regular income they generate allows landowners to maintain their property and keep the farms family-owned. Major wind investment boosted the county’s tax base from roughly $400 million in 2000 to about $3 billion today.
  • Texas is third in the nation for solar jobs, following California and Massachusetts.
  • A report presenting two in-depth case studies on integrating high levels of renewables in Texas and Colorado found that successful renewable integration in both states “shows that integrating variable renewable energy at penetration levels of 10-20% on average and at times above 50% – i.e., high relative to the current levels in most of the United States – is possible” (p. 5).

Iowa, the second highest wind power-producing state in the U.S., used wind for over one third of its net power generation in 2016, growing from only 7.7 percent in 2008.

  • The Southwest Power Pool (SPP), which oversees the electric grid in 14 states including parts of Iowa, set a record in February 2017 by briefly powering over 52 percent of its load with wind energy. Bruce Rew, Vice President of Operations for SPP, said they have the “ability to reliably manage greater than 50 percent wind penetration. It’s not even our ceiling. We continue to study even higher levels of renewable, variable generation as part of our plans to maintain a reliable and economic grid of the future.”
  • The Iowa wind industry supports up to 9,000 jobs and invested $13.5 billion in the state through 2016. Landowners who lease part of their property to wind developers receive annual payments of up to $25 million.
  • Iowa is ranked first the in nation in terms of power grid reliability.

Benefits of Continuing Renewable Integration

Grid operators now have many more tools at their disposal to maintain reliability while using more renewables. A U.S. Department of Energy study shows that with grid operators’ new “toolbox...reliability can remain a trademark characteristic of our evolving power system” (p. 1). NREL conducted a study that found “renewable energy resources, accessed with commercially available generation technologies, could adequately supply 80% of total U.S. electricity generation in 2050 while balancing supply and demand at the hourly level” (p. 3).

A study by the National Oceanic and Atmospheric Administration and the University of Colorado, Boulder, shows that widespread distribution of renewables would help address the intermittency problem by covering a wider swath of land and taking advantage of weather conditions over a larger area: “Wind and solar power increase their share of electricity production as the system grows to encompass large-scale weather patterns” (p. 1). A report from the Brattle Group found that renewables do not harm grid reliability in California, which “ is on target to meet its 33% 2020 Renewable Portfolio Standard” or in Germany which “already reached close to 30% renewable energy generation in 2014, also without reliability concerns” (p. vii).

Continued renewable penetration provides other benefits:

  • Security and Reliability: The growth of renewables increases grid security and reliability. As decentralized renewables such as rooftop solar, small-scale community solar and microgrids grow they reduce some of the grid’s vulnerabilities. A Johns Hopkins University study showed that “decentralized energy schemes such as microgrids and distributed energy generation can play an important role for developed countries in mitigating risk and security threats to the electricity sector and ensuring continuous electricity delivery even in times of natural disasters or terrorist attacks.” Another report by the CNA Military Advisory Board found that “microgrids… wind, solar… and emerging energy storage systems can increase electrical generation and distribution security” (p. 2).

Renewables can also increase grid reliability by providing “capacity value,” which is a measure of the contribution intermittent sources like wind and solar make to a conventional power grid. An NREL factsheet shows that “wind and solar energy can provide capacity value by reducing the demand that must be met by conventional generators during periods of high demand.” (p. 1). The growth of “smart grid” technologies that often accompany distributed generation has raised concerns about a higher level of exposure to cyberattacks. However, utilities like Pacific Gas & Electric have initiated smart grid programs that integrate “new energy devices and technologies...while also maintaining a safe and reliable grid” (p. 2).

  • Cost Savings: A Stanford University study analyzing the costs of 100 percent renewable penetration on the power grid by 2050 calculated that the “social cost” of such a system would be “much less” than for one still heavily dependent on fossil fuels. Social costs account for the negative consequences that burning fossil fuels have on the environment, property and health while also factoring in the benefits of reducing emissions. Another study led by the same researchers found that after converting to a 100 percent renewable grid by 2050, each person in the U.S. would save on average $260 per year on energy costs and $1,500 per year on health costs.

Another study assessing the cost-competitiveness of future electricity systems showed that “when using future anticipated costs for wind and solar, carbon dioxide emissions from the US electricity sector can be reduced by up to 80% relative to 1990 levels, without an increase in the levelized cost of electricity” (p. 1). The study also found that current renewable energy technologies without storage are enough to achieve these emissions reductions without raising costs for consumers.

  • Health, Environment, Economics: The U.S. Environmental Protection Agency found that the health impacts from fossil fuel-generated electricity cost the nation between $362 and $887 billion per year, representing between 2.5 and 6 percent of gross domestic product. Reducing emissions in the energy and transport sectors could prevent almost 300,000 early deaths caused by air pollution each year in the U.S. by 2030.

Renewables have enormous benefits for the environment because they emit little to no greenhouse gases, the main driver of human-caused climate change. Since the majority of U.S. electricity is still generated by burning fossil fuels, replacing that polluting capacity with clean, emissions-free energy will mitigate some of the most catastrophic impacts of climate change.

The U.S. Energy Information Administration projects that renewables will be the fastest growing energy source through 2040, and jobs in the renewable sector are following suit. Over three million people work in the clean energy sector, according to the Energy Department’s annual U.S. Energy and Employment Report. That’s over three times the number of people that work making motor vehicles.

Of those three million clean energy jobs, over two million are in energy efficiency, while the solar and wind sectors employ 374,000 and 102,000 people, respectively. Solar jobs grew by 25 percent in 2016 alone, while wind employment jumped 32 percent. Coal mining and support activities employed less than 58,000 people in 2016 — a 39 percent decline from 2009.

Last year, the wind industry in the United States alone generated $175 million in annual landowner lease payments for low-income counties. A report from Navigant Consulting projects that the cumulative economic impact from the U.S. wind industry during 2017-2020 will equal $85 billion. This revenue is injected into the American economy in the form of wages for workers, manufacturing and construction profits,  and tax revenue for governments at the federal, state and local level.

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