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OPINION: Enabling renewable energy with flexibility

Wayne Glossop

Wayne Glossop

Photo by Duane Daws

23rd March 2017

     

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In this thought leadership article, Wärtsilä's Wayne Glossop explores the issue of building flexibility into the South African power system as the penetration of renewable energy rises

As the public comments period for the draft Integrated Resource Plan (IRP2016) comes to an end, it is worthwhile to take a step back and reflect on where our power system is headed in the future and re-align our thoughts to where the future focus areas will be.

The world is pushing for more sustainable energy sources and as a result, we are seeing a shift of focus away from traditional energy sources such as coal towards cleaner, and cost-effective, technologies such as wind and solar. But there is a trade-off that comes with this and that is the inability to control how the wind blows or when the sun shines. This intermittency means the power system operators are now asking themselves not “Who is the cheapest energy provider?” but rather, “What needs to happen in order to enable the most renewables into the system?”. Put in another way, “Who is the most flexible power generator that will allow for the least system cost?”. According to the current draft IRP2016, gas is the preferred flexibility provider.

Answering this question has far-reaching implications for how the power system is planned (IRP), how the grid is operated (Grid Code), and how the power market framework supports flexibility (Ancillary Services). South Africa is on the cusp of having to deal with this exact question as our renewable energy installed base exceeds the 10% penetration level, which, according to International Energy Agency, means we need to start planning for, and building flexibility into our power system.

But what exactly is flexibility? To start with, we need to understand that there are largely two components associated with energy from intermittent sources, namely a predictable part, which is mainly from solar and an unpredictable part, which is mainly from wind. The impact from solar is that energy is provided to the power system during the day but unfortunately, it largely fails to cover the morning and evening peak demand periods. This means that during the few hours after morning peak and before the evening peak, ultra-fast acting generators are required to shut down or ramp up in order to accommodate the solar energy (see the actual and predicted daily demand curve for California which is also informally known as the ‘duck-curve effect’). Fortunately, this effect can be planned for in advance as you know when the sun will rise and set each day with only a degree of unpredictability arising from erratic cloud cover patterns.

Figure 1: Ultra-fast acting generators are required to keep the Californian power system stable when satisfying the evening peak demand period.

Wind, on the other hand, is far less predictable and as a result, requires energy to be generated at short notice in order to keep the supply/demand balance in check (or rather keep the power system at 50 Hz). This ‘short-notice energy’, known as Operating Reserves, is characterised by the amount of time a generator is allowed to reach a desired output. The South African Grid Code provides clear definitions on the different types of Operating Reserves but the reserve type likely to be of most interest in the South African context is that of 10-minute reserves as these reserves are well suited to balance the renewable intermittency in the system. And, as the name suggests, 10-minute reserve providers must be able to provide the required power within 10 minutes from the time they receive the instruction from the System Operator.

Gas & Renewables
But who is able to satisfy both these predicable and unpredictable energy supply requirements? Today, there are a number of flexible technologies available which include hydro, pump-storage, concentrated solar power (CSP), demand side response (DSR), batteries, gas, and yes, even coal to some extent. Each option will have its own advantages/disadvantages but if we take our guidance from the draft IRP2016, we see that today gas is the preferred flexible technology, from a techno-economical perspective, for the future power system.

Our own analysis (Wärtsilä) and replication of the draft IRP confirms this fact as can be seen in the simulated typical weekly energy dispatch schedules for 2020, 2030 and 2040, as well as the allocated reserve providers for each week.

Figure 2: Typical weekly dispatches for 2020, 2030, and 2040, which highlights the flexible role that gas plays in the system (Wärtsilä Plexos Modelling output).

Figure 3: Typical weekly reserve allocation graphs for the years 2020, 2030, and 2040, which shows the increasing role of gas as a reserves provider to the system(Wärtsilä Plexos Modelling output).

From these two graphs, we learn that flexible gas energy starts its life predominantly as a reserves provider and grows to become both the dominant reserves and flexible energy provider to the system. Having this flexibility allows then for the less flexible technologies to be operated in a more optimal way by ‘flattening’ their dispatch profiles against the renewable variability. This outcome is as a result of the lower capex, fast starting capabilities, low start-up costs, low ramping costs, and higher part load efficiencies associated with gas technology, which makes it a more cost-effective flexible energy provider, from a system perspective, than the modelled alternatives.

The draft IRP2016 already reflects this highly variable phenomenon by claiming load factors for gas of between 5-30 percent which is typical for flexible generators. And while these numbers may appear to be very low, thus raising questions around the feasibility or viability of such generators, it is important to remember that the objective is to enable renewables, not to provide energy which would displace traditionally cheaper energy providers such as coal and nuclear. These low load factors will certainly create curiously high project level tariffs, however, of paramount importance is that the entire power system will realise significantly more savings than the premium project costs associated with low load factor, flexible generators as these generators enable more cost-effective renewable generators.

Role of Gas in South Africa’s energy mix
Armed with this basic understanding of how flexibility, through gas technology, is integrated into the power system, let’s reflect on how we are positioned today as a country to adopt and integrate these flexibility concepts into the power system.

Today, there is collectively over 3.7GW of gas capacity that has been approved by the Minister of Energy to be built through IPP’s up until 2030. If we reflect on South Africa’s experience to date with IPP’s, apart from the recent push-back by Eskom on signing renewable IPP Power Purchase Agreements (PPA), the REIPP Programme has demonstrated that IPP integration into a former-monopolised utility framework is indeed possible with resounding success.

However, we should be cautious in drawing comparisons between the REIPPP and a Gas Programme given the distinctly different roles that each technology plays in the power system. Renewables are non-dispatchable therefore you “take what you can produce”, but gas is dispatchable so the System Operator will determine when and how much energy is required to balance the system. To make matters more complicated, unlike the baseload coal IPP programme, which is a dispatchable but “take everything I produce” approach, as already described, gas has significant dispatch variability from acting as both a flexible energy and reserves provider to the system.

This deeply integrated, and highly complex relationship between gas and the power system must therefore consider many more dimensions than simply the Levelised Cost of Electricity (LCOE), as has largely been the case in the DoE-led Renewable and Coal IPP programmes (noting that socioeconomic development elements are common amongst all technologies). An added ‘flexibility’ dimension must be added to the evaluation mix when selecting which flexible technology to build. A large part of what constitutes this flexibility will be defined within an Ancillary Services agreement as it is here that one would define and appropriately value the need for generators to provide flexibility by identifying, among other aspects, their reserve provision capabilities. The value of these services could be defined by determining the system level benefits that are achievable by integrating this flexibility.

So when considering the envisaged Gas IPP Programme, in order to progress this programme in a manner that will actually provide benefit to the power system, in the absence of an Ancillary Market, extremely close engagements between Department of Energy and Department of Public Enterprises/Eskom must ensue to ensure a proper alignment on the role of gas is achieved.

But more importantly, when considering flexible energy providers, as gas most certainly is, according to the draft IRP2016, our understanding of what constitutes a ‘good’ power plant for the system must change. Simplified discussions limited to the Levelised Cost of Electricity and load factor are insufficient to describe a flexible generator which is used to support renewables. Rather, aspects such as speed of dispatch, cost of start-ups, and high part load efficiencies should dominate the discussions as it is within these areas that one can meaningfully begin answering the question of who is the best enabler of renewable energy.

 GlossopGloG Glossop is Wärtsilä South Africa business development manager

Edited by Creamer Media Reporter

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