New Evolution of Power Markets Evaluating The Impacts of a Low...
Transcript of New Evolution of Power Markets Evaluating The Impacts of a Low...
![Page 1: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/1.jpg)
Evolution of Power Markets
Evaluating The Impacts
of a Low Carbon Future
usa.siemens.com/digitalgridUnrestricted © Siemens Industry Inc. 2017
![Page 2: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/2.jpg)
Page 2
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Agenda
Topics to be covered today
• Introduction
• Background
• Our Approach
• Option Delineation Energy Mix Consideration
▪ Utility Scale Renewable
▪ Distributed Energy Resources (DER)
▪ Flexible Gas Fired Generation
• Gas Forecast
• Demand Forecast
• Results: Transmission & Distribution Impacts
• Results: Market Impacts
• Conclusions
![Page 3: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/3.jpg)
Page 3
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Introduction
Characteristics of a low Carbon Future
Climate Change is driving policy worldwide for societies to reduce
their Carbon Footprint
• The electric industry is a lead contributor to this reduction in two
important ways:
• Change of the supply energy mix:
▪ Utility scale renewable resources & storage.
▪ Distributed Energy Resources & Storage.
▪ Low Carbon conventional Generation
• Change in the consumption:
▪ Transportation Electrification (EV, Mass Transit)
▪ Heat Pumps and elimination of heating oil
▪ Energy Efficiency
These changes will dramatically impact how our industry
will look in the not distance future
![Page 4: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/4.jpg)
Page 4
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Over 65 GW of Capacity Announced to be Retired
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
ERCOT FRCC MISO NewEngland
New York PJM SERC SPP California NWPP RMRG SWRG
Coal Gas Oil Nuclear Other Solar Water Wind
Announced Generation Capacity Retirements
![Page 5: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/5.jpg)
Page 5
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Over 90 GW of Generation Capacity under Development
with 42 GW under Construction
0
5,000
10,000
15,000
20,000
ERCOT FRCC MISO New England New York PJM SERC SPP California NWPP RMRG SWRG
MW
Gas Oil Nuclear Solar Water Wind
Generation Capacity Under Development ( 90 GW)
Generation Capacity Under Construction (42 GW)
0
5,000
10,000
15,000
ERCOT FRCC MISO New England New York PJM SERC SPP California NWPP RMRG SWRG
MW
Gas Oil Nuclear Solar Water Wind
![Page 6: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/6.jpg)
Page 6
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Electricity Demand Plateau:
Total Electricity End-Use Demand, 1950-2016
• Source: US Energy Information
Administration
• Data is for all 50 states and the District of
Columbia
• US electricity demand peaked in 2007
• The Great Recession, which officially started
in December 2007, was initially blamed for
the slowdown in electricity consumption.
• Continued stagnant grid served growth has
since is due to:
• Efficiency standards
• Demand side management and demand
response
• Behind the meter generation0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
GW
h
![Page 7: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/7.jpg)
Page 7
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Falling Energy Demand Forecasts, NYISO
• Data is from NYISO “Gold Book”, 2013-2017,
“Baseline Forecast”
• These baseline forecasts include the load-
reducing impacts of energy efficiency
programs, building codes, and appliance
efficiency standards
• The 2013 and 2014 Gold Books reference
increased load in the Baseline Forecast due
to electric vehicles. This language was
dropped after 2014.
• Beginning in 2014, NYISO explicitly mentions
that the Baseline Forecast is net of retail or
behind-the-meter solar PV. (The word “Solar”
does not appear in the 2010 Gold Book.)
• Over the period 2013-2017, projections for
2020 energy have fallen 7.5%.
150,000
155,000
160,000
165,000
170,000
175,000
GW
h
2013
2014
2015
2016
2017
![Page 8: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/8.jpg)
Page 8
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Falling Energy Demand Forecasts, CAISO
• Data; CA Energy Commission, Staff Reports
2013: CA Energy Demand (CED) Updated
Forecast, 2015-2025, December 2014
• 2014-15: Staff Report: CED 2016-2026,
Revised Electricity Forecast Volume 1:
Statewide Electricity Demand and Energy
Efficiency, January 15, 2016
• 2016-17: CED 2018-2028 Preliminary
Forecast, August 9, 2017
• Most recent year (2017) forecasts are lower
due to:
• “Additional utility efficiency program
impacts”
• “Forecast electric vehicle consumption dips
below that in the previous forecast”
• “Higher forecast for photovoltaic (PV)
systems”
290,000
295,000
300,000
305,000
310,000
315,000
320,000
325,000
2020 2024 2025 2026 2027 2028
GW
h
2013 2014
2015
2016
2017
![Page 9: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/9.jpg)
Page 9
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Our Approach
Forecasting the future is always challenging
We use a holistic approach
• Formulation of Scenarios
▪ Base Case / BAU
▪ Increase Utility Scale Renewable
▪ Distribution Side Focus ; DER
▪ Increase gas supply (new pipes / LNG) + CCPP
▪ Demand Side Focus: increased electrification / EE
• Delineation of Options (Performance, Location, CapEx,
timing)
▪ Options are used in the optimization process
▪ Reflect current and projected conditions
▪ Options for each of the elements; DER, Renewable, EE,
etc.
• Optimization and Assessment
▪ Stochastic versus deterministic.
▪ Costs and results
▪ Do we reach the target and if not what is the gap?
▪ CapEx
Not all scenarios reach the policy objective…
but the cost are different
Policy objective targetMM
Sh
ort
To
n o
f C
O2
pe
r ye
ar
![Page 10: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/10.jpg)
Page 10
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Our Approach
Overall Process
AURORAxmp® as a Modeling FrameworkGPCM Modeling Framework
PROMOD
PROMOD®IV as a Modeling Framework
Transfer
Limits
Delivered
Fuel Prices
Power
Generation
Three interlinked models are used
• The Gas Pipeline Competition Model: Provides delivered prices at sites to Aurora and PROMOD considering exiting and
forecasted pipelines and forecasted gas prices at supply level.
• AURORAxmp®: Zonal model that provides optimal generation expansion to meet given objectives; e.g. clean energy
penetration. Used gas prices from the GPCM and updates on transfer limits from PROMOD.
• PROMOD®IV: Nodal model, detailed dispatch, transmission congestion assessment based on AURORA’s expansion plan.
![Page 11: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/11.jpg)
Page 11
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Stochastic Market Simulations Quantify Uncertainty
Siemens Energy Business Advisory’s approach produces an intuitively believable range of market outcomes, and
decision makers understand that the average of all potential outcomes – the “Expected Value” - is the best estimate of
future outcomes. This Expected Value includes “extrinsic value”.
![Page 12: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/12.jpg)
Page 12
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Delineation of Options
Renewable: the New Normal for a Post Carbon Economy
And large amounts of renewable penetration; 40%, 50% … 100% are target
![Page 13: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/13.jpg)
Page 13
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Delineation of Options Renewable Resources
• To assess impact we need assess what resources
are likely to be added to the system to achieve
compliance.
• We start by a review of Interconnection Queues
▪ Projects with signed ISA added to AURORA and
PROMOD
▪ Facility Study Level assessed some also added
▪ This is unlikely to produce the levels of renewable
generation that we would need.
▪ PJM queue for example had 4.4 GW of projects with
signed ISA that were not suspended and even
considering those the value increased to 8.9 largely wind.
▪ A recent study identified over 30 GW of renewable in one
state for the required levels of penetration.
26%
74%
solar
wind
PJM Queue
8.9 GW Renewable with ISA signed
40%, 50% … 100% Penetration will fundamentally change the grid
![Page 14: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/14.jpg)
Page 14
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Delineation of Options
Renewable Resources; New Builds
We need to know location… utility scale but also DER
• Identify areas for project development
▪ These are areas where renewable is likely to be located
▪ The evaluation is based on resource maps (mesoscale information)
▪ High level assessment of Land availability for development.
▪ PV Requires significant land, not subject to flooding and preferably
flat
▪ Typically 7 Acres per MW; i.e. a 90 MW plant can use 1 sq mile.
• Transmission limitations
▪ Areas with high potential may have limited transmission; e.g. Far
West Texas for Solar.
▪ We may define limits on maximum additions to the AURORA
expansion model.
▪ Regardless considering the shift in the generation mix investments
in transmission are unavoidable.
![Page 15: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/15.jpg)
Page 15
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Delineation of Options
Economies of Renewable
• CapEx
▪ The reduction in Capital expenditure requirements for both wind and
solar technologies is unprecedented.
▪ Wind generation averages $ 1,500 / kW and we expect the cost
reduction trend to continue $ 1,300 kW
▪ The impact in solar PV is even more pronounced ; by 2015 NREL
benchmark (100 MW) had a price of $ 1.77 /Wdc in the 2016 update
this value dropped to $ 1.49 /Wdc and by 2017 the value is $ 1.11 we
expect in the long term values in the 0.8 to 0.9 range.
Renewable Performance is function of the two C’s; CapEx & Capacity Factors
![Page 16: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/16.jpg)
Page 16
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Delineation of Options
Economies of Renewable
• Capacity Factors
▪ Capacity Factors keep increasing for both wind and solar.
▪ In the case of wind this is due to larger blades, taller towers, more
efficient designs for low wind speeds/
▪ For solar it is a combination of tracking and more efficient panels.
▪ Capacity factors for wind are a function of the wind resource but in
average they are in the 35% range
▪ We expect the trend to continue to 40%.
▪ PV capacity factors are also function of location and tracking
capabilities. Typically are in the 22% to 26% range.
▪ We expect the trend to continue to values in the 26% to 30% range.
Renewable is a function of the two C’s; CapEx & Capacity factors
![Page 17: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/17.jpg)
Page 17
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Delineation of Options
Economies of Renewable
These trends make Renewable highly competitive
▪ Wind PPA Prices are reaching the $ 20/ MWh
▪ Solar costs for utility scale are reaching $ 50/MWh without ITC close to
$30 with ITC and projected to be $ 30/MWh without ITC
▪ Residential PV is in the $ 100/MWh and expected to drop to $ 50/MWh
▪ This prices make it competitive with gas (e.g. $ 30 /MWh for $ 4 /MBTU).
▪ The residential make it competitive with delivered power rates.
Renewable makes economic sense as well
![Page 18: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/18.jpg)
Page 18
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Delineation of Options
Consideration for DER
Distributed Energy Resources introduce new effects that need to be
taken into consideration
• Reverse Power injection into transmission
▪ This was considered rare but it is projected to become a common occurrence
and reverse flows to be substantial.
▪ The transformation capacity at the substation can be the bottle neck and
consideration needs to be given to variability of PV + the load; reserve
margins are necessary.
• Variability of the PV
▪ Introduces voltage regulation and flicker / voltage dips so fast that cannot be
controlled by normal devices; fast devices are required or larger conductors
▪ Sustained changes result in frequent movement of transformer taps, voltage
regulators
• Can introduce voltage and over loading violations
▪ Localized overloads and low/high voltages
Load profile w/o Solar PV
Solar PV Output
Load profile w/ Solar PV
Minimum demand Maximum demandMaximum Solar PV
![Page 19: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/19.jpg)
Page 19
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Delineation of Options
DER, Utility Scale & Storage
• To determine DER potential a Feeder Hosting capability study is necessary
▪ Starts from an assessment of what feeders can accept renewable (not LV network, land for 5 MW or larger)
▪ Determine the maximum renewable that can be interconnected without investments;
▪ Determine increases due to volt/VAr system, smart invertors
▪ Determine increases with reconductoring, direct connection to the substation, increase transformation HV/MV
▪ End result DER potential by transmission/distribution substation and associated CapEx.
• The DER potential complements the utility scale potential derived from the assessment of resource, land
and transmission.
▪ 20 MW or more can be connected as well at distribution as determined by the hosting capability study
• Storage has the potential to mitigate impacts and facilitate integration
▪ Some studies start by considering storage penetration at the DER level and behind the meter as a resource.
▪ This can be complemented by storage as a means to solve regulation / congestion issues.
• Other Investments at the distribution level
▪ Regulation / Control of myriads of resources.
![Page 20: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/20.jpg)
Page 20
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Delineation of Options
Conventional Generation - Simulating the Market
• Reserve margin based
▪ Utility approach
▪ Can be paired with a loss of load probability analysis
• Economic builds
▪ IPP approach
▪ Can be based on a utility or IPP cost of capital
▪ Ties to capacity prices in a cleared ISO auction
• Backup specifically for renewable resources
▪ High level: proportional additions based on ratio of renewable to fossil fast
ramping
▪ Rigorous: based on variability of renewable resources (more on this later)
![Page 21: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/21.jpg)
Page 21
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Delineation of Options
Gas Simulations and Power and Natural Gas Market Balancing
![Page 22: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/22.jpg)
Page 22
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Henry Hub Prices are Expected to Average $3 to 2020
as Production Gains Outpace a Rise in Demand
Countervailing forces are at work in the
U.S. gas market
• Exports (LNG, Mexico), power
generation demand, and industrial
demand are turning the Gulf Coast into
a premium demand market
• However, shale gas production growth,
declines in production costs, and build
out of transport capacity from
Utica/Marcellus will keep prices in
check in the short-term
• Longer-term, prices are likely to
average $4, the price ceiling at which
many conventional gas basins become
economic againSource: Siemens PTI EBA. Note: Inflation rate is 1.54% p.a.
Henry Hub Price History and Siemens EBA 17Q4 Forecast
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
$/M
MB
tu
Historical Futures Pace 2017$ Pace Nominal$
![Page 23: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/23.jpg)
Page 23
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Electric Vehicles: the Demand Side Game Changer
An Analytical Approach to Impact and Strategic Support
MA3T Model
Federal and State
EV Adoption
Local EV Adoption
• Technology (costs, mark-ups, fuel economy, storage, range); Charging Infrastructure
(home, commercial, workplace availability and capacity); Fuel costs; Consumer
Preferences (technology attitudes, driving patterns, vehicle characteristics); Policy (Federal
& state incentives)
• Local policy support (i.e. incentives, parking, etc.)
• Local vehicle registration count and mix
• Local vehicle fleet size and mix
• Local driving patterns (i.e. distances, commuters, population characteristics and
preferences)
EV Impact on
Electricity Demand
& Investment
Key Inputs
• Utility base load forecast
• EV (BEV and PHEV) charging pattern and location forecast
EV Program Design
& Set-up
• Utility strategic plan and load targets, and current EV program efforts and results
• Program and component economic models
• Business model design, structuring, and transformation
Process
Utility Enabler
Assessment
• Feeder capability, communications systems, metering and billing systems, foundational
data
![Page 24: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/24.jpg)
Page 24
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Electric Vehicle Demand Impacts – Preliminary Results
0
1,000,000
2,000,000
3,000,000
4,000,000
Number of PEV and HEV National Vehicle Sales
PEV HEV BNEF PEV
Next steps can include reducing these national projections to regional and utility level forecasts using location specific customer
choice models and other factors; assessing the implications for feeders and other distribution elements; and development of a utility
strategy to lead or respond to EV penetration.
![Page 25: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/25.jpg)
Page 25
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Results
Market, Reserve, Transmission & Distribution Impacts
AURORAxmp® PSS®E and PROMOD®IV procedure:
• The policy targets, gas prices, demand forecast and resource options are modeled in AURORAxmp® that
produces the optimal compliant generation expansion plan. Provides market impacts (LMP’s, dispatches,
O&M costs, emissions, etc.)
• The new builds are added to strong busses (e.g. 230 kV and above) in the areas where they are located in
PSS®E and via contingency analysis a minimum set of reinforcements determined.
• PROMOD®IV determines congestion impacts at the bulk transmission level and at the sub- transmission /
substation level. Also provide market impacts
Some results and important findings are discussed next.
![Page 26: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/26.jpg)
Page 26
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Results
Reserve Impacts
▪ This is in general due to a combination of the capacity contribution of the
large amounts of renewable added + the required units to provide frequency
regulation, ramp capability and night peak support to back up variable
generation + units currently online that make enough profit to be kept online.
▪ This is inline with projections for the US
▪ This situation is likely to result in stable to lower capacity prices under
scenarios with high penetration of renewable.
19.0%
20.0%
21.0%
22.0%
23.0%
24.0%
25.0%
26.0%
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Demand Summer Capacity RM
Our studies regularly identify that reserve margins are maintained above the reliability targets
0%
5%
10%
15%
20%
25%
30%
35%
2017 Regional Reserve Margins
-
5.0
10.0
15.0
20.0
25.0
30.0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Re
serv
e M
argi
n (%
)
Zone A
Zone B
![Page 27: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/27.jpg)
Page 27
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Results
Reserve Impacts
▪ Renewable variability needs to be accounted for together
with of the load’s creating a total variability to be addressed.
▪ The standard formula for determining the Operating
Reserves is a constant K times the square root of the sum
of the squares of the variability of the load and the variability
of the renewable.
▪ For screening we use a percentage of the load served (1 to
3%) plus a percentage of the renewable online (5% to 10%).
▪ In the example to the left we used 3% and 10% to define the
requirements (red line – blue dots)
▪ It can be observed that thanks to the flexibility of the CC and
GT in this case the total output + spinning reserves (blue
dashed line yellow and red dots) is always above the
requirements with a minimum buffer of 4% in the peak day.
With high levels of renewable penetration the operating reserves need to be increased.
-
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
30,000.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Peak Day (July) (min buffer 4% @ hour 13)Solar DG
Solar Utility
Wind Off Shore
Wind Onshore
Other
Gas Other
Gas CC
Hydro
Coal
Nuclear
Total Output +Spin Reserve
Total Output + Op+Spin ReservesLoad + Required Operating ReservesTotal Output
![Page 28: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/28.jpg)
Page 28
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Results
Market Impacts
There are a number of important market impacts in particular for areas were the renewable has high
penetration levels▪ We observe a decline in the LMP’s in these zones with high renewable penetration
and moderate increase in other in spite of the projected increase in gas prices.
-
10
20
30
40
50
60
70
2016 2018 2020 2022 2024 2026 2028 2030 2032 2034
Mill
ion
lbs
P3F1 Annual Emissions
FPM Emission NOX Emission SOX Emission
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
$/M
Wh
On-Peak Off -Peak
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
$/M
Wh
▪ In the zones with high renewable there may
be a switch between on-peak and off-peak
prices becoming the later higher due to the
thermal generation at night
▪ There may be sustained reduction in
operating costs $/MWh due to the entry of
zero fuel cost generation
▪ The dispatch of thermal units steadily
reduces and if no limitations are put in the
program excessive cycling of coal and
nuclear units can be observed.
▪ There is a marked reduction of other
emissions in addition to the targeted CO20%
10%
20%
30%
40%
50%
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
Cap
acit
y Fa
cto
r
Gas CC
![Page 29: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/29.jpg)
Page 29
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Results
Transmission & Distribution Impacts
▪ Congestion happens when the dispatch has to deviate from the least
cost to prevent and overload under contingency.
▪ In the figure L1 is a binding constraint for the loss of (FLO) L2. Similarly
La FLO of Lb
▪ With large levels of penetration the first effect we note is curtailment; that
is generation that cannot be delivered to the load due to binding
constraints (L1 and Lb as well as their reciprocals).
▪ This can result I high “Congestion Cost” also called Shadow Prices.
▪ Congestion results in separation of the LMPs and in some cases driving
they down to zero or negative values in zones with excessive generation.
▪ With high levels of DER we may start seeing congestion at the sub-
transmission level as illustrated by La/Lb
PROMOD®IV allows identifying the transmission impacts and these are driven by congestion,
Delivered80%
Curtailed20%
Delivered
86%
Curtailed
14%
L1
L2
La
Lb
L1 FLO L2 ( 400 M $)
La FLO Lb (18 M$)
Very Low LMP
Low LMP
High LMP
![Page 30: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/30.jpg)
Page 30
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Results
Transmission & Distribution Impacts
PROMOD®IV allows evaluating solutions congestion
▪ Congestion is not new and has historically been addressed by
investments in transmission (e.g. ERCOT’s CREZ).
▪ Investment in transmission reduce or eliminate curtailment resulting in a
reduction in operating costs (conventional generation needs to run less)
and convergence of the LMP’s (lower payments by loads)
▪ This is used to assess the B/C ratios of new transmission facilities.
Delivered99%
Curtailed1%
Delivered
99%
Curtailed
1%
L1L2
La
Lb
L1 FLO L2 (1.0M $)
La FLO Lb (0 M$)L3
Average LMP
Average LMP
Average LMP
![Page 31: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/31.jpg)
Page 31
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Storage: the Supply Side Game Changer
Energy Storage has the potential to:
• Reduce or eliminate congestion by allowing an smarter use of
the transmission system; i.e. storing the power that would be
curtailed for delivery at times when either the renewable output is
reduced (e.g. nighttime) or there is available transmission
capacity
• Reduce the variability of the renewable by compensating
production ramps in the positive and negative direction.
• Provide primary and secondary frequency regulation.
• On the DER side opens opportunities for the creation of self-
reliant microgrids for reliability and economic reasons.
• As cost of storage decline we expect to see an increased role of
this technology, just as wind initially and now PV have become
mainstream.
Delivered99%
Curtailed1%
Delivered
99%
Curtailed
1%
L1
L2
La
Lb
L1 FLO L2 ( 1 M $)
La FLO Lb (0 M$)
Average LMP
Average LMP
Average LMP
![Page 32: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/32.jpg)
Page 32
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Storage: the Supply Side Game Changer
• Shown is a 25 MW 4 hour
duration lithium ion battery
using Aurora XMP software for
a recent project. This is a
winter profile shape.
Battery fully depleted
Battery fully charged
![Page 33: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/33.jpg)
Page 33
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Conclusions / Observations
The changes that a low carbon economy is bringing to our industry are profound.
• Renewable generation PV and Wind are main stream; energy prices make it competitive and the state
mandates can make it an important if not the main energy contributor.
• The energy markets can be affected; on peak prices can be lower than off-peak prices, base load units
may see their capacity factors erode and behave more like peakers.
• The impacts in transmission can be significant and congestion can appear were we least expect it;
including at the sub-transmission level.
• Primary and secondary frequency regulation can be challenging and can be met with flexible generation
(CC) and/or energy storage
• Renewable at the distribution level (DER) is changing the way the distribution system is utilized; load
substations can become generation injections and DER + battery storage can transform the distribution
system into an interconnection of self reliant micro-grids.
In this presentation we discussed methods to analyze the impact of these changes and prepare as…
The Future ain’t what it used to be (Yogi Berra)
![Page 34: New Evolution of Power Markets Evaluating The Impacts of a Low …energycentral.fileburst.com/EC/112917_Siemens_wc_slides.pdf · 2017. 11. 29. · Solar costs for utility scale are](https://reader033.fdocuments.us/reader033/viewer/2022052102/603c890bd0b49d56cf2a321c/html5/thumbnails/34.jpg)
Page 34
Unrestricted © Siemens Industry, Inc. 2017
11.29.2017 EM DG PTI
Contact page
Nelson J Bacalao
Senior Manager, Consulting
Siemens Power Technologies International
4615 Southwest Freeway, Suite 900
Houston, TX 77027, USA
Cell: +1 (713)-598-3856
Art Holland
Principal Consultant, Pace Global, a Siemens business
Siemens Power Technologies International
12700 Fair Lakes Circle, Suite 250
Fairfax, Virginia 22033
Mobile: 571.423.8781
usa.siemens.com/digitalgrid