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Cloudy with a Chance of Energy: Evaluating Technologies to Manage Grid Intermittency

Utilities have long known that renewables will impact the grid, but have yet to define and quantify the impact in any usable way. In this report, we define intermittency and determine the optimal mix of baseload and flexible generation coupled with emerging technologies required to integrate more than 30% wind and solar generation into grid. Emerging automated demand response programs are the lowest cost option, but are limited to being capable of managing only the highest 2% of demand. At current natural gas prices, electricity can be generated by natural gas power plants cheaper than it can be stored and shifted by any grid storage technology. However, unbridled natural gas use with 30% renewables and no storage will unavoidably result in the curtailment of renewably generated electricity. To minimize curtailment, utilities will have to install enough grid storage to capture and shift at least 0.5% of the total electricity generated over the course of the year.

Table of Contents

  • Executive Summary
      • To Plan for Intermittency, Utilities Must Align Renewable Generation Profiles with Demand Curves
      • The Levelized Cost of Electricity (LCOE) Mirrors a Vertically Integrated Utility's Cost-minimization Approach
  • Landscape
    • Intermittent Renewable Energy Resources Present Unique Challenges to Utilities
      • Intermittent Generation Will Wreak Havoc on an Unprepared Grid
      • The Rapidly Growing Base of Wind and Solar is Forcing Operators to Manage Intermittency
    • We Focus on How the Intermittency Caused by Wind and Solar can be Managed by Natural Gas, autoDR, and Energy Storage
      • The Intermittency Issues Caused by Renewables Vary Significantly between Wind and Solar
      • Natural Gas, autoDR, and Energy Storage Together can Effectively Manage Intermittency
    • Intermittency Mitigation Varies between its Causes and the Responsiveness of a Resource
      • A High Level of Granularity is Required to Adequately Assess the Impact of Renewables on the Power Grid
      • Numerous Factors Impact the Operator's Ability to Manage Intermittency
    • Landscape Conclusions
  • Analysis
    • Understanding Technology Lifetime Costs Takes into Account its Performance Capabilities
      • Capital Costs Alone Do Not Dictate the LCOE of Each Technology
    • Natural Gas is the Status Quo, but AutoDR and Storage will Shoulder the Future Load
      • To Assess the Costs Associated with Intermittency, We Modeled Average Daily Loads throughout the Year
      • Climate Dictates Seasonal and Daily Demand Profiles
    • Analysis Conclusions
  • Outlook
  • About Lux Research
  • Endnotes
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