Operational Flexibility: Why There's No Ducking Away From Boosting It

California provides an excellent example of why asset managers in today's power industry need to boost the operational flexibility of their plants. Leading the nation's transition to environmentally sustainable electricity generation, California is on track to produce a third of its energy from renewable sources by 2020—and wants to obtain half its retail electricity from renewables by 2030. However, the rapid growth of solar power and other renewables is creating challenges for managers of traditional power-generation assets in the state and for the California Independent System Operator (CAISO), which manages the electric grid.

Portrait of a Duck

Operational flexibility has always been a key feature in the management of electricity generation, transmission, and distribution assets. It's what enables the second-by-second matching of demand and supply as loads on the system vary over the course of a day, from season to season, from region to region, and if a plant unexpectedly breaks down. Even today, electricity is tricky—and relatively costly—to store in large quantities.

But power systems are undergoing a metamorphosis as energy economies transition to become less carbon intensive. Renewables such as solar and wind power are variable by nature, and so the need for flexibility is ramping upwards.

To explain what is happening, the CAISO has come up with the duck chart. It is made up of a series of curves of net load—the difference between forecast load and expected electricity production from variable generation sources—throughout a typical day. When curves are plotted from 2012 to 2020, the result is a picture of a duck with the belly getting lower year over year.

Deeper and Steeper

The increase in solar adoption means that the need for generation from other dispatchable electricity sources ramps steeply upwards and downwards over the course of a day. As the sun rises, the net load curve falls sharply as solar electricity feeds into the grid. As the sun sets, net load rises even more steeply as solar power ebbs away and demand peaks. Year over year, the turndowns get deeper and the ramp rates get steeper. By 2020, the afternoon ramp up that the CAISO needs to manage will require 13,000 MW of generation to be brought onto the grid over a period of three hours.

The challenges are threefold: firstly, the steep ramps; secondly, the risk of oversupply; and thirdly, decreased frequency response—a threat to grid stability. System operators that struggle to balance demand and supply may find that, at times, prices will become volatile or even turn negative, frequency will drift beyond tolerable limits, area balances will be violated, and renewal generation may need to be significantly curtailed.

System operators have various flexibility options at their disposal—some short term, some long term—and these will impact owners and operators of generation plants. When it comes to managing demand response, they will also impact electricity consumers.

These options include: the ramping of dispatchable generation, such as hydro, gas, and coal; utilization of storage, such as pumped hydro or utility-scale batteries; curtailment of renewable generation; advanced network management; transmission reinforcement or expansion; and better economic design or joint operation, as is happening in the western half of the United States in the Energy Imbalance Market launched in 2014 by CAISO and PacifiCorp.

Beyond Faster Ramp Rates and Deeper Turndowns

It's not just the rapid rise of renewable energy sources connected to the grid that poses a challenge. Distributed generation is also growing fast as customers adopt rooftop solar, on-site energy storage, electric vehicles, and energy management systems. The utility Southern California Edison estimates that the penetration of distributed generation within its territory could more than double to over 12 GW in the coming decade.

As customers increasingly exploit opportunities to become suppliers, grids will need to get smarter so that system operators get the data they need to keep everything in balance and to account for all the power flows. Customers could play a role in helping to keep the system stable through demand response or on-site storage—perhaps in the form of electric vehicle batteries.

In this new world, asset performance management (APM) takes on new dimensions, bringing together multiple technologies that include the industrial internet of things, smart meters, sensors, data analytics, and even virtual models of products or processes. When APM is applied effectively to a gas turbine, it can expand flexibility by reducing start-up time, lowering the turndown limit, increasing peak power capacity, and reducing emissions. It can also reduce fuel costs by increasing efficiency, extending maintenance intervals, and reducing or eliminating unplanned outages. Plant operations optimization (OO) can improve fuel supply management, financial planning, and regulatory compliance. And finally, business optimization (BO) can enhance market intelligence and forecasting, portfolio optimization, and fuel procurement.

These changes are all part of a digital industrial revolution that will enable asset managers, system operators, and electricity customers to achieve an unprecedented understanding of what is happening within networks, systems, and individual assets. This new knowledge will enable plant managers to improve operations, costs, and maintenance needs.

This evolution of the power industry will require policy makers and regulators to develop economic models and rules that ensure services are priced and rewarded commensurately to provide the right mix of incentives. If they get it right, where California leads, others will follow.