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JOSEPHFERRARI
Elsevier
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1.Introductiontoelectricutilitiesandhowtheyplanforthefuture1
Introduction1
Electricutilities:thebasics2
Theearlyhistoryoftheelectricutility4
Theearlystagesoftheevolutionofcostapproaches7
Varyingtechnologytypesthatmadeup(andstillmakeup)thegenerationmix ofmostutilities8
Coalboilerplants9
Combustionturbines10
Combined-cyclecombustionturbines11
Reciprocatingengines(Recips)12
Hydro14 Nuclear14 Other16
Long-rangeplanning(alsoreferredtoaslong-termplanningorintegrated resourceplanning)16
Basicsofutilitylong-rangeplanning18
Majorapproachestocapacityexpansionplanning25
Approach1 capitalcost25
Approach2 annualcost26
Approach3 levelizedcostofenergy26
Approach4 loaddurationcurve-screeningcurveapproach27
Approach5 allsource-loaddurationcurveapproach27
Approach6 loaddurationcurve-basedcapacityexpansionmodels29
Approach7 modifiedloaddurationcurve-basedcapacityexpansionmodels31
Approach8 chronologicalcapacityexpansionmodels32
Summaryandtimelineofcapacityexpansionplanningapproaches33 References35
2.Influxofvariablerenewableenergysources,thewaythingsare going39
Introduction39 Policyandincentivesdrivingchange41
Briefhistoryofsolarpower43
Briefhistoryofwindpower45
Trendsininstalledsolarandwindcapacityandpricing47
Howsolarandwindimpactdispatchandpricing50
Variabilityofsolarandwind53
Netloadversusload55
Challengesrenewablesimposeonbaseloadgenerators61
Effectofgeographicdiversity62
Timescaleisimportant63
Solarandwinddegradationrates65
Baseloadisgoingaway,enterresidualloads67
Ramificationsforresourceplanning69
References71
3.Energystorageandconversion73
Basicprinciplesofenergystorage74
Sizeandduration75
Typesofenergystorage78
Pumpedhydro78
Flywheels79
Thermalstorage81
Otherformsofthermalenergystorage81
Batteryenergystorage82
Compressedairenergystorage88
Liquidairenergystorage89
Trendsindeploymentofenergystorage90
Degradationissues91
Referencemetricsforcommonformsofenergystorage95
Resourceplanningconsiderations95
Isstorageevenintheintegratedresourceplan?96
Thecaseforreal-timeconsiderations97
Chronologicalcapacityexpansiontovalueflexibility99
Mandatesandsubsidies103
References105
4.Renewablefuelsforlong-termenergystorage109
Introduction109
Renewablefuelsaslong-termenergystorage110
Whataboutbiofuels?112
Directcombustion113
Recycledbiofuels114
Syntheticbiofuels114
Resourceplanningconsiderations115
Hydrogen115
Powertohydrogen116
Hydrogentopower119
Resourceplanningconsiderationsforhydrogen121
Directaircarboncapture126
High-temperatureaqueoussolutiondirectaircapture127
Low-temperaturesolidsorbentdirectaircapture128
Resourceplanningconsiderationsfordirectaircapture128
Methanation:combininghydrogenandcarbon129
Catalytic/thermochemicalmethanation130
Biologicalmethanation130
Resourceplanningconsiderationsformethanation130
Finalthoughtsonrenewablefuels131 References134
5.Long-termcapacityexpansionplanning139
Introduction139
Costsincapacityexpansion140
Operatingexpenditures140
Fixedoperationsandmaintenance140
Capitalexpenditures141
Thesupplystackandmarginalcost142
Netloadandthesupplystack145
Real-timedispatch145
Capacityfactors147
Screeningcurves148
Loaddurationcurve151
Usingtheloaddurationcurveforlong-termplanning152
Genericfive-stepcapacityexpansionframework,traditionalapproach153
Convergencecontingentonreserveprovisionandreliability155
Productioncostmodels157
Concernsrelatedtotraditionalapproaches,particularlyforsystemswith variablerenewableenergy158
Importanceofdynamicfeatures160
Attemptedfixestothetraditionalapproach162
Advancedapproaches chronologicallong-termplanningmodels163
Capacityexpansionmodelsforregionalandpolicyinitiatives167
Finalconsiderationsforresourceplannersandanalysts168 References170
6.Illustratingconceptswithexamples173
Howflexibilityreducescurtailmentandmaximizesthevalueofvariable renewableenergysources173
Theimpactofincreasingvariablerenewableenergypenetrationonday aheadandreal-timepricing177
Examplesofvariablerenewableenergydrivingbaseloadandintermediate resourcesoutofthemarket183
Resourceplanningconsiderations184
Ancillaryservices185
Flexiblecapacityinorganizedmarkets186
ExamplefromSPP(2014)187
ExamplefromNYISO(2016)187
ExamplefromERCOT(2016)188
ExamplefromSPP(2018)190
ExamplefromCAISO(2019)191
Resourceplanningconsiderations192
Energystorage(andflexiblecapacityingeneral)inintegratedresourceplans194
Thefuturedirectionofintegratedresourceplans197 References200
7.Pathwaysto100%decarbonization203
Learningfromthepast203
Thedefinitionof “100%”:theimportanceofsemantics206 Pathwaysto100%207
Thepathto100%renewable208
Thepathto100%carbon-free214
Thepathto100%carbon-neutral(net-zero)218
Summaryofthepathwaysto100%223
Acomparisonofdifferentpathwaysusingcapacityexpansionanalyses224
New-buildcapacitybyscenario226
Landuse226
Generation,load,curtailment,andairemissions227
Timingofuseofpowertomethaneinthe100%carbon-neutralscenario228
Long-termstoragepotentialofpowertogas229 Costs230 Summary231
Finalthoughtsonpathwaysto100%andtheimportanceofresourceplanning232 References234
Preface
Electricutilitiesmustcontinuallyreassesswhenandhowtheyinstallnew generationcapacitytomeetloadreliably.Formanyyearsthepoolof technologiesutilitiescouldchoosefromwasrathernarrow,andassociated costs,performance,andotherfactorswerewellunderstood.Accordingly, theycouldusestraightforwardapproachestowardvaluationtomake choicestheywereconfidentinandwereeasilyunderstoodbyshareholdersorregulators.Theseplansaremostoftencontainedinanintegratedresourceplan,orIRP.TheIRPisadocumentpreparedona recurringbasisthatprovidesaroadmapoftheutility’splansforcapacity expansion,associatedcosts,andfinancialimpacts,andadescriptionof howvaluationswereperformedtojustifychoices.Whileallutilitiesare notrequiredtoproducepublicversionsofIRPdocuments,practicallyall electricutilitiespreparetheseplansonaregularbasis.
Todaytheelectricpowersectorisbeingdrivenbyacommondesire todecarbonize,couchedintermsof100%renewableenergy. Commitmentsaremadetograduallyphaseoutfossilfuelsandreplace energyproductionwithsolar,wind,hydroelectric,andothercarbon-free energysources,suchasnuclear.Energystorageisrequiredtotime-shift overproductionofrenewableenergytoperiodswithlullsinthesame. However,seriouscomplicationsarisewhentryingtoapplylegacyresource planningapproachestomoremodernpowersystems.Forexample,equilibriumenergybalanceassumptionsembodiedinload-duration-curve capacityexpansionapproachesassumeallresourcesaredispatchableand onlygenerateonlywhenneeded.Cleanpowersystems,incontrast,have largeamountsofnondispatchablesolarandwind,whichhavebothseasonalfluctuationsandvolatileoutput,requiringnewandmoreexplicitly time-dependentapproachesforplanningpurposes.Theplanningprocess ismadeevenmorecomplexbythemuchwiderpooloftechnologiesto choosefrom.Forexample,itwasnottoolongagothattextbookson energyeconomicsdescribedelectricityasacommoditythathadtobe instantlyconsumedbecauseitcouldnotbestored.Todaythereareahost ofrenewableenergystoragetechnologieseachwithdifferentattributes, cost,performance,scalingcapabilities,andsoon.Thereisgrowingawarenessoflanduserequirementsforrenewables,anewdimensionthatraises environmentalconcerns.Thethoughtprocessesandmathematicsbehind
Preface
legacyplanningapproachesaresimplyinsufficienttosupportthisnew renewabledominatedworld.
Whilemanyelectricutilitiesareexploringnewandmoredynamic planningapproachestoformthebasisoftheirIRPs,myobservationhas beenthatwe “arenotquitethere” yet.UtilitiesuseIRPplanning approachestheyarefamiliarwith,andoftenthisiswhatisexpectedfrom shareholdersandregulators.Butasweaddmorevariablerenewables,the outcomesoftenfallshortofwhatwasexpected,evidencedbycostoverruns,higheremissions,andreliabilityissues.Changingmodelingparadigmscanbeacostlyendeavor,involvinglearningcurvesnotjustforutilities,butalsoforpolicymakersandregulators.Thecostisrathersmall, however,consideringthattheoutcomewillbeafarmoreefficientand robustpowersystemthatwillsaveratepayersbillionsofdollars.
Thisbookwaswrittentoprovideguidanceforthetransitionfrom simplelegacyplanningtomoredynamicstate-of-the-artapproaches requiredforhighrenewablepenetration.Anoverviewoftheoriginsof electricutilitiesandsimpleplanningapproachesusedinthepastsetsthe stageforhowwegottowherewearetoday.Theevolutionofsolar, wind,andotherrenewabletechnologiesaswellasenergystorageispresented,withdiscussionofhowtheiruniquefeaturesnecessitatenewplanningapproaches.Newplanningapproachesarepresentedalongwith examplesofutilitiesonthecuttingedgeoftheplanningspace.Numerical examplesareprovidedtodemonstrateconcepts.Andfinally,areviewof differentapproachestoa100%cleanenergystateisprovidedtoguide plannersandpolicymakers.Thetargetaudienceforthisworkincludes utilityexecutives,staff,analysts,policymakers,consultants,regulators, environmentalists,andacademicsinterestedinhowwecanreach100% cleanenergytargets.
Introductiontoelectricutilities andhowtheyplanforthefuture
Introduction
Affordableandreliableelectricityisafundamentalbuildingblockof modernsociety.Electricityprovidescleanlightinginourhomes,atour workplaces,onthestreets,withnosmokeorfumesfromopenflames. Weuseittocoolourhomesinthesummerandheattheminthewinter. Itbreatheslifeintoindustrialfacilities.Silentandunseen,itsunceasing flowallowsustotapintothedigitalworldwithourtelevisions,computers,andsmartphones [1]
Billionsofpeopledependontheelectricalgrideverydaywithout thinkingofwheretheelectricitycomesfrom.Atmosttheymightthink ofitinpassingwhentheelectricitybillarrivesfromthelocalutility. Thereis,however,agrowingconsensus,fromeverydaypeoplethrough thehighestpoliticalbodies,todivestfromfossilfueluseduetoenvironmentalconcernsrelatedtoCO2 emissions,whicharebelievedtodrive climatechange.Greaternumbersofpeoplearepressuringtheirgovernmentsandutilitiestostrivetowardtheuseofcarbon-free,renewable resources,withsomedemandingthat100%ofourelectricitycomesfrom renewablessuchaswindandsolar.
Mostpeoplearenotawareofthecomplexindustrial,engineering,and economichurdlesthathadtobeovercometogettowherewearetoday, letalonewhatitwilltaketogetwheretheywanttogo.Understanding thehistoryoftheutilityindustry,combinedwiththeemergenceofnew formsofenergyproductionandstorageandtheanalyticsrequiredtostitch allthepiecestogether,iscriticalformodernizingandadvancingtowarda worldwith100%affordablerenewableenergy.Wemustunderstandfundamentalquestionsandhowtoanswerthem wheredoeselectricity comefrom,andwhatdoesitcost?
Whiletherearecountlessopinionsandideasaroundtheproduction andconsumptionofelectricity,tounderstandtheissues,werequirea commonunderstandingofhowelectricutilitiesoperateandplanforthe
future.Long-rangeplans(LRPs),alsoreferredtointheindustryas integratedresourceplans(IRPs),areplanningdocumentsusedbyutilities tocharacterizetheirbestviewofthecomingyears;5,10,ormoreyears intothefuture,andtodeterminetheoptimalmixofresourcestheymust maintaintosatisfycustomerloadsandmaintainreliability.Theplantypicallyaccountsforchangingloadprofiles,variationsinexpectedfuelprices, existingpowerplants,andpotentialretirementofthesameaswellasthe needfornewresources,whattheycouldpotentiallybe,andtheircosts. Oncethesefactorsareaccountedfor,theymustbeanalyzedtoanswer thefollowingquestion:Whatmixofresourcesforsomefuturedateprovidesmaximumreliabilityatlowestcost?Aswewillsee,usingthesame assumptionsforagivenutility,onecangetdramaticallydifferentanswers dependingontheanalyticalapproachusedtoaddressthequestion.
Manyutilitysystemstodaystilluseapproachesthatweremodern 50yearsago,however,morerigorousapproachestoplanningprovidea moreaccuratepictureinaworldwithhigh-renewablepenetration. Simpleapproachesthatworkedinthepastdonotstrictlyapplytomodern powersystemsbecauserenewablesourcessuchaswindandsolardonot behaveatallliketraditionalfossil-fueledgeneration.Thischapter addressesthehistoryoftheelectricutilityindustryandintroducesthe thoughtprocessesandchallengesutilityplanners,policymakers,regulators, researchers,andpoliticianshavefacedinthepast.Itdiscusseshowthat institutionalmomentumisdrivingsomeoftheoutcomesweseetoday andinfluencingourplansfortomorrow.
Electricutilities:thebasics
Therearethousandsofelectricutilitiesacrosstheplanet,eachwithits owntechnologymixinitspowergenerationportfolio,fromhydropower tonuclear,fromcoaltonaturalgas,frombiofuelstorenewables.They eachhavedifferentlocalizedidiosyncrasiestodealwithandvaryingregulatorypressures.Dependingontheutility,theycanevenhavedifferent missionstatements.Forexample,amunicipalelectricutilityexiststoprovidereliablelow-costelectricitytotheresidentsofthatcity,anddecisions aremade,toalargeextent,byelectedcitycouncilsand/ormayorswho mustanswertovoters.Atabroaderscale,somegovernment-ownedutilitiesprovidesimilarservicestoentirenations,withdecisionsmadeagain byelectedofficials.Electriccooperatives,member-ownedutilities,tasked withprovidingreliableelectricitytoresidentswithintheirfootprintalso
strivetominimizecostsforcustomers,anddecisionsaremadebytheir boardofdirectors.Thenthereareinvestor-ownedutilities(IOUs).These canbelargeorsmall.Theyarerequiredtomaintainreliabilityandcompetitivepricing,whichisgenerallycappedorsubjecttomarketratesset byregulatorybodiesbutareprofit-makingbusinesses.Acrossthis,spectrumofutilitytypesisanoverlayofgovernmentregulationsandgoverningbodieswhosepurposeistoensurecompliancewithlawssuchasair emissionstandardsorrenewableportfoliostandards.
Onecommonfactorcutsacrossallutilitytypes.Theyplaninaway thatminimizescosts,whichischallengingastherearenumerouscoststo consider;operationalcostssuchasfuel,staffing,andmaintenance;capital costssuchasnewpowerplantsormajoroverhauls;compliancecostssuch asadditionofcomplicatedandexpensiveemissioncontrolsonanolder plant.Lowercostsmeanlowercustomerpricingor,forIOUs,greater profit.
Iftheutilitiesarefocusedonreducingcost,itwouldbenaturaltoask how “cost” isdefinedand/orcalculated.Thisseemslikeasimplequestion,untilyoudigintothedetails.Severalfactorswerementionedabove suchasfuel,capitalcost,compliancecosts,etc.Theseareeachcomplicated,interrelated,andoftentime-dependent.Forautilitytoprovethey areminimizingcost,eithertothemselves,toregulators,ortocustomers orvoters,theremustbesomecommonbasis,orsoonewouldthink.In reality,theconceptofquantifyingcostsisanevolvingdiscipline.There arecountlesspeer-reviewedarticlesinengineeringandeconomicsjournals overthecourseofdecadesdedicatedtoquestionsrelatedtohowcostsare calculatedforutilities.Andthereareahostofapproachesusedinpractice thatcanvarydramaticallyfromoneutilitytothenext.Givengreater resourcechoices,evergreaterregulatoryandsocietalpressures,andevolvingtechnologies,thecomplexityofthequestionhasonlyincreasedover time.
Allutilitiesareatsomestageonthe “evolutionaryscale” ofcostcalculationsthatstartedwiththesimplisticapproachesofthefirstutilitiesand progressedthroughever-morecomplexmethodologiestowhatisconsideredthestate-of-the-arttoday.Thecomplexityofthecostquestion increasedasthenumberofpowerplantsgrewtokeeppacewiththedramaticexplosionofelectricityconsumersacrossbroadergeographic expanses.Newtechnologiesemergedwithvaryingcostsandreliantona widerarrayoffuels,inadditiontohavingwidelydisparatetechnicalfeaturessuchasstarttimes,startcosts,minimumupanddowntimes,
minimumstableloads,varyingneedsforemissioncontrols,andwateruse. Approachesthatworkedwellfortheearlyutilitiesarenotapplicablefor thelargemodernutility.Thereare,however,legacyissues.Utilitystaff andmanagementmaybecomfortablewithacertainmethodologyand apprehensiveofinvestinginthetrainingandsoftwarenecessarytoapply morecomplexapproaches.Thetrendtowardmoderncostoptimization approachesishappening,butnoteveryoneisatthesameplaceonthe evolutionaryscale.
Tounderstandhowandwhythisrangeofcost-economiccalculations evenexistsrequiresunderstandingabitabouttheearlyhistoryofelectric utilitiesandtheevolutionoftheapproachesintime.Thisfirstchapterof thebookisdedicatedtoanexplorationoftheearlyhistoryofelectricutilitiesthroughthemoderndayandanintroductiontobasicplanning approaches.Thisinformationwillformabuildingblockforthefollowing chapters.
Theearlyhistoryoftheelectricutility
Thefirstexamplesofelectricutilitiesemergedinthe1870swiththe world’sfirstgeneratingstations,facilitiesthatusedsomething,beitwater/ hydropower,orcombustionoffossilfuels,togenerateelectricity.Theinitialdriverwastotakeadvantageofthenewlyinventedlightbulbasan alternativetogas/kerosenelampsand/orcandles.OneofthefirstgeneratingstationswasinstalledbyLordArmstrongtopowerhishousein1878. LordArmstrongbuiltanestatecalledCragside,locatedin Northumberland,England,inwhichheintegratedahydroelectricgeneratortoproduceelectricitytopowereverythingfromelectriclightstoa dishwasher [2].ThenearbycityofGodalming,in1881,builtthefirst streetlampsthattookadvantageofelectricityfromhydropower [3]
In1882,ThomasEdison’sEdisonIlluminatingCompanybuiltthefirst coal-firedgeneratingstationinManhattan,UnitedStates.Thisfacilitywas calledthePearlStreetStationandinitiallyservedfewerthan100customers,includingstreetlightingandbuildinglighting.Within2years,the numberofcustomershadincreasedto500.Theconceptofagenerating stationwithinamunicipalityspreadrapidly.Forexample,theBoroughof Chambersburg,PA,lessthan300milesfromManhattan,startedofficial discussionsofwhatitwouldtaketobuildapowerplantintheirtownin Augustof1888.BySeptember1889,theresidentsofChambersburg votedonabondresolutiontofundtheplant,andbyFebruary1890,
5 Introductiontoelectricutilitiesandhowtheyplanforthefuture
the “lightswenton,” poweringatotalof40streetlamps.TheBorough ofChambersburgisstillintheutilitybusinessandisoneoftheoldest municipalutilitiesintheUnitedStates [4].Theemergenceofmunicipal utilitiesquicklyspreadsacrossNorthAmerica.Forexample,while Chambersburg,Pennsylvaniawasconsideringapowerplant,thecityof Albuquerqueopeneditsfirstelectriclightutilityin1883,almost30years beforethestateofNewMexicowasadmittedtotheUnitedStatesasits 47thstate [5].In1886,JapaneseimmigrantHutchlonOhnickwasgranted afranchiseforgasandelectricservicebytheCityCouncilofPhoenix, Arizona,givingrisetothePhoenixElectricLightCompany(Fig.1.1). Thefirstpowerplanttheybuiltwasa “fiftyhorsepower” unitthatcould power45lightsat1500candlepowereach,byburningmesquitewood collectedinthesurroundingdesertandhauledtothesitebymules [6] ThePhoenixElectricLightCompanywasthefoundationofwhatwould laterbecomeArizonaPublicService,aregulatedIOUnowserving
Figure1.1 DisplayinlobbyofArizonaPublicServiceheadquarters(Phoenix,AZ, UnitedStates)commemoratingthebeginningsoftheutility.
2.7millioncustomers [7].Emergenceofutilitiesandexpansionofelectricalpowerwasmirroredacrosstheglobeinquicksuccession.Forexample, TokyoElectricLightingcommencedoperationinJapanin1886 [8]. TheMunicipalCouncilofSydney(Australia)firstpoweredelectriclights in1904 [9].Practicallyallofthesefirstelectricutilitiesstartedwithasingle generatingplantprimarilydedicatedtostreetlighting.
Thecommercialsuccessofthesesmallgeneratingstationswasnot guaranteed,asstreetlightingwastraditionallyprovidedbygascompanies. Fiercecompetitionarosebetweenthenewlyfoundedelectricutilitiesand gassuppliersparticularlyforlightingofpublicspacessuchasstreets [10]. Asgenerationanddistributionofelectricitybecamemorecost-effective,it wasnaturalformunicipalitiestoconsiderelectriclightingasacosteffectivealternativetotraditionalsources.Theinventionofelectricstreet carsinthe1880sgreatlyexpandedthepotentialneedforelectricityfrom astrictlynight-timeservicetosomethingthatwasneededtosomeextent allday,everyday [11].This,inturn,droveupdemand,whichledto competitionandtechnologicaladvances,whichinturnledtorapidly growingeconomiesofscaleandreductionofelectricityprice.
IntheUnitedStates,by1900electricitysalesexceeded100million USdollars [12],andtheservicewasexpandingbeyondafewsimplelight polesdirectlyconnectedtoageneratingstation.Itbecamequicklyapparentthattheindustryhadtoprovideinfrastructuretoservethedemand basedonthreecentralpillarsthatarestillthebackboneofeveryelectric powersysteminexistencetoday;
Generation:ThesourcesthatgenerateMWfordeliveryacrosstransmissionanddistributionsystems.
Transmission:Theinfrastructureneededtomovelargevolumesof high-voltageelectricityfromgeneratorstothedistributionsystem(s)to serveload.Volumesofelectricityaremovedathighvoltagebecauseit ismoreefficientandcost-effectivetodosointhismanner.
Distribution:Theinfrastructureneededtostep-downhigh-voltageelectricitytolowervoltagesthatcanbeuseddirectlybytheenduser(s).
Earlyontheelectricneedsofconsumersweremetbyamixofsmall privateenterprises,suchasthePearlStreetStation,ormunicipals,suchas theBoroughofChambersburg.MunicipalsdominatedintheUnited Stateswithmorethan3000municipallyownedpowercompaniesinthe early1920s.However,privateutilityholdingcompanieswereformed andinthebusinessofbuyingandconsolidatingtotakeadvantage ofeconomiesofscale.Somuchsothatbytheearly1930smorethan
1200municipalelectricutilitieshadgoneoutofbusinessorbeensold [11,13].By1932intheUnitedStatesprivatelyheldIOUsgenerated andreceivedrevenuesformorethan95%ofallMWhsoldinthe UnitedStatesandprovidedelectricitytomorethan90%ofallcustomers [10,11,14].Someorallofthetransmissionanddistributionserviceswere retainedbymunicipalorstateagenciesandhavesincebeenovertakenby thesameconsolidation,sothattoday’stransmissionanddistributionare oftenheldbylargeIOUsaswell.In2019,theelectricitygeneratedby IOUsintheUnitedStatesservedmorethantwo-thirdsoftheUSpopulation,withtheremainderbeingprovidedbyamixofmunicipalutilities, member-ownedelectriccooperatives,andasmallnumberoffederally chartered,government-runutilities.
Theearlystagesoftheevolutionofcostapproaches
Regardlessoftheorganizationofanelectricutility,publicorprivate,economicplanningforasmallstationintheearly1900swasratherstraightforward.Thedecisionvariablesincludedataminimum,andnottaking considerationoftransmissionordistribution,thefollowing;
Capacity(MW):anestimateofcapacityneeds,howmanykWor MWtheplantcouldbeexpectedtoserveatanyoneinstantintime, typicallysizedforthemaximumorpeakload.
Energy(MWh):anestimateoftheenergythatwouldbegenerated,in termsofMWneedtimesthetimeneededtoprovideforthatload, oftenexpressedasMWh.
Owners’ cost($perkWofcapacity):costtobuildthepowerplant, includingthecostoftheequipment,costtoinstalltheequipment, landpurchase,anyinfrastructureimprovementssuchasroads,andthe costtoconnecttheplanttotransmissionordistributionnetworksas wellaspermittingandlegalcosts.
Fuel:typeoffuelusedandcostofthefuel.
Efficiency:efficiencyofthepowerplantdeterminestheamountand subsequentcostoffuelneededtogenerateMWh.
Operationalcost:annualcoststorunandmaintainthefacility,fromthe costofpayrollandbenefitstopropertytaxesand/orutilitiessuchas sewerorwater.
Puttingallofthesefactorstogetherallowsone,viaanumberofsimple algebraicapproaches,toestimatethetotalcostofprovidingpowertocustomers.Thisallowstheplantownertodeterminewhattheymustcharge
perMWhofelectricitygenerated,alsoallowingforanyprofitmarginsor requiredreturnoninvestment.IfthecostperMWhtoprovideforstreet lighting,forexample,islessthanthealternativegas-firedlampsthenelectriclightingiscompetitive.
Intheearlystagesofutilitydevelopment,theinvestmentdecisions wereratherstraightforwardastherewereonlyahandfulofcompanies thatmadeequipmentthatcouldgenerateelectricity.Theequipmentwas basedonaverynarrowpooloftechnologychoicesandfueloptionswere limited.Astimewenton,ahostofchangeshappenedacrosstheelectric utilityspace,includingtheconsolidationofsmallerutilitiesintolarger onesandcoveringbroadergeographicranges.Nowcitiesbecameloads, andthegeneratorswerenotalwaysneartheload,requiringtransmission linestomoveenergyfromwhereitwasproducedtostep-downstations thatenergizedistributionsystems.Autilitycouldnolongersimplysay theyhad100customersbeingservedby1plant,theycouldhavetensof thousandsofcustomersacrossbroadexpansesbeingservedby10,20,50, ormoregenerators.Powerdeliveryincreasinglybecameanetworkproblem,withtheloadsconsideredasnodesorsinks(ofMWh),thegenerators beingsources(ofMWh)andthetransmissionsystembeingthenetwork ofphysicalcablesmovingMWhfromsourcestosinks.Whilecomplexitiesrelatedtonetworksystemsarerelevant,theideaofhowchanging technologyandfueltypescomplicatecostdecisionswas,andstillis,afundamentalissueinutilityplanning,soletuslookatsomeofthetechnologiesthatemergedduringtheearlyyears,uptothe1960sand1970s.
Varyingtechnologytypesthatmadeup(andstillmakeup) thegenerationmixofmostutilities
Historicallypowergenerationreliedonfuelcombustion.Fuelssuchas coaltooilsofvarioustypes,towoodorotherformsofbiomass,togaseousfuels(naturalgas).Ingeneral,fuelisburnedtoprovideadriving forceforashaftthatinturnspinsageneratorthatgenerateselectricity. Thesameistrueforhydroelectricandwindturbines,whichsimplyuse waterandwindforthesamepurpose.Regardless,powerplantsthatburn fuelaregenerallyreferredtoasthermalplants.
Inthermalplants,fuelisburnedinacombustionchamber.Thecombustionchamberadmitsairandfuel.Carboninthefuelreactswithoxygenintheairtoprovideheatandpressure,whichareconvertedto mechanicalpowerthatdrivesashaftconnectedtothegenerator.Insome
cases,aswithcombustionturbines(CTs),theproductsofcombustion driveturbinebladesconnectedtotheshaft.Inothers,suchasreciprocatingengines,combustionmovespistonsthatareconnectedtotheshaft. Boilerplantshaveacombustionchamberconnectedtoheatexchangers thatconvertwatertosteam,whichisthenusedtospinasteamturbine connectedtoashaft(thatturnsagenerator).Inallcases,theheatofcombustionisconvertedtomechanicalenergyandthentoelectricity.The combustiongasescoolintheprocess,sothatwhatcomesoutasexhaustis veryhot,butconsiderablycoolerthanthetemperatureinthecombustion chamber.
Coalboilerplants
Acrosstheentirehistoryofcoal-firedpowergeneration,onethinghas remainedconstant.Inallcases,thecoalisburnedinaboilerthatextracts heatfromthecoalcombustionandusestheheattoconvertwaterto steam.Thisboilerisoftenreferredtoasaheatrecoverysteamgenerator (HRSG).Thesteamisthenusedtoturnasteamturbinewhichisconnectedtoagenerator,whichmakeselectricity.
Coal-firedpowerplantsaresimila rtomostthermaltechnologiesin thatbiggerisbetter.Thelargertheplant,thegreatertheeconomyof scale,andthelowertheinvestmentcostonaperkWbasissimultaneous withmaximizingfuelefficiency.A1000MWcoalplantwillhave lowercost($/kWowners ’ cost,andhigherefficiency)thana10MW coalplant.
Acoal-firedboilerplantintheearly1900smightbeinthe 1 10MWsizerange [15] withanefficiencyof10% 15%.By1930s, coal-firedplantsinthe300MWrangewereavailablewithhigherefficiencies.By1970s,unitratingsinexcessof1000MWwerethenorm, withnetefficienciesgreaterthan30%.Netefficiencyreferstothefuel neededperMWhofenergydeliveredtothetransmissionsystemandis differentthangrossefficiency.Grossefficiencyreferstotheamountof fuelneededperMWhasmeasuredatthegeneratoritself.Netefficiency accountsforparasiticloads,lossesacrossthestep-uptransformer,and anyloadswithintheplantitself,suchaslighting.Netefficiencyisthe metricofmeaningforutilityplannersasitmeasuresthefuelneededto provideuseableenergy,whilegrossefficiencyisoftenusedbyequipmentOEMsasthatistheefficiencytheycanmeasureandtestin manufacturingfacilities.
Theprevalenceofcoalasanabundantandlow-costfueliswhycoalhas been,andinsomeplacesisstill,thedominantfuelsourceforelectricity.As of2019,countriessuchasIndiaandChinaproducemostoftheirelectricity withcoal,althoughtheshareofcoalgenerationisexpectedtofallwith time.IntheUnitedStates,from1950to2000,coalprovidedbetween45% and60%ofallUSpowerneeds,droppingsharplyafter2000asaggressive environmentalregulationslimitingcoalcombustionwereputinplace. However,thebiggerfactorleadingtocoalsreduceddominanceinthe UnitedStateswastheemergenceofhydraulicfracturing(fracking)fornaturalgas,whichprovidedalowercostfuelandlowersubsequentpower prices,puttingcoalgenerationatacompetitivedisadvantage.
Coalplantsareasubsetofabroaderclassofgenerationtechnologies referredtoasboilerplants.Alternatefuelscanbeburned,suchasbiomass ornaturalgas.Giventhelargeinvestmentutilitieshavemadeintocoalfiredboilerplants,insomecases,itisadvantageoustoconvertthemto burnnaturalgasasopposedtoretiringthemThisallowsthemtoleverage thelowerfuelprices,higherefficiencies,andloweremissionprofileof naturalgascombustion. [16].
Combustionturbines
TheCTistheworkhorseofmostmodernutilities,abletoburnseveral fuelsfromliquid/oilstonaturalgas.Thefirstpatentforthetechnology wasfiledbyJohnBarberintheUnitedKingdomin1790s.Itwasnot until1939thatthefirstworkingexampleofanythingresemblingamodernCTwasinstalled,a4MWunitatamunicipalpowerstationin Neuchatel,Switzerland,withanefficiencyof17%[17].Inpost-World WarII,therewasaracetodevelopCTsforaircraftpropulsionandstationaryuse.In1949thefirstCTtogeneratepowerintheUnitedStates wasinstalledattheBelleIslefacilityinOklahoma,byOklahomaGas& ElectricCompany [18].The3.5MWturbinewasaddedtoanexisting coal-firedpowerplant.Sincethattime,thebasicinnerworkingsofCTs haveremainedvirtuallyunchanged,withbetterefficienciesandeconomies ofscalemostlyaproductofadvancesinmaterialssciencethatallowsfor higheroperatingtemperatures.Atpresent,awiderangeofmanufacturers providesCTsinsizesrangingfrom1MWtomorethan500MWper unit.Efficienciesformodernunitsrangefrom30%to40%,dependingon thetypeandsizeoftheCT,andtheycanburnanumberoffuels,from kerosenetooiltonaturalgas.
Ingeneral,CTsfallintotwogroups,referredtoas “Frame” and “Aero,” shortforaeroderivative.FrameCTsaregenerallylarge,many greaterthan100MW,anddesignedforindustrialorelectricutilityuse. Theyaretypicallylowcost(ona$/kWbasis)andhavelowerefficiencies thanAeroCTs,inthe30% 35%range.FrameCTsaretypicallyusedfor peakingserviceswithlowrunhoursperyearandaregenerallynotconsideredforlong-runhoursorforfrequentstarts.AeroCTsarederived fromaerospacepropulsiondesignsandaremorecompactandmoreefficientthanFrameCTs,around40%.Theyaregenerallysmallerinoutput, withthelargestunitsreaching100MW,andareusedforapplications rangingfromintermediate(afewthousandhoursperyear)topeaking(a fewhundredhoursperyear).
CTsaresensitivetoaltitudeandambienttemperature,withoutput andefficiencyfallingathigherelevationsandhighertemperatures,mainly duetodecreasedairdensityrelatedtoeach.TocompensatesomeCT installationsuseintercoolers,whichremoveheatfrominletairand increaseairdensityenteringthecombustionchamber,allowingtheCTs tomaintainoutputandefficiencyathighertemperatures.Other approachesusedirectwaterinjectiontoincreaseoutputandboostefficiency.Intercoolingandwaterinjectionaretypicallyfoundonmore advancedAeroCTs.
Combined-cyclecombustionturbines
Ajetengineforaircraftpropulsionusestheexhaustenergytomovethe planeforward.WhenageneratorisaddedtoaCTforland-basedpower generation,muchofthatexhaustenergyisusedtoturntherotorsthat turnthegenerator,butagoodamountoffuelenergyleavestheunitas hotexhaustgas.Thatis,ifaCTtakes100unitsoffuelinandgenerates 30unitsofelectricity,theremaining70unitsoffuelenergyissentout thestackashotexhaust.Startinginthe1940s,engineersleverageddecades ofexperienceinboilerplantstoleveragetheheatfromCTexhaust.The firstuseofCTheatrecoveryoccurredin1949,whenGeneralElectric (GE)usedtheexhaustheatfromaCTtoperformfeedwaterheatingofa 35MWconventionalboilerplant [19].WhileanexampleofheatrecoveryfromCTs,boilerpreheatingisnotstrictlyacombinedcycle.Thefirst combined-cycleCT(CCCT),takinghotexhaustgastomakesteamto powerasteamturbine,wasinstalledbyanAustrianutilityatKorneuburg in1960withanefficiencyof32.5% [20].
TheallureofcombiningtheCTwithanHRSG/steamturbineis thatyoudonothavetoburnanymorefuel,ratheryouaresimplygettingmorepowerout.Thus,a100MWCTwitha35%efficiencycan belinkedwithanHRSGandasteamturbinetogenerateapproximately 30MWmorepowerwithoutburninganyadditionalfuel.WhilemodernCTefficiencytopsoffatappr oximately40%,thesameunitin combined-cycleconfigurationcanachieveefficienciesof50% 55%,and insomecases,evenhigher.Likecoalpowerplants,combined-cycle plantsbecomelessexpensive($/ kW)thelargertheplant.Fully predesignedandpreengineeredcombined-cyclefacilitiesweremade availabletotheutilityindustrybyGEandWestinghouseintheearly 1960s.
FrameCTsaretypicallypairedwithHRSGsandsteamturbinesdue totheirlow$/kWcostandlowersimplecycle(CTonly)efficiency. ACTwithlowerefficiencyrejectsgreateramountsofhightemperatureexhaustgasthanamoreefficientAeroCT.ThislargerstreamofhighertemperaturegasfromFrameCTsisbettersuitedformaximizingthe efficiencyoftheHRSGandsteamturbine,suchthattheoverallefficiency ofaframeCT-basedCCCTishigherthanthatfromaCCCTusinga moreefficient(andmoreexpensive,ona$/kWbasis)AeroCT.
Reciprocatingengines(Recips)
In1794,ThomasMeadandRobertStreeteachobtainedpatentsin Englandforwhatcanbeconsideredthefirstspark-ignitedinternalcombustionengines.Inthelate1850sandearly1860s,BelgianengineerJean J.Lenoirmadeadvancesinspark-ignitionReciptechnology,leadingto thefirstmass-producedRecipenginesinFrance,thenlaterinEngland, foruseinhorselesscarriages.Thisadvancewasnotedbythemagazine “ScientificAmerican” in1860claiming “theageofsteamisended” by Lenoirsengine,inreferencetoRecipenginesenvisionedasreplacing steamenginesforlocomotiveandpropulsionpurposes [21].Further advancementsweremade,includingGeorgeBraytonspatentsinthe 1870sformultipistonspark-ignitedinternalcombustionengines.Thefirst gasoline-typeenginethatresembleswhatwenowcalla “gasolineengine” forcarsandtruckswasinventedbyNikolausOttoin1876,usingameans tocompressthefuel-airmixturewhichinturnincreasedefficiency.Inthe 1890sRudolfDieselfiledablitzkriegofpatentsinseveralEuropean countriesandintheUnitedStatesforvaryingdesignstagesofinternal
combustionreciprocatingenginesthatreliedoncompressionignition. Unlikespark-ignitedengines,highcompressionratiosindieselengines auto-ignitethefuelmixture.MostearlyapplicationsofRecipswerefor automotiveandmarinepropulsion.
Mostpeopleknowof “engines” assomethingfoundincars,trucks, anddiesellocomotives.Theyallhaveaseriesofcylindersthatcombust fueltomoveapiston,whichinturnrotatesashaft.Thatshaftcanbe usedtopropelavehiclethroughadrive-shaft,topropelaboatviaapropeller,ortoturnageneratortomakeelectricity.Themajorityoflarge transportandcruiseshipsonthehighseasusemassivereciprocating enginesforpropulsion,withsomeunitsbeingcloseto100MWinsize. Whilesmallerpowergeneratingunitsaretypicallyandhistoricallyused foremergencypowerathospitalsorothercriticalinfrastructure,theyhave beenusedforprimarypowergenerationbyutilitiesfordecades.Installed globallyforsmallerapplications(sub10 20MW),itwasnotuntilthe 1970sthatsomeofthefirstlarge-scale(100,200 1 MW)reciprocating enginepowerstationswerebuiltinLatinAmericatopowereconomies thatdidnothaveaccesstocoalornaturalgasbutdidhaveaccesstolowcostliquidfuelsthatcannotbeburnedinCTs.Theseoil-firedRecip plantsusedcompressionignitionengines.Morerecentlyspark-ignitednaturalgas-firedRecipmachineshaveenteredutilityserviceinmarketswith accesstonaturalgas.
TherearethreedifferentcategoriesofReciptechnologiesbasedon rotationalspeed:high(1000 1 rpm),medium(500 900rpm),andslow (sub150rpm)speed.Anyofthesecanbecompressionignited(diesel), sparkignited(gaseousfuels),ordualfuel(capableofburningliquidorgaseousfuels,dependentoncompressionignitionofaliquidpilotfuel).The sizeandefficiencyincreasewithslowerspeeds.High-speedmachinesare lowefficiencybutsmallandcompact,idealforbackup/standbyorpeakingpowergeneration,generallyunder5MWinsize.Slow-speed machinesaregenerallycompressionignited,runningonliquidfuels,with veryhighefficiency,butarelarge(50 1 MWperunit),andmostoften usedforshippropulsion.Therearesomestationarypowerplantsusing slow-speedRecips,buttheirlargesizemakesdeliverytoinlandsitesdifficultandexpensive.ThemajorityofstationaryRecippowerplantsuse medium-speedmachines,typically5 20MWperunit,whichboasthigh efficiency,arerobustacrossawidearrayofoperationalprofilesandcanbe transportedtoremotesiteswithcommerciallyavailableequipmentsuchas barge,rail,ortrailer.
Theallureofreciprocatingenginesistheirhighefficiencyand flexibility.Whileaboilerplantcanburnoilorgas,itsefficiencymaxes outataround30%.Reciprocatingenginesburningthesamefuelcan exceed40% 45%efficiency.Duetotheirsuccess,furtherevolutionsin thetechnologyresultedinreducedstarttimes,makingthemidealfor renewableintegration.Unitsizeforpowergenerationrangesfrom 5 20MW,andapowerstationtypicallyconsistsofmultipleunitsfor plantsizesof100,200,ormoreMW.Thelargestreciprocatingplant todatewasbuiltinthecountryofJordanin2014,a600MWmultifuel (gasandliquid)plantcomprisedof38WärtsiläRecipengines.
Hydro
Hydrohaslongbeenastapleofpowersystems.Longbeforehydropower wasusedtogenerateelectricity,ithadbeenusedtoprovidemechanical powerandwasinstrumentalintheindustrialrevolution.ThefirsthydroelectricpowerplantintheUnitedStateswasa12.5kWunitinstalledin Appleton,Wisconsinin1882.Within7years,morethan200hydroelectricplantswereinoperationintheUnitedStates.Mostofthehydropowerisprovidedbyreservoirs,whereariverisdammed,andwater releasedfromthebaseofthedamspinsturbinesthatgenerateelectricity. In1936,theHooverDam,whichcapturedtheflowoftheColorado River,wasopenedandgenerated1345MWofelectricity.Morerecently, theThreeGorgesDaminChinawasbuilttogenerate22,500MW. SomecountriesincludingBrazil,Canada,Norway,andVenezualageneratemorethan50%oftheirelectricityusinghydro.Paraguayisentirely poweredbyhydro.
Whilehydrofacilitiesofferrenewableenergy,theycanbequite expensiveandarethemselvesmassivecivilengineeringprojectsthatcan takedecadestocomplete.Morerecently,concernsovertheecological impactsofdamsonaquaticlife,riverhealth,andbiodiversityhavenarrowedthenumberofpotentiallynewhydrogeneratorstoasmallnumber,particularlyindevelopedcountries.
Nuclear
Andfinally,nuclearpower.Thefirstnuclearpowerplantinstalledinthe UnitedStateswasa60MWfacilityin1957attheShippingportAtomic PowerStation,locatedontheOhioRiverandoperatedbyDuquesne LightCompany.Energyfromthisplantprimarilyservedthecityof
Pittsburgh,Pennsylvania,for25years.Thisplantwasretiredin1982,but itprovidedsomeoftheearliestreal-worldknowledgeonthesafeoperationofnuclearpowerfacilitiesandledtoanexpansionofnuclearpower intheUnitedStates.By1989,109nuclearreactorswereinoperationin theUnitedStatesservingcloseto20%ofallelectricload,secondonlyto coalgeneration.
Asof2019,theWorldNuclearAssociationreportedthat450power reactorsproduced11%oftheworlds’ electricity [22].In2017therewere 13countriesthatproducedatleast25%oftheirelectricityfromnuclear powerreactors.Ingeneral,duetoeconomiesofscale,largerisbetter, withmanymorerecentunitsexceeding1000MW.Theselargefacilities areexpensivetobuildandtakedecadestodevelopandbringonline.The dramaticfailuresatChernobylandFukushimaledmanycountriesto question,ifnothaltorevenreverse,thepaceofnucleardevelopment.
Manypolicymakersandutilities areconcernedwithmaintaining nuclearassetsalreadyinservice,astheyarelargeandcriticalpiecesof theirenergysupplyportfolio.Theyarealsocarbon-freegeneration sources,leadingsomeenvironmentalintereststopromotetheiruse overfossilfuelsources.Alargeconcernhasariseninrecentyearsgiven thefactthatnuclearreactorsarenotflexible.Theyaredesignedtorun atfullloadforthousandsofhoursinarow,theyarenotdesignedto start/stoporcyclefromlowtohighloadsonaregularbasis.Thiscan causechallengesforhigh-renewablesystems,particularlywhenwind andsolarareprovidingallorclosetoalloftheMWneedsforagiven hour.Whatdoestheutilitythendowithitsnucleargeneration?They cannotcyclethenuclearunitdownwardinoutput,solow-costwind andsolargenerationmustbereject edfromthesysteminpreferencefor highercostnuclear.Thisisalwaysapossibility,butitisnotsustainable inthelongrun.
Tothisend,anewwaveofnuclearfacilitiesisunderdevelopment, calledsmallmodularreactors(SMRs).Whileatraditionalnuclearplant hasonelargereactorproducinghundredstomorethanathousandMWs, SMRplantsmakeuseofnumeroussmallerreactors,eachlessthan 300MWinsize.Smallerinsizeandbasedonstandardizeddesigns,SMRs canbeinstalledinsmallincrementstosatisfyspecificcapacityneeds,with costbenefitsoverlargecustom-designedcentralstationfacilities.SMR designandimplementationarestillinitsinfancybutaregainingincreasing supportfromseveralgovernments,includingtheUSDepartmentof Energy [23].
Other
Throughoutthepastcentury,therewereotherformsofelectrical generationbeingdevelopedandinstalledglobally.Theseincludebiofuels, trash-to-steam,geothermal,wind,andsolarpower.However,thesupermajorityofgenerationgloballyhasbeenprovidedbythemajortechnologieslistedabove.Utilitieswitharelativelylargeshareofrenewablesin theirfleetofassetsstillhaveatremendousamountofgeneratingcapacity basedonthetechnologieslistedabove.
Howandwhyutilitieshavechosentoinstallvariousmixesoftechnologiesinthepasthasbeenbasedoneconomicandregulatoryenvironments,whichvaryregionally.Also,thetypesofgeneratingcapacity utilitiescouldconsiderwerequitenarrow.Initially,theinvestmentdecisionswereratherlocalizedandstraightforward,butasnationsbecame electrifiedandutilityloadsgrewandbecamemorediverse,theageof long-rangeplanningcameintobeing.
Long-rangeplanning(alsoreferredtoaslong-term planningorintegratedresourceplanning)
Insofarasutilitiesareexpectedtoserveinstantaneousdemandatany moment,withoutexception,planningtodayforexpectationsyearsfrom nowcanhaveadramaticimpactonwhatisinstalledtomeetfutureloads. Andplanningmustoccuryearsbeforeanyactionistakengiventheirhistoricalsize(hundredsofMW)andthetimerequiredtocompletethesiting,environmentalpermitting,financing,interconnectionstudies,fuel supplyagreements,construction,andphysicalinterconnectionwiththe grid.Whileutilitiesmaybeshiftingtowardmorerenewables,orawider arrayofsmallerdistributedgeneratingsources,theprocesscantakejustas long.Practicallyeveryelectricutilityhassomeworkingprocessforlongrangeplanning.
Long-range,long-term,orintegratedresourceplanningallrefertoa similarprocessbywhichautilityformalizeslong-termplansformaintainingreliability.IntheUnitedStates,regulatorypressuresreachingbackto the1970s [24] ledtoformalrequirementsforutilitiestofileIRPs.State andfederalagencieswereplacinggreateremphasisonensuringutilities wereproducingstrategiesthatdeliveredlowestcostsforratepayers,driven byconcernsthatthismaynotactuallybehappening.Severalstates enactedlegislationrequiringIOUstofileregularIRPswithstate
