Renewables and Grid Issues: Summary

 By Ian Page

I've been reading a lot about the problems and options for high levels of variable renewables in grids. There are over 1000 papers on the topic, usually quite hefty and often with an agenda.

This is my summary.

The VRE Suppliers View

0. In most of the world variable renewable electricity (VRE) costs less to build and install, than the fossil and nuclear alternatives cost just to run at marginal cost. Thus, there is no justification for new fossils or nuclear energy. Existing nuclear has a place until decommissioned because of its relatively low operational cost, but it is still more expensive than VRE and so its place is niched (see later).
1. TIME: From the point of view of generators of VRE the problem is that they all come online at once. Thus, all the solar is around noon, and all the wind is when there's a decent gale. This means that at high levels of VRE in the grid they are competing with themselves and the LVOE (linearized value of energy - my term for the total amount of cash you will get over the life of the project divided by the total amount of electricity that could be generated) will drop to or below the LCOE the linearized cost of energy. Since the marginal cost of both wind and solar is zero, there's an inevitable race to the bottom in any bidding system.
2. This effect destroys the business model for baseload such as nuclear, coal, combined cycle gas since when there is VRE they, being more expensive, are undercut in bidding and must either turn off or go into spinning reserve without outputting any chargeable electricity. In either case their original business case, based on a high level of continuous output to cover the original capital cost, is ruined. Depending on the regulatory environment inflexible baseload may end up paying VRE to switch off to avoid their own cost of switching off. This effect has resulted in coal and nuclear plants in the US asking for subsidies and closing.
3. The solution for the VRE suppliers is to add some local storage so that they can delay delivering their electricity until prices are higher. For solar this is obviously overnight, and for wind it's a bit trickier, but coastal island effect wind which has two predictable peaks a day is pretty easy to manage.  The cost of battery storage is dropping fast with Lithium-ion nickel batteries 1-4 hours storage is cost competitive. For existing cheaper Lithium iron phosphate and future sodium iron phosphate batteries this will probably extend to 12 hours. The key problem is ramping up manufacturing of batteries fast enough to balance new VRE generation.
4. An alternative solution to the VRE suppliers’ problem is to get a better price for their electricity. The grid adds a markup to account for management and transmission which is charged to the end customer. Selling to the grid also introduces expensive project delays since new transmission equipment needs to be introduced and integrated with the overall grid which in general requires a great deal of modelling and negotiation of wayleave for the lines. Thus, there is an arbitrage opportunity if the VRE can be delivered directly to a consumer (e.g., factory, data center, office complex) getting a better price. The customer then tops up their demand with the more expensive grid electricity when VRE isn't adequate.
5. SPACE: Much VRE is, and will be, generated a long way from consumption e.g., 1000 miles or more. Transmission can thus be the most expensive part of the cost. HVDC lines are the solution for electricity transmission at sea where wayleave is easy to get, but world production of the necessary cables is only enough for about one such connection per year. Increasing it is not a huge problem, basically just a few more factories, however it's hard to get the costs down much. Thus, alternatives are needed.  One is artificial islands and hubs where remote wind turbines or solar are brought together into one main transmission system such as the proposed dogger island.

The common alternative is to convert the electricity to hydrogen and pump it to shore in pipes. A single pipe can carry as much energy as many electrical cables, and they are cheaper and easier to manufacture. In places like the North Sea the sea floor is littered with natural gas pipes that will be redundant and terminate in suitable places. This approach is less cost effective with remote offshore and floating deep-water Atlantic wind where other forms of energy transmission or use at production sites are expected. If ships use hydrogen, they will need more frequent stops for fuel and stopping at a deep-sea wind farm / hydrogen source near shipping lanes could make sense. There is about a 15% energy loss in the production of hydrogen, which compares with a 3% per 1000 km loss for electricity HVDC cables so the decision on which way to go is largely commercial and related to local sale price of the relevant outputs. Hydrogen is innately a way of solving both the time and space issues since it can be both stored and transported at added costs depending on the situation.

I have suggested floating installations to turn electricity into ammonia. This is a product with massive uses for fertilizer, as well as a plausible high-density drop-in bunker fuel replacement for ships, and a potential fuel cell system for ships and emergency generators. It is easy to liquify and thus store and transport.

6. Installation speed: It is hard to understand just how fast solar can be installed for industries used to thinking in multi years. Typically, it only takes a few months for a large installation. Wind on land can be installed quickly although turbine size is limited by logistics. Shallow water wind can be installed relatively quickly with motorized jack up barges. I think I heard of a rate of one turbine per day. Deep offshore floating wind may surprise us since the whole thing is made in a dock next to a factory and just towed out to sea. Thus, I expect great savings in size, bulk manufacturer, installation, and maintenance potentially making it cheaper than even onshore wind.

The Consumer View

1. Locally connected VRE can be a significant cost saving to a consumer. Many of the installations currently being built around the world at very low LCOE's (e.g., around $2 per megawatt hour for solar) have power purchase agreements (PPA) over 30 years which usefully fixes energy costs and acts as a hedge against situations such as the current massive natural gas price hike which has put several large industrial users (ammonia, fertilizer, steel) offline.
2. In suitable places e.g., Australia, California, solar on the roofs of offices and factories it is cheaper than grid electricity. Many consumers will also note (Germany) that combined solar/storage systems are cost effective. Additionally, those with EV's and suitable management systems will find it cost effective to lend some of their EV batteries to their grid supplier.  [ A specific case is a Nissan Leaf 2 which was configured by its user using the leaf app to offer about a third of the battery to the grid. Obviously if they planned a long trip, they reserved all the capacity for themselves. Over a year they were paid over £100 per month for this service. The effect on the battery life both driving and V2G was about 0.6% or 3 miles of range over 12 months]. 
3. Where variable electricity pricing exists the consumer, or the office, or factory have the opportunity to arbitrage. Either by installing some storage and buying low and selling or using high, or by direct connection to a VRE source. Larger consumers have additional issues. There are often penalties for using more than a certain current in a certain period. This means that additional storage can be used to ensure that the cap is not exceeded by smoothing out the demand. Additionally, hospitals for example will need emergency generation solutions for power cuts. These will be battery storage for fast response to short outages, or some replacement for current diesel generators e.g., either methanol, ethanol or ammonia, or hydrogen all produced when there are excess renewables (see later).

GRID view

1. Strategic speed. Grids have a problem responding to the incredible rate of growth of VRE. They are complex systems based on total control of the generation sources, to balance the variable demand, and adding variable supply as well is reasonably related with fear! This basically results in the grid connection being a bottleneck, in some countries all new grid connection requests have been put on hold for up to ten years while they sort things out.
2. Grids need a variety of solutions (called services).

Grid Services

Inertia: 

This is a digital analogue of the inertia of great big lumps of iron spinning in thermal generators, which gives the grid a few seconds to react to events. Small events like switching a kettle on or off are averaged using inertia so as not to be a problem, larger events such as a nuclear plant suddenly going offline, or an inter-grid transmission cable being broken by a trailer are handled by having "spinning reserve" a hydro or thermal plant with its generators up to speed and synced with the grid which can come online during the inertia period. Post fossil and nuclear this is provided by advanced inverters. These are needed to avoid an oscillation effect of wind turbines as they try to track the grid but provide a valuable grid service as well.

Fast response: 

Within a second any missing or excess electricity needs to be handled. This is the role of battery storage configured to deliver a high power (e.g., 2 GW) for a few minutes to an hour while alternative supplies are added or removed.  V2G, and home storage to grid are already being configured to provide this service to grids.

Short term Capacity: 

There is a significant variation over 24 hours in the grid demand. SW Australia is the first grid to report a zero-grid demand at some point in the day and California isn't far behind with its famous "Duck Curve". There are a variety of solutions. It's been noted that when the Aussie car fleet is 100% EV, they will be capable of holding 3 days grid demand. The grid itself may install a few gigawatt/gigawatt hours of battery storage to provide controlled power supply and provide time to activate other sources. Australia briefly had the largest Musk battery, which paid for itself in about a year, and Tesla sells grid batteries in megawatt units with prices up to a gigawatt. This area is probably driven mainly by the value of vehicle battery production, crossing over to adjacent heavier cheaper static batteries. An alternative and supportive approach is inter-grid connection. This allows one country with too much electricity to trade it to another that is short. The UK currently has several such connections, and Europe has a pretty good and improving inter-grid overlay.

Mid-term capacity: 

This is aimed at major loss of VRE due to low wind or solar input for 24 hours or so. There are numerous solutions proposed at about 85% round trip efficiency. Several are not new technology and just use existing volume components, with well understood properties, I personally like liquid air or CO2 storage or flow batteries. This area is basically engineering not research However there is a system solution by using a combination load configuration and borrowing vehicle batteries that may be cheaper. 

Seasonal storage: 

This is the primary unsolved problem. The requirement is for a solution that provides two weeks of total grid power production to handle such issues as "anticyclonic gloom" and Jetstream events as well as major disasters affecting the grid capacity such as a tsunami through a major offshore wind farm. In the UK this would apparently require 14 days of 40 GW. The problem with this is that you need massive power generation which implies a lot of kit and transmission equipment, AND a lot of stored energy in some form. It is going to be expensive, and the key questions are how the need can be reduced, what is the cheapest energy carrier that can be stored conveniently and what sort of power system converts the stored energy into grid energy. 

The answer is NOT nuclear or baseload capacity since this isn't used most of the time and carries a high capital cost.

One answer is a super-grid. A network of high-capacity lines north south to join the hydro and wind of the north to the solar of the south across 1000+ kilometers which is typically beyond the influence of local weather events. This is a high capital and logistical cost but where it exists, and a suitable judicial and regulatory system is in charge would go a long way to solving capacity issues over all time and space scales.

My interim solution is not very green - it involves storing large amounts of natural gas in salt caverns and mothballing combined cycle gas plants. The events will be handled for the first couple of days by other systems which provides the time to de-mothball. The gas plants have been written off, so the capital does not count, and they are already connected to the grid.  If they are also attached to carbon capture and storage this would improve matters. The primary problem here is that it requires an intelligent government which stores the gas during the summer when demand is low, so it is available when needed without having to go to the spot market. A longer-term alternative would be to store green hydrogen in the salt caverns and use the same old gas turbine.

Another alternative which a lengthy paper concluded was the cheapest, is the use of heavy-duty vehicle configured static hydrogen fuel cells and hydrogen stored in salt caverns. I struggled with this one for a while. I think the justification is that fuel cells for vehicles are designed to provide a high power for short periods, with the expectation that they will be replaced fairly frequently. Fuel cells for general power are designed to last a long time under steady middling load to avoid maintenance. The argument is that heavy vehicle fuel cells will be a high-volume product getting the advantages of scale, it may be possible to use them for long term storage with some refurbishment when they are pulled out of vehicles reducing the capital cost factor. In addition, they will only be called upon a couple of times a year so the maintenance will be low, and the capital cost will be spread over 20 years of use. Startup is fairly simple. If the systems are placed sensibly where there are natural caverns, and old thermal or nuclear sites to provide the interconnection and transmission, this could provide the lowest cost energy source.

My major issue with most long-term ideas is that they tend to have a low round trip efficiency- you may get only 30% of the electricity back again which makes it 3X as expensive to start with even if you use low-cost electricity this might be expensive.

In addition, the capital cost of the installation is only defrayed over about 4 weeks a year not 52, making that component also expensive.

A slightly mad concept of mine involves using liquid air or liquid CO2 storage, with the liquid stored in salt caverns. LAES or LACS have a reasonable 80-85% round trip efficiency depending to a large extent on the scale and the frequency of cycling/cooling so that the heat of compression/cooling can be reapplied to the re-expansion to increase efficiency. It can thus defray its relatively low capital costs in the 24-hour market. By storing vast amounts of say CO2 liquid in caverns when electricity is cheap the system is ready to deliver electricity for as long as you like based on storage size- a convenient source of low-level heat e.g., air, or a large water source helps here. The round trip efficiency would be lower due to the lack of convenient heat, but the storage losses would be low since salt is a lousy conductor of heat. You would probably get around 65% round trip efficiency which is better than any other system I have seen that might work for this case. That would make the electricity cost in this period only about 2x the cost when the system was filled (at lowest costs at the filling time) so its plausible that it would be quite acceptable. 

Intersystem linkage:

There is much scope for other electricity users to help. For example, the water pumping system uses lots of electricity, and the pumping times could be adjusted to be to the lowest cost electricity periods.

There are also heavy users such as electric steel mills, factories, chemical works that have some flexibility. For example, they can close for a week's holiday in periods of extreme shortage in return for suitable deals from the grid. Aluminum production is particularly attractive since the required capacity can be varied over short periods. Steel processes also have a fairly short cycle time and thus could be closed for an hour to help (for money!).

In many countries with good solar and seacoasts (California, Saudi Arabia) the desperate shortage of potable water will be resolved with desalination which is an energy intensive process. However, it uses both heat and electricity and thus would run only during daylight hours providing no grid related problems, it can also close down or speed to help balance the grid.

Once VRE capacity exceeds total grid demand including storage by a suitable amount new options appear.

If we assume that there is significant spare capacity for more than 50% of the time, and at a price that is reasonable for the generators (highly probable for solar in the equatorial deserts) then there is potential for energy heavy new business and processes. These would tend to be adaptable to VRE, and probably capable of contributing to grid balancing.

New sources of demand

These sources will be supplied by a mixture of off and on grid approaches, but I had to put them somewhere! Some will help and some will hinder, but all increase demand on the electrical energy system. There are no decent estimates of how much this all is - I'm guessing between 2- and 5-times current generation capacity with significant transition happening before 2030 in keen countries, and a long tail of disruption and DAC because of laggards up to 2050.There's some indication that electrification actually reduces costs because it's generally more efficient however I've seen no convincing system analysis. The IEA/WEA documents are rather pessimistic, I would like to think that they are following their long tradition of underestimating renewables learning rate and rollout, but they may understand politics and inertia better than me!

• Conversion of iron refining, steel mills and aluminum mills from coal graphite and gas to electricity and hydrogen
• Conversion of natural gas-based space and water heating to electricity or electrolytic hydrogen
• Replacing hydro plants where climate change reduces river flow
• EV's (increase of about 1/3 in normal demand)
• Electrolysis of water and desalination for drinking and hydrogen 
• Electrification of mining and mineral purification
• General manufacturing replacement of process heat in chemical manufacturing 
• Replacing petrochemical feedstocks with CO2+H2O based synthesis gas
• Ammonia and fertilizer manufacturing from air and water
• Synthetic jet fuel for long distance and heavy planes., and some emergency vehicles,
• Carbon capture from cement manufacturing and any recalcitrant CO2 producers
• Direct air capture of CO2 to pull the CO2 level down from 400 ppm to 300.
• ...

The good news is that a small area of the Sahara Desert (by the standards of the Sahara!) covered with solar panels can generate all the energy needed for the planet. And there are plenty of deserts and lots of wind, accessing this cost effectively with current technology is engineering and manufacturing not research, although improvements are coming fast. Energy, as so often in the past comes down mainly to transmission, storage, and political control.

Postscript

NUCLEAR:

Where can the residue of old nuclear fit in, given that new nuclear is more expensive than any alternative and old nuclear if it wishes to run continuously must pay VRE for switching off when there is too much generation. It could of course spend more capital to build a big battery, but when you add even the lowish post write off marginal cost of nuclear to the cost of the battery and round-trip costs it is probably worse than most other options.

The only cases I can see are if either the otherwise discarded spare heat ( 2/3 of the nuclear output) and electricity can be used for solid oxide electrolysis of water to hydrogen ( prototype stage 5+ years from volume) , and water desalination( many options , including old well tried ones)  on a continuous basis for use in a nearby industrial plant as feedstock, or just possibly for the high capital but efficient PEM acid based electrolysis route. Here being able to run it at a steady rate 24x7 brings the capital costs down, and the heat from the reactor system can also be used to reduce costs. The nuclear plant could then be used in the emergency 2-week case and make some premium money. Whether the investment is worth it given the short remaining life of most old nuclear plants is unclear.

Micronuclear

This technology (or to be more precise about 20 different approaches) is unproven and will take a long time to go through testing and gain acceptance, and the problem of disposal is not solved (I don’t like the proposal to just drop the whole thing into a hole and bury it. I thus don’t think it will have any significant impact in the next critical decade compared with the other relatively manufacturable, safe, and acceptable options.

Overall, there seems general agreement amongst modelers that 50%VRE isn't a problem although things need to be done, and that 80% is relatively possible given what is currently available or near term. Opinions differ around 95% some estimating astronomical cost for the last 5% and others offering lower costs by looking at the wider integration of the grid with the I wonder energy system.