The Full Cost of Electricity project seeks to understand the factors involved in the cost causation of electricity. Among other things, the project seeks to understand costs associated with renewable generation integration.
The variability of renewable generation poses several challenges to reliable operation of power systems. Operational reserves—additional available online generation capacity—is used to compensate for variability in both load and generation. It is natural to think that, as the installed power of renewable generation increases, more reserves will be required. To test this intuition we explored trends in data from the Electric Reliability Council of Texas (ERCOT). The historical procured regulating reserve data from ERCOT show that, although installed wind power has significantly increased over time, reserve requirements have decreased.
The trends are counter to intuition and require explanation. Our white paper for The Full Cost of Electricity study of the Energy Institute at The University of Texas at Austin, “Impact of renewable generation on operational reserves requirements: When more could be less,” [PDF] sheds light on the reasons behind the decrease in procured operational reserves in ERCOT despite increasing wind power capacity and generation.
The explanation for the fact that regulating reserves decreased while wind power increased is that several of ERCOT’s operational rules have changed over time, and these changes have affected the system requirements for reserves. We performed a statistical analysis of the ERCOT historical data to identify the significance of the change from a zonal (a handful of price points every 15 minutes) to a nodal (100s of price points every 5 minutes) market structure as well as several additional network protocol revisions.
The results suggest that the decreases in requirements for procured regulating reserves due to the change from the zonal to nodal market in 2010 have been more significant than the changes in requirements due to increases in installed wind power capacity of around 8,000 MW during the period from 2007 to 2013. Several additional changes in ERCOT protocols after 2010 have further reduced the need for regulating reserves. This observation motivates the exploration of better ways to operate the grid allowing more renewable integration without significant additional cost due to its variability. The overall picture is an 8,000 MW increase in the total wind capacity without an increase in the need for operational reserves.
This post was corrected on 3 April 2017 to fix an editing error.