Dumping Energy: Renewable Energy, Cost-Effective Curtailment and Remediating Negative Pricing Conditions

The “surplus” generation of renewable energy resources — wind, solar and in some cases, hydro — that exceeds the ability of the power system to deploy the energy available, is increasingly resulting in incidences of curtailment. These episodes of “turning off the spigot” can be the source of great consternation among project developers, utilities and renewable resource advocates.

Rejection of available renewable energy is counterintuitive. In the face of vigorous de-carbonization efforts, expanding renewable portfolio mandates, tax and other incentives to stimulate greater renewable energy production, why would “free, clean and green” fuel-sourced power be dismissed at certain times? This seeming contradiction is present where renewable and distributed energy resources proliferate in a few areas of North America today; tomorrow, it is likely to be widespread.

The problem remains that when more renewable energy is available than can be absorbed by the system, grid stability suffers and real-time market performance erodes. These system conflicts can be reduced through other measures, such as transmission capacity expansion, market enlargement, storage, and flexibility improvements in baseload generation resources. At present, though, these options are either jurisdictionally, technically or economically infeasible. That leaves curtailment as one of the few, remaining, plausible methods for shedding this orphan power.

This program will examine the power system issues associated with renewable energy over-production relative to load and system capacity. It will review what tools are available to minimize these impacts, devoting particular attention to curtailment. The symposium will also consider ways that curtailment is being addressed today, how market and bilateral transactions are adapting compensation to accommodate curtailment, case studies of active network management of curtailment in the U.S. and Europe, and how renewable energy goals are achievable if curtailment is deployed.

Learning Outcomes

Discuss challenges associated with “surplus” renewable energy on the grid
Review economic and financial impacts of variable renewable energy on wholesale power markets
Evaluate options to address “surplus” renewable energy output
Examine optimization of economic outcomes through curtailment
Assess examples of active network management of renewable energy generation
Analyze whether overbuilding capacity and curtailing excess production can still result in renewable energy goals attainment
Discuss adapting market compensation to accommodate curtailment
Identify negative pricing patterns in wholesale energy markets
Discuss case studies of market participants favored and dis-favored by negative pricing
Assess project developer perspectives of negative pricing and possible remedies

Credits

EUCI is accredited by the International Accreditors for Continuing Education and Training (IACET) and offers IACET CEUs for its learning events that comply with the ANSI/IACET Continuing Education and Training Standard. IACET is recognized internationally as a standard development organization and accrediting body that promotes quality of continuing education and training.

EUCI is authorized by IACET to offer 1.5 CEUs for this conference and 0.4 CEUs for the workshop.

Requirements For Successful Completion Of Program

Participants must sign in/out each day and be in attendance for the entirety of the conference to be eligible for continuing education credit.

Instructional Methods

PowerPoint presentations and case studies will be used in program.

Agenda

Wednesday, July 11, 2018

8:30 – 9:00 a.m. :: Registration and Continental Breakfast

9:00 – 9:15 a.m. :: Program Overview

9:15 – 10:30 a.m. :: Challenges Associated with Too Much of a Good Thing — “Surplus” Power

Impacts on power system
- Grid stability issues
- Reduced Power quality
- Negative pricing
- Disruptive effect on existing thermal fleet
- Disincentive for additional renewable energy development

Erik Ela, Principal Technical Leader, Electric Power Research Institute (EPRI)

10:30 – 10:45 a.m. :: Morning Break

10:45 a.m. – 12:00 p.m. :: Impacts of Variable Renewable Energy on Wholesale Power Markets

Observed historical impacts of wind and solar on annual average wholesale prices
Impacts of other trends on wholesale prices, including natural gas prices and customer load
Past and recent impacts of wind and solar on temporal and geographic pricing patterns
Growth in negative wholesale prices, and trends in wind and solar curtailment
Modeled effects of increased wind and solar penetration on average wholesale prices
Consequences of increased wind and solar penetration on temporal patterns of prices
Implications for profitability of wind and solar as well as conventional thermal assets

Dr. Ryan Wiser, Senior Scientist and Group Leader – Electricity Markets and Policy Group, Lawrence Berkeley National Laboratory (LBNL)

12:00 – 1:00 p.m. :: Group Luncheon

1:00 – 2:00 p.m. :: Evaluating Options to Address “Surplus” Renewable Energy Output

Transmission capacity expansion
Market enlargement
Storage
Demand response
Time of use rates
Flexibility improvements in baseload generation resources
Curtailment

Paul Denholm, Principal Energy Analyst, National Renewable Energy Laboratory (NREL)

2:00 – 3:00 p.m. :: Focus: Optimizing Economic Outcomes through Curtailment

Identifying the lowest-cost generation solution
Why curtailment is the [least worst/best] path to take under present conditions
Will there be a “tipping point” for (an)other path(s) to supersede curtailment?
- Relevant strike economics of alternative remedies

Morgan Putnam, Director, Clean Power Research

John Sterling, Director – Market & Policy Affairs, First Solar

3:00 – 3:15 p.m. :: Afternoon Break

3:15 – 4:15 p.m. :: Opportunities and Challenges with Utilizing Curtailment on the Distribution Grid

Overview of the technical issues that one can solve with curtailment
- Discussion of hosting capacity and technical screens
There are regulatory and market issues with utilizing curtailment to its full potential
- Implications of the utility’s “requirement to serve” and possible modifications to address curtailment of distributed generation
- Administrative vs. market-based settlement mechanisms

Jeff Roark, Technical Executive – Power Delivery & Utilization, Electric Power Research Institute (EPRI)

4:15 – 5:30 p.m. :: Active Network Management of Renewable Energy Generation

Rapid development of wind energy in Scotland over the past decade led to exhaustion of the available static capacity of the distribution systems to which these projects were connecting. Once capacity in good wind resources was used up, the traditional route would have led to reinforcement of the system. However, through the development of innovation in the form of real-time monitoring and controls – including curtailment and reactive power management – and associated connection agreements to manage this new approach to integrating renewables to the system, the UK was able to greatly increase the amount of generation connected to the same system. The presentation will provide extensive background on the methods used in the UK and will tie this to current initiatives underway in Minnesota state to address their own challenges to meet the state’s renewable energy targets.

Chad Abbey, Global Head – Consultancy, Smarter Grid Solutions (SGS)

5:30 p.m. :: Program Adjourns for Day

Thursday, July 12, 2018

7:30 – 8:00 a.m. :: Continental Breakfast

8:00 – 9:15 a.m. :: Panel on Curtailment and Interconnection

The link between curtailment and accommodating increased renewable energy generation on the power grid is both non-intuitive and highly polarized. Beyond overcoming the stigma often associated with curtailment, it also entails a number of complex technical and commercial consequences, not to mention an entirely different approach to operation of the distribution system. Drawing on expertise across the concerned stakeholders and different jurisdictions tackling with these issues, the expert panel will address many of the hurdles and competing technologies that challenge the adoption of curtailment and related smart grid controls for integration of renewable energy.

Moderator

Chad Abbey, Global Head of Consultancy, Smarter Grid Solutions (SGS)

Panelists

Brian Conroy, Director – Network Projects & Initiatives, Avangrid

Lise Trudeau, Energy Analyst, MN Dept of Commerce

9:15 – 10:30 a.m. :: Achieve Renewable Energy Goals by Overbuilding Capacity and Curtailing Excess Production

The key challenge to >70% renewables — addressing sustained periods of low production
How curtailment addresses periods of low renewables production
Why load shifting can’t provide the same benefits
Trading off curtailment against production from stranded coal and gas assets

Morgan Putnam, Director, Clean Power Research

10:30 – 10:45 a.m. :: Morning Break

10:45 a.m. – 12:00 p.m. :: Adapting Compensation to Accommodate Curtailment

Ways that curtailment is being addressed today
- US market overview
- Germany
New ways to compensate asset owners that provide them with long-term stability
What does it cost to consume electricity that would have otherwise been curtailed?
Pricing in capacity markets
- Negative power pricing and other market effects
- Impact on different market players

Congcong Wang, Market Design Engineer, Midcontinent ISO (MISO)

Guillermo Bautista Alderete, Director of Market Analysis & Forecasting – Market Quality & Renewable Integration, California ISO (CAISO)

12:00 – 1:15 p.m. :: Group Luncheon

1:15 – 2:15 p.m. :: The Other Side of the Curtailment “Coin”: Negative Pricing Patterns in Wholesale Energy Markets

Negative price conditions are more pervasive and persistent as rapidly falling energy prices for wind and solar resources compete against higher cost energy resources in the wholesale markets. Merchant generators, utilities, system operators, and project developers each have their distinct challenges with this phenomenon and how best to adapt to the unprecedented new market dynamics this creates. This segment will review the negative pricing conditions in wholesale power markets where high renewable energy penetration currently exists or where such consequences are likely to emerge in the future:

CAISO
ERCOT
MISO

Joseph Cavicchi, Executive Vice President, Compass Lexecon

2:15 – 3:30 p.m. :: Market Participant Outcomes Favored and Dis-favored by Negative Pricing and General Price Suppression

Favored

Solar in Calif EIM
Hydro in CAISO

Dis-favored

Solar in CAISO
Wind in MISO
Gas in ERCOT

Developing arbitrage opportunities

Enhanced scarcity pricing

Ping Wang, Senior Manager – RTO Analysis, The Energy Authority

2:45 – 3:00 p.m. :: Afternoon Break

3:00 – 4:30 p.m. :: Market Participant and Developer Perspectives of Negative Pricing and Possible Remedies

Valuing the impact on new renewable energy production
Valuing the impact on acquired renewable energy production
Valuing the impact on thermal/baseload energy production
Valuing the impact of storage

John Sterling, Director – Market & Policy Affairs, First Solar

Brian Conroy, Director – Network Projects & Initiatives, Avangrid

4:30 p.m. :: Program Adjournment

Speakers

Chad Abbey, Global Head of Consultancy, Smarter Grid Solutions (SGS), Smarter Grid Solutions

Guillermo Bautista Alderete, Director of Market Analysis & Forecasting – Market Quality & Renewable Integration, California ISO (CAISO)

Joseph Cavicchi, Executive Vice President, Compass Lexecon

Brian Conroy, Director – Network Projects & Initiatives, Avangrid

Paul Denholm, Principal Energy Analyst, National Renewable Energy Laboratory (NREL)

Erik Ela, Principal Technical Leader, Electric Power Research Institute (EPRI)

Morgan Putnam, Director, Clean Power Research

Jeff Roark, Technical Executive – Power Delivery & Utilization, Electric Power Research Institute (EPRI)

John Sterling, Director – Market & Policy Affairs, First Solar

Lise Trudeau, Energy Analyst, MN Dept of Commerce

Congcong Wang, Market Design Engineer, Midcontinent ISO (MISO)

Ping Wang, Senior Manager – RTO Analysis, The Energy Authority

Dr. Ryan Wiser, Senior Scientist and Group Leader – Electricity Markets and Policy Group, Lawrence Berkeley National Laboratory (LBNL)

Location

Marriott Minneapolis City Center
30 South 7th Street
Minneapolis, MN 55402

To reserve your room, please call 1-612-349-4000
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Room Rate:

The room rate is $204.00 single or double plus applicable taxes.

Room Block Dates:

A room block has been reserved for the nights of July 10 – 12, 2018.

Rate Available Until:

Make your reservations prior to June 26, 2018. There are a limited number of rooms available at the conference rate. Please make your reservations early.

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