A version of this article was originally published on December 5th, 2016 on UtilityDive.
By Aaron Bloom – National Renewable Energy Laboratory
Lower costs, enhanced capabilities, and an abundance of resources have set the United States and much of the world on track to increase renewable energy deployment and decrease carbon emissions from the energy sector.
Still, the question of whether the U.S. can reliably and affordably integrate large amounts of wind and solar confronts policymakers – so we’re giving you four reasons 30% wind and solar is technically no big deal.
Wind and solar are the fastest growing energy sources in the country, and for good reason. As experience with renewables increases and costs continue to decline, mainstream adoption of wind and solar is becoming an economic and technical reality.
The U.S. Energy Information Administration (EIA) estimates wind and solar met just 5% of U.S. electricity demand in 2015. In its Annual Energy Outlook 2016, EIA projects that to meet the Clean Power Plan, the national share of wind and solar will likely reach 15% by 2030. To meet the U.S.’s Paris Climate commitment while minimizing costs, Energy Innovation’s Policy Simulator recommends policies getting us to 33% wind and solar by 2030.
Credit: Energy Innovation
But to reach these goals, policymakers need confidence system operators know how to deal with higher shares of variable renewable generation. The evidence shows they can, and here’s why.
Reason 1. Solar and wind resources abound in the United States
According to the National Renewable Energy Laboratory (NREL), U.S. wind and solar energy resource potential is well in excess of what’s needed to meet our current electricity demand, which currently stands at roughly 4,000 TWh of total generation, and 1,100 GW of capacity:
Due to this massive potential, the potential scale of land-use impacts associated with meeting a large fraction of national energy requirements from the sun are relatively small. For example, a 2007 NREL study showed only 0.6% of U.S. land would be necessary to meet 100% of national electricity demand with solar power.
Similarly, the U.S. Department of Energy’s (DOE) Wind Vision projected 1.5% of U.S. land would be needed for wind turbines to provide 35% of electricity demand. Though siting renewable generation and transmission can be difficult, these figures suggest policymakers can be “smart from the start” to access the nation’s best resources.
In other words, the boon of renewable resources in the U.S. opens massive opportunities to optimize the deployment of wind and solar to maximize affordability and reliability. As long as the power systems are coordinated and follow Good Utility Practice, the general consensus is the U.S. has the resources and technology to make it work.
Reason 2. Wind and solar power keep getting cheaper
Cost projections for wind and solar generation are on a rapidly decreasing trajectory. Research published in Nature Energy suggests wind energy costs could fall by 30% by 2030 and even more by mid-century. In the central United States, utilities are purchasing wind power for as low as two cents per kilowatt-hour after the production tax credit. Even when you remove the production tax credit from the calculations, the cost of new wind resources is competitive with the annual fuel costs for existing natural gas combined cycle generation.
Like wind, solar power has experienced significant price drops – more than 80% since 2009 according to cost figures from Lawrence Berkeley National Lab (LBNL) and Lazard. Utilities in the U.S. have signed contracts for solar power under four cents per kilowatt-hour with new records set each year. Price declines continued in 2015 to the tune of 5-9% for distributed solar systems and 5% for utility-scale PV systems in just one year.
As a result, wind and solar are increasingly saving customers money. Falling wind and solar capital costs combined with operating costs much lower than conventional plants burning fossil fuel mean wind and solar are on the brink of beating existing fuel-fired plants. In Colorado, some analysis indicates new wind could beat 6,000 gigawatt-hours of coal generation from existing plants on price alone.
By NREL’s projection, 44% renewable energy could be economically optimal in 2050 assuming conservative cost reductions for wind and solar. Under more favorable, but still realistic assumptions for capital cost reductions, 58% renewable energy would be the cheapest resource mix. In short, it will likely be economical to achieve 40-60% renewable energy by 2050.
Reason 3. In theory, we can reliably operate a 30% wind and solar system
In the figure above, the largest power system in North America could look like ondays when wind and solar are serving over 50% of the daily load. A full video of forecasted daily generation flows can be found here (Credit: NREL)
To take advantage of these potential cost savings, we have to understand how to operate an electricity system reliably – capable of withstanding changing conditions caused by the moment-to-moment fluctuations in the energy balance, extreme weather, and sudden disruptions to the system. Power systems with lots of wind and solar can do this well.
DOE National Laboratories have analyzed the impacts of wind and solar generation on power system planning and operations in the Eastern and Western grids, and generally reach the same conclusions: The U.S. has the resource and technological capacity today to enable wind and solar to provide between 20% and 30% of the country’s annual electricity demand, including much higher penetrations during high wind and solar days.
Certain changes to the way the system is operated would enhance reliability. With new inverter and information technologies, wind and solar can supply essential reliability services traditionally supplied by conventional generation – enough to manage contingency events in the Western Interconnection when instantaneous penetrations of wind and solar reach 60%.
Better planning that adds flexibility to the system further improves reliability by reducing the wasted or “curtailed” wind and solar power. In its California Low Carbon Grid Study, NREL modeling found additional storage, demand response, wider balancing areas, a diverse resource mix, and improved transmission planning were each shown to reduce the costs of reaching 50 percent reduction of carbon emissions in California. The same modeling found no reliability disruption when wind and solar met 40-45% of California’s annual demand in 2030.
The research appears conclusive: Wind and solar could replace carbon-intensive baseload as the dominant sources of electricity generation in the U.S. without affecting reliability. But it’s not only researchers saying this, the world’s largest system operators agree that, technically, the system can maintain reliability while keeping costs affordable.
Reason 4. In practice, many places already are
Research is no substitute for real life experience. Fortunately, we have both. Looking at real life experience both domestically and abroad, we see large parts of the energy economy are shifting to cleaner and increasingly affordable wind and solar generation.
Of course, most people have heard about how Germany and Denmark, parts of a much larger interconnected system, have managed periods where wind, solar, hydro, and biomass met nearly 100% of the electricity system needs. And in Colorado, California, Texas, and the Southwest Power Pool, systems similar in size to those in Europe are reaching instantaneous penetrations of approximately 50%.
But wind and solar are viable as more than just parts of much larger systems. Small systems with weak connections to larger grids are redefining what’s possible with wind and solar power. In Ireland, an island system, wind generated 39% of its monthly energy needs in December 2015, and 24% of the annual energy needs in 2015.
Practical experience suggests the more diverse, well-resourced, interconnected U.S. grids have a long way to go before they start to experience technical limitations.
Reaching and operating a system with 30% wind and solar isn’t the problem. We can do that. But we’re going to need to set our sights much higher if we want to halt the progression of climate change. For that, we need to deeply decarbonize the energy sector, which will require continued research and development support. I’m very excited to start on the path to deep decarbonization of the electricity sector in a project recently announced by President Obama, Prime Minster Trudeau, and President Peña Nieto, the North American Renewable Integration Study.
The author appreciates the review of Paul Denholm, Greg Brinkman, Trieu Mai, Scott Gossett, and the team at America’s Power Plan.