The POWER Podcast provides listeners with insight into the latest news and technology that is poised to affect the power industry. POWER’s Executive Editor Aaron Larson conducts interviews with leading industry experts and gets updates from insiders at power-related conferences and events held around the world.
93. Leveling the Market Playing Field for Hybrid Power Plants
Leveling the Market Playing Field for Hybrid Power Plants
The Federal Energy Regulatory Commission (FERC) is an independent agency that, among other things, regulates the interstate transmission of electricity. Its ultimate mission is to “Assist consumers in obtaining economically efficient, safe, reliable, and secure energy services at a reasonable cost through appropriate regulatory and market means, and collaborative efforts.”
In the past, FERC has issued important orders, including 841 and 2222, which have helped clear the way for more energy storage to be added to the U.S. power grid. However, Chip Cannon, a partner with Akin Gump Strauss Hauer & Feld LLP, who heads the firm’s energy regulation, markets, and enforcements practice, believes the playing field requires further leveling for hybrid plants, that is, facilities pairing solar or wind farms with battery storage.
Cannon said few hybrid plants existed on the grid a few years ago, but that is changing quickly. In fact, he said there are 102 GW of solar plus storage and 11 GW of wind plus storage capacity in the interconnection queue at the present time. “We have battery storage resources, typically paired with renewables, that are entering the interconnection queue at a very, very fast clip,” Cannon said as a guest on The POWER Podcast.
That has created some challenges for the market. “The queue process has not really been set up for accommodating these hybrid resources, and we really don’t have very much experience for them in the market,” said Cannon.
Hybrid plants offer a number of physical and operational traits that benefit the power grid. Solar and wind resources are obviously intermittent, meaning they only produce power when the sun shines and the wind blows. When paired with energy storage, which can be used to either add or remove energy to and from the grid, intermittency problems can be alleviated. The pairing also improves reliability, flexibility, and resiliency, and can help lower costs for consumers.
Cannon explained that all of the regional transmission organizations (RTOs) and independent system operators (ISOs), such as PJM, CAISO, and NYISO, establish the “rules of the road” for generators to participate in their energy capacity and ancillary services markets. “But those market rules were not designed to reflect resources that can both take in energy as well as put energy on the grid. So, the concern here right now is that the market designs were simply not set up to accommodate energy storage resources,” Cannon said.
While FERC doesn’t have the authority to establish rules that promote energy storage, it can look at the existing market rules to see if they are unduly hindering the ability of certain classes of resources to participate and compete in those markets. Cannon said FERC has held a technical conference regarding hybrid resources, which allowed various stakeholders to provide input. It also directed RTOs and ISOs earlier this year to submit information on how their markets are setup to accommodate hybrid resources. Cannon suggested it will be interesting to see how FERC ultimately addresses the issue.
“We’re definitely at an inflection point in the power sector. I think the power sector has been going through an evolution for a couple of decades since FERC started going down the path of competition, and now we’ve got this radically new resource mix,” Cannon said. “I’m of the view, though, that the evolution is really turning into a revolution of the power sector with the speed of technological changes and falling prices. So, there’s a lot of really good stuff out there.”
92. Solar Power Helps Stabilize Electricity Prices in Brazil
Brazil is blessed with a wealth of natural resources. It gets almost two-thirds of its electricity from hydropower facilities, and it also has enormous potential for wind, solar, and natural gas-fired power. Yet, the country is saddled with higher than average electricity prices compared to most developed nations. A study conducted by McKinsey & Company analysts found that Brazil’s electric power rates for captive industrial consumers were 65% higher than rates in the U.S. in 2019, and 35% greater than Canada’s, which has a similar reliance on hydropower.
“The price of energy in Brazil only goes one way, and that’s up,” Lisarb Energy Chairman Jamie MacDonald-Murray said as a guest on The POWER Podcast. “It's driven by inflation, but largely, it’s also driven by the fact that the grid operators are having to reinvest in the infrastructure. They’re having to renew the grids. They’re having to add capacity and modernize the grid, and that cost they’re passing on to the consumer.”
Lisarb Energy is focused on developing large-scale solar projects in Brazil. These include distributed energy solar parks for the corporate power purchase agreement (PPA) market, as well as high-yielding utility-scale solar parks for the free market and government auctions. The company was established in 2017, and has already become one of Brazil’s fastest growing solar developers. “We’ve been very successful,” MacDonald-Murray said.
The ability to lock in power prices through a PPA is one of the key incentives for Lisarb Energy’s corporate clients, according to MacDonald-Murray. “We now have over 200 MW of PPAs signed with some of Brazil's largest companies, and we have another 700 MW in various stages of negotiation that I think will close out 2021 with just over 1 GW of corporate PPAs signed,” he said.
The fact that legislation will be enacted next year requiring solar generators in Brazil to contribute money toward distribution costs has incentivized PPA agreements in the near term. “The price that we can offer won’t be as attractive [in 2022] because obviously, if we’re going to have to start contributing to distribution costs, then, obviously, we’re not going to be able to offer such a competitive price to our off-takers,” said MacDonald-Murray.
Still, Lisarb Energy believes solar power’s growth potential in Brazil is enormous. The company cited a forecast by the Brazilian Solar Photovoltaic Energy Association, ABSOLAR, which says “solar will take the largest share (38%) of the Brazilian electricity matrix, producing 125 GW by 2050.” Brazil’s government recently exempted various types of solar equipment from a 12% import duty, which Lisarb Energy said shows that officials recognize “the strategic importance of the solar market.”
Lisarb Energy has already secured land for 3 GW of solar PV development in Brazil. The majority of the company’s existing projects are smaller in size (about 2.5 MW), but it is currently working with a mining company on a 250 MW system. “That one’s slightly different,” said MacDonald-Murray. “We’re working with a partner to provide a battery system to obviously increase the usability of the energy that’s generated.”
91. A Game-Changing Vision for Geothermal Energy
According to a report released in 2019 by the U.S. Department of Energy, geothermal electricity generation could increase more than 26-fold by 2050—reaching 60 GW of installed capacity. That may seem like a pipe dream to some power observers, but if new well-drilling techniques allow enhanced geothermal systems to become economical, the reality could be much greater. In fact, Quaise Energy, a company working to develop enabling technologies needed to expand geothermal on a global scale, claims as much as 30 TW of geothermal energy could be added around the world by 2050.
Most of the geothermal systems that supply power to the grid today utilize hydrothermal resources. These tap into naturally occurring conditions in the Earth that include heat, groundwater, and rock characteristics (such as open fractures that allow fluid flow) for the recovery of heat energy, usually through produced hot water or steam.
Enhanced geothermal systems contain heat similar to conventional hydrothermal resources but lack the necessary groundwater and/or rock characteristics to enable energy extraction without innovative subsurface engineering and transformation. The technology that Quaise Energy is working on would allow drilling down as far as 20 kilometers (12.4 miles) to utilize heat from dry rock formations, which are much hotter and available in almost all parts of the world.
“The key thing is we’re going for hotter rock, because we want the water to get hotter,” Carlos Araque, CEO of Quaise Energy, said as a guest on The POWER Podcast. “We want it even to be supercritical, which is the fourth phase of water—when it goes above a certain temperature and pressure—that’s what we’re looking for.”
But drilling to those depths is difficult. “It really boils down to temperature,” Araque said. “The state-of-the-art of drilling technologies is in the 200C neighborhood, and the reason for that is electronics that go with the drilling systems. Making higher-temperature electronics is a very, very difficult task.”
Another problem is the hotter the rock gets, the faster drill bits wear out. “So, if you imagine drilling at five kilometers below the surface of the earth, your drill bit will only last a few hours, because the rock is so hot and so hard,” said Araque. He explained that pulling the drill string out of a five-kilometer-deep hole so that the drill bit can be changed, and then pushing it back into the hole can take a significant amount of time. “So, a week to pull out of the hole, a few hours to change the drill bit, a week to push down into the hole to drill a few more hours. It becomes exponentially impossible to do that,” he said.
“That’s where the drilling technology that we’re proposing comes into play. We’re basically trying to do directed-energy drilling with millimeter waves,” Araque said. “Imagine a microwave source on the surface, it’s called a gyrotron. We beam this energy through a pipe into the hole. Together with this energy, we push a gas—could be nitrogen, could be air, could be argon, if necessary—and at the bottom of that pipe, this energy comes out, evaporates the rock, and the gas picks up the vapor of that rock and pulls it back out. What comes out of the hole looks like volcanic ash, and the hole actually burns its way down, you know, five, six, 10, 15, 20 kilometers, as needed, to get to the temperatures we’re looking at.”
90. Open-Source Technology Benefits Transmission and Distribution Operators
Open-Source Technology Benefits Transmission and Distribution Operators
The term “open source" is well-recognized in the technology world, but may not be as widely understood in other sectors. What open source means is that the software code is publicly available so that anyone can contribute to the code base and create add-on extensions. This enables the growth of a market of providers that can offer hosting and add-on functionalities that can be utilized by all users.
In the energy sector, LF Energy has taken a leading role in facilitating the development of open-source technology. LF Energy is part of The Linux Foundation, which is the umbrella organization for more than 425 open-source projects. Among LF Energy’s projects are platforms that help automate demand response; assist electricity, water, and other utility operators in managing systems; monitor and control microgrids and other distribution assets; and perform dynamic power flow simulations, among other things.
Arjan Stam, director of System Operations with Alliander (a distribution system operator [DSO] in the Netherlands), and Lucian Balea, research and development program director and open-source manager with RTE (a transmission system operator [TSO] in France), were guests on The POWER Podcast and explained how open-source technology is being used by their companies.
“We are talking about applications that would help assist the grid operators in operational control rooms to manage the power system in real time. We are talking about applications that help us to simulate the behavior of the power system to make sure that we can operate under safe conditions. We are talking about application that would increase the automation of the power grid so that the grid can react automatically in an optimized manner,” Balea, who is also the board chair for LF Energy, said.
Stam, who is also an LF Energy governing board member, said DSOs are less experienced than TSOs when it comes to managing energy flows on the grid. He suggested it’s hard to start from scratch in developing greater power management capabilities. “It's really helpful if you can find an example that you can use to build this new capability,” said Stam. With open source, that’s what Alliander found.
“We needed also new applications, and also the knowledge you need, and standardization you need, and interoperability you need,” said Stam. “The best way to build that and to create it is with other parties that have the same challenges. And that’s what we found in working with open source. So, it delivered us quite a lot.”
Stam suggested open-source technology can also help speed the transition to renewable energy. In order to increase the level of renewable energy in the system, he said, “we need quite specialized applications that are not yet really available in the market.” However, by teaming up with other companies that have the same needs, development of the technology can happen more quickly. “And that’s actually what’s happening in open source,” Stam said.
“Open source has to be seen as an accelerator. That’s the lesson that we learned from the experience of other industries,” Balea said, specifically mentioning cloud services as an example. He said by relying on open-source collaboration, cloud services technology was built and scaled very quickly.
“In LF Energy, we apply this open-source acceleration lever to a great cause, that is, the energy transition,” Balea said. “If we look at the projects that we have, they are all guided by the need to adapt to a future energy system that will have to cope with a high share of distributed renewable energy resources.”
89. The Benefits of Flow Batteries Over Lithium Ion
The Benefits of Flow Batteries Over Lithium Ion
Lithium-ion (Li-ion) is the most commonly talked about battery storage technology on the market these days, and for good reason. Li-ion batteries have a high energy density, and they are the preferred option when mobility is a concern, such as for cell phones, laptop computers, and electric vehicles. But there are different energy storage technologies that make more sense in other use cases. For example, iron flow batteries may be a better option for utility-scale power grid storage.
An iron flow battery is built with three pretty simple ingredients: iron, salt, and water. “A flow battery has a tank with an electrolyte—think of it as salt water to be simple—and it puts it through a process that allows it to store energy in the iron, and then discharge that energy over an extended period of time,” Eric Dresselhuys, CEO of ESS Inc., a manufacturer of iron flow batteries for commercial and utility-scale energy storage applications, explained as a guest on The POWER Podcast.
Iron flow batteries have an advantage over utility-scale Li-ion storage systems in the following areas:
• Longer duration. Up to 12 hours versus a typical duration of no more than 4 hours for large-scale Li-ion systems.
• Increased safety. Iron flow batteries are non-flammable, non-toxic, and have no explosion risk. The same is not true for Li-ion.
• Longer asset life. Iron flow batteries offer unlimited cycle life and no capacity degradation over a 25-year operating life. Li-ion batteries typically provide about 7,000 cycles and a 7- to 10-year lifespan.
• Less concern with ambient temperatures. Iron flow batteries can operate in ambient conditions from –10C to 60C (14F to 140F) without the need for heating or air conditioning. Ventilation systems are almost always required for utility-scale Li-ion systems.
• Lower levelized cost of storage. Because iron flow batteries offer a 25-year life, have a capital expense cost similar to Li-ion, and operating expenses that are much lower than Li-on, the cost of ownership can be up to 40% less.
“People have been really interested in flow batteries for a lot of reasons, but the most common one that you’ll hear about is the long duration,” said Dresselhuys.
So, why haven’t iron flow batteries overtaken Li-ion batteries in the power grid storage market? “I think lithium has had an advantage for a couple of reasons historically,” Dresselhuys said. “The first is that it’s been more broadly available.”
Dresselhuys explained that even though Li-ion batteries weren’t specifically developed for grid applications, the fact that they are well-suited for cars and other uses, where the energy density that lithium provides has real advantages, allowed manufacturing efficiencies to develop. That, in turn, has brought costs for Li-ion down and accelerated growth. Therefore, it’s taken some time for other technologies to catch up.
Still, there are companies implementing iron flow battery projects. ESS announced in April that it had contracted with a Chilean utility to provide a flow battery system for use in the environmentally pristine Patagonia area. ESS’s 300-kW/2-MWh Energy Warehouse system will be integrated with renewable resources in a local microgrid with the aim of eliminating about 75% of the diesel-fueled generation previously used to power the area.
“The project there was actually originally designed and spec'd out to be a lithium project, because, of course, that’s what people thought was available,” said Dresselhuys. ESS’s team of experts talked to the owners about the advantages of the iron flow battery system and came away with the order.
88. Looking for Carbon-Free Energy Resources? Don’t Forget Nuclear Power
Looking for Carbon-Free Energy Resources? Don’t Forget Nuclear Power
As leaders around the world take steps to decarbonize energy supplies, many people have focused their attention specifically on wind and solar power. What they may fail to recognize is that nuclear power provides more electricity in the U.S. than all other carbon-free sources combined. This is true in some other countries, such as France, Sweden, and Ukraine, as well.
“I think it’s a really exciting time to be in [the nuclear power] industry, not only because of all the technology that is starting to really be leveraged and come all together into a system to deploy a new reactor concept, for example, but the fact that our product has always been a clean energy source,” Dr. Rita Baranwal, former head of the U.S. Department of Energy’s (DOE’s) Office of Nuclear Energy, who now serves as vice president of Nuclear Energy and Chief Nuclear Officer with the Electric Power Research Institute (EPRI), said as a guest on The POWER Podcast.
“It can be a solution to decarbonization, not only for states and countries, but the world as a whole. And so, to me, it’s a very exciting time and a great time to be in the business,” she said.
EPRI is an independent nonprofit organization that conducts research, development, and demonstration projects in collaboration with the electricity sector and its stakeholders. It focuses mainly on electricity generation, delivery, and use, with a goal of benefiting the public, and the organization’s U.S. and international members. EPRI has many programs designed to support the nuclear industry including in the areas of materials management, fuels and chemistry, plant performance, and strategic initiatives.
“Some of the things that we’re working on are deployment of small modular reactors—SMRs—and other advanced technology. We at EPRI have partnerships in this area with Kairos, NuScale, and LucidCatalyst. That’s one area. The other is around workforce opportunities and development. EPRI does a lot of work in developing training and delivering that kind of training,” Baranwal said.
While most of the world’s existing reactors are large units with capacities as high as 1,000 MW and greater, advanced designs, such as the SMRs Baranwal mentioned, may open up opportunities to use nuclear power in new applications. For example, microreactors with capacities under 10 MW may be suitable for use in very remote areas or on islands. They could also be important for Department of Defense installations.
“Let’s talk about Alaska,” said Baranwal. “Right now, they rely on extensive diesel to be driven in to help generate electricity for them. If you can envision a microreactor instead, you are reducing the reliance on that fossil fuel and also creating small communities that can have a microgrid and a microreactor, and be very self-sustained.” She suggested a similar arrangement could be used in places like Puerto Rico.
Baranwal said what keeps her enamored with the nuclear industry is its clean-energy attributes. “I want to leave our environment as good or better than what we are experiencing today, and I know that nuclear—it being a clean energy source—will absolutely have a vital role to play in the decarbonization efforts that we’re all experiencing and trying to accomplish,” she said.
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