Download The Impact of a SuperGrid on the Existing Grid

The Impact of a SuperGrid
on the Existing Grid
Fernando L. Alvarado
The University of Wisconsin
Workshop on a National SuperGrid
November 8, 2002
Palo Alto, California
Fernando L. Alvarado
Palo Alto, November 7, 2002
1
PSERC
Jeff Dagle, PNNL
Historical Basis for Transmission
Renewable resources remote from load
Hydroelectricity
Thermal generation economies of scale
Reduced transportation (“coal by wire”)
Reliability (pooling of resources)
Interregional exchanges (seasonal, daily)
The key questions
What is a SuperGrid?
How much transmission do we need?
Why a “Super” Grid?
Can’t “conventional” grid expansion be made to work?
Won’t distributed generation do the job?
Won’t proper price signals to generators do the job?
How much will the SuperGrid cost?
Who will pay for it and how?
What will be the impact on markets?
What technical problems will it solve/create?
Will it solve the wrong problem?
Will it create new problems?
What is a SuperGrid?
A high capacity transmission network
“overlay” over the existing grid
Interface to HV only / at the substation / to the home
using new technology
Superconducting HVDC, MVDC (50 kV range), or
LVDC cables, or AC cables
(DC lines and cables with new converters)
(Compact overhead line designs)
(Low capacitance AC cables)
and grid-arranged for reliability reasons
Flow control issues with DC grids!
Fernando L. Alvarado
Palo Alto, November 7, 2002
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PSERC
The “ideal” SuperGrid
would never congest.
would be invisible.
would be lossless.
would cost nothing.
would solve all problems and would
create no new problems.
Fernando L. Alvarado
Palo Alto, November 7, 2002
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PSERC
In other words it would be…
an Interstate Highway system for
electricity suitable for Interstate
commerce
Pros of the I-system:
• Faster transportation by car and truck
• Increased commerce by truck
• Increased safety
Cons of the I-system:
• It was expensive to build
• It created new types of insidious congestion
• It precluded alternative solutions (e.g., trains)
• It increased “dependency on oil” and pollution?
• It encouraged urban sprawl
• It affected neighborhoods, farms, towns
Fernando L. Alvarado
Palo Alto, November 7, 2002
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PSERC
How would the SuperGrid differ from
the Interstate Highway system?
Electricity is fungible
It can be produced locally
It does not have to be transported
Goods and people are not as fungible
When you use the highways to transport a
grandmother, you must deliver the same
grandmother at the other end (Shmuelism)
The SuperGrid is only for electricity
Highways carry food, people, goods, etc.
The Internet carries voice, pictures, data, etc.
Fernando L. Alvarado
Palo Alto, November 7, 2002
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PSERC
How much transmission is
needed?
This is the wrong question!
How much transmission makes sense?
This is the right question!
Can generation replace transmission?
Distributed generation will reduce the need
Deregulation and proper price signals help
Fernando L. Alvarado
Palo Alto, November 7, 2002
10
PSERC
Why is “need” a bad question?
Need assumes no response to price
Nothing is insensitive to price
Other bad questions:
How much energy do we need?
How much reliability do we need?
How many cars do we need?
How much health care do we need?
Sure there are minimums to all the above to be able to sustain
an adequate human level of comfort, but we must either ask
about price or restrict the supply.
Benefit
Justifying transmission
Cost/benefit
Cost
Low cost
High benefit
Some risk
Medium cost
Medium benefit
Low risk
High cost
Negative benefit
Medium risk
Project size
There is also uncertainty in cost
Fernando L. Alvarado
Palo Alto, November 7, 2002
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PSERC
The distribution of benefits
Not everyone benefits equally
Not everyone benefits!
Fernando L. Alvarado
Palo Alto, November 7, 2002
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PSERC
Total Benefit
Distribution of benefits
Individual Benefit
Cost/benefit
Cost
Three parties benefit
One party loses
Fernando L. Alvarado
Palo Alto, November 7, 2002
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PSERC
Do Travelocity and Orbitz serve a useful purpose?
Specifics of benefits
For consumers on fixed rates
Benefit means a lower (sustainable) tariff for a given
level of consumption*
This is not an optimal way to assess benefit
For consumers on real time prices
Benefit means total integrated surplus*
For producers
Benefit means an increase in surplus*
Benefit means incentives for expansion
For traders ensuring liquidity and efficiency
Benefit means a sufficient profit to stay in business
(*) Depends on location
Price
Locational price duration curve
And there is a lot of
uncertainty about both
prices and durations!
Fixed tariff customers
see a benefit only if the
average price is lower
Average price
Time at price level
Price
Impact on consumer surplus
Highest
valued
energy
Consumer
surplus
Low valued energy use during high price period will
disappear and improve surplus if price signal is given
Lower
valued
energy
Time at price level AND percent of low vs. high valued energy
Is a locationally uniform price
the objective of a SuperGrid?
Should electricity cost the same
everywhere?
Should gas prices be the same everywhere?
Should real estate cost the same
everywhere?
Should all airline tickets cost the same?
I don’t think so
Fernando L. Alvarado
Palo Alto, November 7, 2002
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PSERC
Can generation replace
transmission?
In many cases, yes!
Reliability may increase
Voltage regulation may improve
Competition may increase
Transmission siting problems may diminish
Spatial price differences are essential
A completely uniform price at all times:
will ensure a bad spatial distribution of supply
is a signal that we have overbuilt
Eliminating all congestion would be a very expensive policy
Presumed pros of a SuperGrid
Enable national-level competition
Eliminate or greatly reduce market power
Eliminate transmission bottlenecks
Reduce the impact of bottlenecks is better
Increase system reliability
Fernando L. Alvarado
Palo Alto, November 7, 2002
20
PSERC
Alleged cons of the SuperGrid
The costs will be socialized
There will be large cross-subsidies
It will distort markets
It will create new problems
And will fail to solve many current problems
It will not generate more power
It will reduce reliability
Do we want the government running the power grid?
Fernando L. Alvarado
Palo Alto, November 7, 2002
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PSERC
Why a SuperGrid?
We have to do something!
Transmission is not being built
The government must help
There are economies of scale and lumpiness
Markets don’t work well in these cases
There is the tragedy of the commons
Some spend, all benefit
There are the jurisdiction issues
NIMBY syndrome
There are market power issues
A SuperGrid would eliminate market power (maybe)
Fernando L. Alvarado
Palo Alto, November 7, 2002
22
PSERC
Grid utilization trend in New York
Year
1999
1998
1997
1996
Central East
Total East
Flow>75% % of time within Flow>75% % of time within
of the time 200MW of limit of the time 200MW of limit
1697MW
26%
3375MW
1%
1549MW
35%
3493MW
3%
2285MW
85%
4800MW
7%
2365MW
90%
4800MW
2%
Transmission use appears to be on the decline
However, not always so in other cases
More “intra-regional” problems surfacing
The supergrid will not address inter-regional issues
Load pockets, load pockets, load pockets
“Grid utilization” is a bad metric!
Fernando L. Alvarado
Palo Alto, November 7, 2002
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PSERC
The persisting need for
transmission
The historical basis for transmission
need remains intact:
Sustainable resources remote from load
(Some) generation economies of scale
Reduced transportation (“coal by wire”)
Reliability (pooling of resources)
Interregional exchanges (seasonal, daily)
Fernando L. Alvarado
Palo Alto, November 7, 2002
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PSERC
Our sustainable resources
Technology
Nuclear
Coal
Hydro
Photovoltaic
Wind
Biomass
Geothermal
Gas turbines/Fuel cells
Issues and concerns
Spent fuel, safety
Emissions
Environmental impact
Cost, intermittency
Low density
Very low density
Limited sites
Needs hydrogen source
Transmission needs by technology
Technology Economies Remoteness
Nuclear
Scale
Coal
Scale
Hydro
Custom
Photovoltaic Production
Wind Production
Biomass
Custom
Geothermal
Custom
Fuel cells Production
Yes
Yes
Yes
It depends
Yes
Yes
Yes
No
Fuel
transport
Inexpensive
Expensive
Impossible
Impossible
Impossible
Expensive
Impossible
Pipelines
Reliability
Maintenance
Maintenance
Water
Insolation
Wind
Maintenance
Maintenance
Maintenance
Interregion
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Jeff Dagle
DER
DER can offset local adequacy constraints
Grid security can be enhanced through
proper design and operation of DER
Safety considerations properly addressed
Localized voltage support, stability enhancement
Planning takes on a whole new dimension
Grid utilization factors may decrease
Deregulation & markets
Deregulation changes grid utilization
Congestion pricing limits peak flows
Flow control (PAR, FACTS, DC) increase use
Inter-regional price differences are the result
of grid congestion (and losses)
Nodal pricing makes results unintuitive but efficient
Reliability has become a concern
Regulatory and governmental stability
essential to foster investment
“Tragedy of the commons” issues
Impact on the current grid
It will depend on specific features and
SuperGrid technology details
Are flow controls possible/easy?
What is the consequence of a fault?
What is the effect of a component failure?
How likely is a component failure?
Can failures cascade?
Will it allow us to “split the grid”?
Replace (yes, replace) many HVAC lines with new
technology superconducting high capacity lines
and split the system into separate AC islands?
Fernando L. Alvarado
Palo Alto, November 7, 2002
32
PSERC
Likely Supergrid Features
Large capacity
True grid (vs. point to point) but with
few large interconnection points
Limited redundancy due to high cost
Underground – failures could persist
for extended periods
Less likely to congest, but
Did Interstate roads eliminate congestion?
Fernando L. Alvarado
Palo Alto, November 7, 2002
33
PSERC
SuperGrid “Limitations”
Each connection point equivalent to a
large power plant or a large load
“Load pockets” are complex, nested
and interacting
The SuperGrid is unlikely to resolve all load
pocket issues
DER can help with load pockets
Targeted projects can also help (Neptune?)
Proper price signals help with load pockets!
Fernando L. Alvarado
Palo Alto, November 7, 2002
34
PSERC
Other current-grid issues
Impact on short-circuit duties and
stability must be considered
Common-mode failure possibilities
must be considered
Since electricity prices are not the
primary determinant of (most)
personal and business activities, the
possible impact of shifting patterns
must be considered
Fernando L. Alvarado
Palo Alto, November 7, 2002
35
PSERC
Additional technical issues
What will it really look like, in detail?
Inter-regional island connectivity only?
Will it be an overlay or a replacement?
Will it be used for high capacity lines only?
Will it be used all the way to substations?
Will it be used all the way to customers?
How do we design the “connection points”
for the SuperGrid?
Inverters/rectifiers into a synchronous grid?
Converters into radial parts of the system?
Are connection points bidirectional by design?
Fernando L. Alvarado
Palo Alto, November 7, 2002
36
PSERC
Additional concerns
“Big brother” issues
It will produce no new MWs
Congestion will just move around
It will not solve the load pocket problem
Will it increase or lower reliability?
And the most important question of all:
who pays for it and how
Fernando L. Alvarado
Palo Alto, November 7, 2002
37
PSERC
Conclusions
Traditional reasons for a grid still here
Pooling resources, interregional exchanges, etc.
Central generation (coal, nuclear) and renewable
(hydro) key to the supply portfolio beyond 2020
SuperGrid economic justification is essential
Goldplating will result in inter-regional subsidies
Subsidies lead to inefficiencies
The design details are important and need study
Load pockets and other problems will persist
Economic signals needed to deal with them