Automated demand response (AutoDR), energy storage and natural-gas generation will all be critical to avoiding the curtailment of renewable energy like wind and solar power, finds a new report from Lux Research.
As renewables like wind and solar approach 30% grid penetration, operators will need to increase the flexibility of their grids, using natural-gas generation; manage up to 2% of their peak loads with AutoDR; and employ energy storage for at least 0.5% of the annual electricity generated in order to avoid renewable energy curtailment and outages, the firm says.
On days with the largest supply-and-demand discrepancy, the storage requirement will jump to 5.2% of installed capacity and 1.9% of daily consumption in order to fully meet demand, Lux Research adds.
"The emergence of modern wind and solar technologies promises to satiate government-mandated desires for large-scale renewables," says Brian Warshay, Lux Research associate. "But resources depending directly on the wind and sun for their fuel bring with them the same uncertainty as the evening news weatherman, meaning utilities will need to change their grid operations to account for the unreliable supplies of large-scale intermittent renewables."
Lux Research examined daily supply-and-demand curves in different climate regimes over the course of a year for scenarios with wind and solar penetration of up to 50% of grid capacity in order to identify the lowest-cost technology options required to manage intermittency.
The researchers found that AutoDR offers the cheapest option, at $0.016/kWh. However, AutoDR cannot manage more than 2% of the peak generation at 30% renewables penetration.
Price volatility dims the option of natural gas. However, electricity generated from natural gas can address large, long-lasting supply fluctuations better than AutoDR can, even though its levelized cost of energy is 3.7 to five times higher, according to Lux Research.
With natural-gas prices at a historic low, however, doubling the natural-gas capacity in a mixed grid could facilitate the integration of wind and solar by offering increased supply flexibility for grid operators, cutting the storage requirement by 60% for 50% renewable energy penetration.
Wind and solar growth drives storage demand. In a grid with 1 GW of peak demand, consuming 168 GWh per year, with a typical generation mix and demand profile, 59 MWh of storage capacity is required with 10% wind and solar, while 1.323 GWh of storage is required with 30% renewables, and 1.751 GWh of storage is required with 50% renewables, according to the report.