In a previous blog post I provided an overview of the future of renewables generation by highlighting five “Ds” I believe will take the market to the next stage. In this article, I want to explore what could potentially be the most provocative of the five Ds: the ability of renewables to become more dispatchable, meaning more controllable and able to be used on demand. For renewable generators, this opens the door to improved management of output risk in wholesale and balancing markets and the opportunity to play an increasing role in ancillary services provision.
It’s a provocative opinion in the face of the widely held view that renewables, by their intermittent nature, bring instability to grid operations, in contrast to the controllability and stability of conventional sources. This stability helps balance out demand peaks and compensates for the innate variability of renewables.
But the status quo is changing. While currently most renewable generation is “pure”—fed straight from the point of generation—in some markets we are seeing renewables becoming increasingly dispatchable. California, Arizona, the UK and Australia, for example, are already making moves toward increasing the dispatchability of renewables often with the use of storage (and batteries) and optimized solar configurations. For example, the falling costs of solar panels, tracking systems and smart inverters are resulting in generators adding more panels to produce more power in times of lower sunlight and curtailing their output during peak times. In markets where there are high unbalancing costs, Accenture’s experience shows that adding a battery to wind or solar farm can confirm that production commitments are met to reduce unbalancing costs. Operators are also experimenting with combining solar and wind, leveraging digital solutions to optimize the production from renewables sources with different production patterns.
As this trend continues, it’s likely to raise questions about the level of ongoing need for widespread use of conventional fossil generation to deal with peaks in demand.
The use of storage to manage peak electricity requirements by increasing the dispatchability of renewables is being encouraged by regulators. For example, storage is critical in meeting new regulations such as Arizona’s Clean Peak Standard, which mandates a proportion of clean resources at peak times, and California’s SB338, which requires utilities to plan for how carbon-free resources can help combat the solar "duck curve.”
Even without storage, digital technologies could make renewable generation more controllable—a move reflected in the increasing role of renewable generators in helping grid operators balance the system through the provision of ancillary services. In 2017, in response to a UK National Grid review that set out five key system needs including system inertia and reactive power, trade body Scottish Renewables explored how renewables could be—and in some cases are already are—used to meet each of them.
Australia is another market where regulators are pushing for dispatchability. The Australian Energy Market Commission (AEMC) passed a rule change requiring all new wind and solar farms to have the ability to control their active power output. This will enable them not only to limit their contribution to frequency and voltage disturbances but also to supply and absorb reactive power for the control of voltage. And aside from storage, another Australian company is exploring a further option for smoothing renewables production. This initiative would create hybrid plants combining elements like wind, solar, batteries and hydro, with each helping to offset any intermittency in the others. Vestas' Kennedy project in central north Queensland is the world's first utility-scale, on-grid wind, solar and battery energy storage project.
Meanwhile, in California, the NREL/First Solar demonstration project marked another step forward for dispatchability. It showed that utility-scale, grid-friendly solar PV power plants equipped with smart inverters and grid-friendly controls can support the grid stability and reliability needed for large-scale integration of PV generation, while also providing ancillary services normally provided by conventional generators.
What’s clear is that, despite widespread skepticism in many other sectors of the energy industry, digital, storage and hybrid plants are opening new ways to make renewables more dispatchable. As the proportion of renewables in the energy mix increases, their potential to create grid instability rises in tandem, making an ability to control the flow of renewable power increasingly important.
Not all renewables will become dispatchable. But once a significant proportion does, some obvious questions will arise. Here are a few: How will the business case for fossil peaking plant be impacted, when actively managed renewables and storage may be able to fill the gap—while also helping meet carbon emissions commitments? How much will renewables’ reduced intermittency and localized provision of ancillary services enable grid operators to save on grid reinforcement investments and congestion costs?
Ultimately, as ever in the power industry, regulators will have a big say in how this plays out. And the tide of regulation is flowing toward greater dispatchability for renewables. In my view, it’s clear: Renewables are becoming more controllable, and the energy landscape will never be the same.