McKinsey: Less carbon means more flexibility: Recognizing the rise of new resources in the electricity mix

My Nissan Leaf Forum

Help Support My Nissan Leaf Forum:

This site may earn a commission from merchant affiliate links, including eBay, Amazon, and others.

GRA

Well-known member
Joined
Sep 19, 2011
Messages
14,018
Location
East side of San Francisco Bay
https://www.mckinsey.com/industries...34&hdpid=0f7efac6-7c97-4248-8bdd-6527357dd612

Steps that are, may need to be taken tio integrate VRE:
. . . enewables such as wind and solar now account for the majority share of new electricity generation capacity being built globally. Though still dwarfed in the generating fleet by more traditional generation options such as coal, gas, and nuclear power, intermittent resources have risen dramatically, first aided by supportive policies, technology advances, and consumer preferences but now driven more by economics.1 This has resulted in a growth of the contribution of renewable generation in the United States. As of year-end 2017, approximately 17 percent of electricity in the United States was generated by renewables (including hydropower). Through March 2018, renewables accounted for about 21 percent of all electric generating capacity.2 The European Union is even farther ahead of the United States: in 2017, approximately 30 percent of the EU’s electricity was generated by renewable energy sources.3

The rise of renewables is expected to continue, at least for the next few years. Policy makers in the European Union have set high and aspirational decarbonization goals: by 2030, cut greenhouse-gas emissions by 40 percent compared to a 1990 baseline.4 Germany’s coalition government agreement5 set a new 65 percent target for renewable penetration by 2030. France is aiming for a 40 percent share of renewables in electricity production.6

In the United States, despite the announced withdrawal from the Paris accord, some states are implementing their own renewable-energy policies: California,7 New Jersey, and New York have required utilities under their jurisdiction to have 50 percent of their electricity come from renewable resources by 2030, while Massachusetts recently enacted a 35 percent renewable portfolio standard. Many utilities in the United States are replacing coal capacity with a mix of renewables plus, in many occasions, energy storage. . . .

Beyond policy goals, the growth of renewables is supported by their improving cost outlook. According to Lazard’s year-end 2017 estimate, levelized cost of energy (LCOE) for utility-scale renewable electricity continues to fall, averaging $45 per megawatt-hour (MWh) for unsubsidized wind power and $45 to $50 per MWh for utility-scale solar, compared to approximately $60 per MWh for combined-cycle natural gas.8

In several geographies, solar and wind are already competitive with other sources of generation based on LCOE, even without tax or production subsidies. In LCOE terms, these resources are expected to be the cheapest source of electricity within the next decade.

However, LCOE metrics ignore one important consideration. Renewable generation is intermittent and frequently unpredictable. Furthermore, the uneven geographic distribution of wind and solar potential is likely to stress the grid in some locations, leading to transmission and distribution constraints.

These low-cost, renewable kilowatt-hours come with intermittency, volatility, and grid-integration costs, creating new grid-planning requirements for backup capacity and ramping. New types of electricity services, beyond the traditional energy and four-to-six-hour capacity requirements, can be fostered to manage these intrinsic characteristics of clean-generation technologies. Those services are flexibility and resiliency.

Some electricity markets, such as the California Independent System Operator (CAISO), Germany, and the United Kingdom, have started to recognize, to varying degrees, flexible and resilient electric resources. And policy makers at the Federal Energy Regulatory Commission (FERC) and the PJM Interconnection are shifting focus, in the United States at least, to the role that battery energy storage and flexible resources like distributed resource aggregators (DRA) could play as electricity markets evolve.

We believe significant steps can be taken toward decarbonizing the electricity supply through thoughtful, concerted action, as we discuss below. . . .
There's a whole lot more, and I recommend reading the original article.
 
Back
Top