Importance of Duck Curve

…Importance of Duck Curve…

The Duck Curve was prepared by the California System Operator (CAISO) to depict the pending problems associated with adding more renewables to the grid.

There are several ways to evaluate wind and solar.

One method evaluates an installation on the basis of levelized cost of electricity (LCOE). This is supposed to incorporate all direct costs, including financing, construction, fuel, and maintenance. It does not, however, include associated costs that are incurred because of the intermittency of wind and solar. While not direct, in an accounting sense, these added costs, such as maintaining spinning reserves, can’t be avoided.

Until recently an LCOE was a fairly straightforward way to evaluate the relative costs between wind, solar, coal-fired and natural gas power plants. It has recently become bastardized by including CO2 costs or using ersatz information, such as was the case with the Lazard LCOEs. See, Misleading Costs for Wind and Solar.

The CAISO Duck Curve is a graphical representation that goes beyond LCOEs. It establishes the impact that wind and solar have on the grid, and how the adverse consequences increase as additional wind and solar are added to the grid.

NREL said, “[The Duck Curve] Raises concerns that the conventional power system will be unable to accommodate the ramp rate and range needed to fully utilize solar energy, particularly on days characterized by the duck shape.”

As seen in Diagram 1, the CAISO Duck Curve depicts the displacement of baseload power by solar and wind.

Diagram 1, Original CAISO Duck Curve, March 31, 2013

The topmost load curve is for 2013, prior to the addition of significant amounts of solar or wind onto the California grid.

The bottommost curve is for 2020, when 30% of the grid’s electricity in California was to come from wind and solar.

From 7:30 in the morning until around 6 in the evening, renewables displace the electricity that was formerly generated by baseload plants. (Area in orange)

This results in utilities incurring the following economic penalties.

• In the evening, as the sun sets, the baseload plants must suddenly ramp up to meet the added load that occurs in the evening as lights are turned on and people start to cook and perform other household activities. The sudden, repetitive ramping up of power plants, produces thermal stresses that physically damage equipment.
• Utility companies lose the income that they formerly obtained from electricity sales that are now supplied by alternative sources, frequently not owned by the utility. They lose this revenue while incurring the costs of having to keep their baseload plants ready to supply power during the day if the sun stops shining. Some power plants must be in spinning reserves, burning fuel, ready to come on-line at a moments notice. The balance of the power plants that aren’t used for spinning reserves, and that weren’t designed to cycle on and off, must be available to come on-line in fifteen to thirty minutes.

Increasing renewables has the effect shown in diagram 2: The belly of the Duck Curve becomes distended.

California attempted to establish a goal of 100% renewables by 2045 which would have multiplied the negative consequences that wind and solar have on the grid.

Diagram 2

Referring to the two problems mentioned earlier, ramping up and loss of revenue, both become drastically worse.

1. The ramping up of power in the evening becomes a nearly insurmountable challenge
2. Utilities become unable to survive their loss of revenue

This latter point has been demonstrated in Germany where the two largest utilities, E.ON and RWE, are trying to divest themselves of all their coal-fired and natural gas power plants.

Due to the losses they have incurred, their stock prices have collapsed under Germany’s Energiewende program that was intended to replace fossil fuels with renewables. RWE has fallen from 97 EU in 2008, to as low as 11 EU this year, recovering slightly to 19 EU as RWE’s program to divest fossil fuel power plants evolves. E.ON has incurred an even more dramatic drop in its stock price as it divested its fossil fuel assets by establishing a new company Uniper.

Andree Stracke, Chief Commercial Officer, RWE Supply and Trading said, “[There has been] a 70% drop in traditional generation [earnings], from 93 billion euros to 28 billion euros in the same period, i.e., 2008 to 2015.”

The only way to mitigate the problems depicted by the Duck Curve is with storage.

Storage of the magnitude required to eliminate the Duck Curve is not feasible, and if it were, the costs would be insuperable. See, PG&E Storage Appraisal.

Summarizing the analysts’ conclusion of PG&E’s 18-month storage trial:

“There has been no breakthrough in electricity storage technology that delivers all the requisite features of high energy density, high power, long life, high roundtrip efficiency, safe handling, and competitive cost.”

Summary

LCOEs have generally shown that electricity generated by wind and solar costs more than electricity generated by coal and natural gas.

The Duck Curve demonstrates why wind and solar are not viable replacements for coal-fired and natural gas power plants.

• With very large amounts of renewables, the grid reaches a point where it cannot ramp up in the evening to the extent necessary within the time required. While not yet defined, the solution could be to ramp up fossil fuel plants earlier than needed, thereby displacing electricity being generated by wind and solar and creating an additional economic penalty to be borne by consumers, i.e., dumping the costly electricity generated by wind and solar.
• Utility companies lose revenues and can no longer sustain their investment in fossil fuel power plants. Trying to maintain fossil fuel assets results in bankruptcy unless utilities are compensated for maintaining these assets, such as with a capacity payment. Any capacity payment, either from the government or embedded in rates paid by consumers, would add an additional cost that must be borne by consumers.

German consumers are already paying three to four times as much for electricity as does the average American.

• Fossil fuel power plants must be maintained operational, ready to produce electricity when the sun stops shining or the wind stops blowing and at night.

Wind, solar and coal-fired and natural gas power plants are not interchangeable LEGO pieces.

The Duck Curve demonstrates why wind and solar cannot replace fossil fuels.

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