Chapter 10: Distributed Energy Resources

10.1 Balancing the Grid with DERs

• Traditional grid balancing based on generation following changing loads

• Intermittency of renewables stimulates demand response market

• Loads are beginning to follow generation

10.2 Another Challenge: The "Duck Curve"

• Independent system operators (ISOs) and regional transmission organizations (RTOs) responsible for grid balance

• Decreased demand during daylight hours due to solar power

• Concerns raised by California ISO about duck curves

• Total ISO load, net demand, and dispatchable power

10.2.1 Challenges Raised by Duck Curves

• Challenging ramp rates at the end of the day

• Potential for overgeneration during the sag in the middle of the day

• Projection for 2020 suggests ramping up generation to offset decreasing solar power

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• Factors affecting the integration of renewable energy into the grid:

  • Increasing amounts of power injected into the grid in the next couple of hours

  • Need for flexible, load-following generation for grid reliability

  • Potential vulnerability of the grid in case of sudden loss of conventional generator or transmission asset

• Consequences of the "duck curve" dropping below a certain threshold:

  • Solar plants may need to be curtailed, reducing their power output

  • Wholesale price of electricity could drop to zero or go negative

  • Reduced sales at lower prices make solar less cost-effective and reduce its environmental benefits

• Duck curves drawn for atypical days of the year (spring equinox without air conditioning season)

• Implications of duck curves on the grid's capacity for solar power and future carbon reduction goals

• Research on customer-side efforts to alleviate concerns about the integration of solar power

10.2.2 Teaching the Duck to Fly:

• Discussion on reshaping duck charts to mitigate the challenges of integrating variable-generation additions to the grid

• Proposed strategies to "fatten and flatten" the duck curve:

  • Target energy efficiency during peak load hours

  • Orient solar panels to the west

  • Substitute solar thermal with storage

  • Manage electric water heating loads

  • Include thermal storage capacity in new large air conditioners

  • Retire inflexible generating plants with high off-peak must-run requirements

  • Concentrate utility demand charges into ramping hours

  • Deploy electrical energy storage and EV charging controls

  • Implement aggressive demand response programs

  • Utilize interregional power transactions for load and resource diversity

• Figure 10.6 summarizes the outcome of the study, showing the impact of the proposed strategies on ramp rates, peak power demands, and total energy required

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• Demand Side Management (DSM) and its definition:

  • Utility programs to encourage consumers to control energy consumption on their side of the meter

  • Includes energy efficiency programs, load management programs, and fuel substitution programs

• Distinction between DSM and demand response (DR):

  • DSM focuses on longer-term measures to reduce energy consumption

  • DR focuses on controlling loads for shorter periods during peak demand

• Challenge for DSM to balance the needs of customers and utilities

• Comparison of initial net load with post-strategies in Figure 10.6

• Importance of utility influence on customer energy use and the motivation for doing so

Page 6: Utility Decoupling and DSM Programs

• Incentives are needed for both customers and utilities to participate in DSM programs.

  • Customers can be encouraged through rebates and attractive rate structures.

  • Utilities offer rebates for energy-efficient appliances and performance improvements.

• Decoupling sales from profits is key to getting utilities to help customers save energy.

  • The usual procedure encourages utilities to sell more electricity than predicted.

  • Decoupling utility sales from profits is achieved through the electric rate adjustment mechanism (ERAM).

• ERAM incorporates any revenue collected above or below the forecasted amount into the next year's authorized revenues.

• Utilities must be allowed to recover the costs of running their DSM programs.

• Incentives must be provided to allow utilities to make more profits helping customers save energy than through generation.

Page 7: Conventional Utility Rate Structures (before Smart Meters)

• Utility rates vary within customer classes based on energy consumption, season, time of day, and peak power demand.

• Large industrial customers pay less per kWh than most businesses, and businesses pay less than residential customers.

• Rate structures offered by most utilities were simple before the era of smart meters.

• Residential customers had monthly kilowatt-hours of consumption data collected manually.

• Commercial and industrial customers had simple kWh meters augmented with a peak kilowatts dial.

• Residential rates often use inverted block rate structures to discourage increasing consumption.

• Inverted block rates have tiers based on monthly kWh consumed, with rates increasing with increasing demand.

• Decoupling has stimulated the use of inverted block rate structures.

• Commercial and industrial customers have demand charges in addition to energy charges.

• Demand charges penalize customers with large peaks compared to their average loads.

• Demand charges provide a market for energy storage or load-shifting technologies.

• The impact of demand charges can be significant, with them sometimes comprising a large portion of the total bill.

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• Demand response programs can lower the cost of electricity in wholesale markets and reduce customer bills.

  • Various electricity pricing options are used to encourage customer participation, such as time-of-use pricing, critical peak pricing, and potentially real-time pricing.

  • Direct load control programs offer financial incentives for customers to allow utilities to cycle air conditioners, electric water heaters, and other loads during peak demand.

• Advanced Metering Infrastructure (AMI) allows grid operators to communicate with and potentially control key loads on the customer's side of the meter.

  • Smart meters, the heart of AMI, can measure and report power demands in near real time, eliminating the need for manual collection of meter data.

  • Smart meters also allow for remote connection and disconnection of customers and selective load shedding in emergencies.

• Time-of-Use (TOU) rates reflect the increased cost of generation during periods of high power demand.

  • Residential TOU rates encourage behavioral changes, such as cooling down buildings in the morning to reduce consumption during peak times.

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• TOU coupled with demand charges for commercial and industrial customers.

  • Smart meters enable distinguishing between peak demands during critical hot summer afternoons and off-peak times.

• Example of a residential TOU rate schedule.

• Example calculation of utility bills with tiered TOU rates.

  • Shifting consumption from peak times to off-peak periods can result in cost savings.

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• Demand charges for commercial buildings based on peak, partial peak, and off-peak periods

  • Example of a commercial building with a 200-kW peak demand during the noon-to-6 p.m. peak demand period

  • Calculation of demand charge using rate schedule: $6919/mo

• Impact of rooftop photovoltaic system on reducing energy bill and demand charges

  • Example of a new load curve with a demand charge of $5998/mo

  • Possibility of further reducing demand charges by orienting PVs towards the west or using electricity storage system

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• Introduction to critical peak pricing and time-of-use rates enabled by smart meters

• Description of two demand response programs offered by PG&E

  • "SmartRate" program: discount on electricity prices except for a few hours on SmartDaysTM

  • "SmartAC" program: voluntary program allowing control of household's air conditioning system

  • Incentives for participating in the programs

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• Utilizing thermal energy storage for load management and grid balancing

• Examples of load management strategies using thermal inertia of buildings

  • Precooling buildings during low-cost periods and coasting through peak demand periods

  • Night ventilation to reduce or eliminate mechanical cooling

  • Controllable electric water heaters and ice-making machines for cooling

• Benefits of managing electric water heaters

  • Existing resource base of 50 million households

  • Flexibility to avoid peak demand times and take advantage of price differentials

  • Quick response time for real-time balancing of supply and demand

  • Potential financial rewards in the regulation market when aggregated

  • Coupling with rooftop photovoltaic systems for additional benefits

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• Distributed Energy Resources (DERs) like pump water heaters have environmental advantages for net zero buildings.

  • Control strategies for water heaters:

    • Mitigate the duck curve phenomenon in spring and fall periods.

    • Provide overnight regulation services and capitalize on differential utility rates.

  • Controllable electric water heaters can be used to increase daytime load when excess power is generated from rooftop photovoltaics.

• Stanford Energy System Innovations (SESI) replaced Stanford University's cogeneration power plant in 2015.

  • Focuses on thermal energy storage and investment in photovoltaics.

  • Heat extracted from cooled buildings is used to heat other buildings.

  • Thermal storage provides a 1-day buffer.

  • Off-campus photovoltaic plant and rooftop solar provide more than half of the campus electricity needs.

  • Estimated to reduce greenhouse gas emissions by two-thirds and decrease water usage by 15%.

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• Thermal Energy Storage with Ice:

  • Making ice at night and melting it during high-rate periods provides cost-effective cooling services.

  • IceEnergy's Ice Bear 30 unit connects to existing commercial building rooftop air conditioning units.

  • The 480-gallon storage tank can shift 42 kWh of electrical demand to off-peak hours.

  • Ice storage systems can help supermarkets reduce utility bills and provide backup power during outages.

  • Retrofitted ice storage systems require minimal modifications to existing refrigeration systems.

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• Energy Storage: Electrical:

  • Electrical energy storage is crucial for a smart, resilient, renewable-based grid.

  • Storage systems help utilities manage power peaks, fill valleys, and address duck curve issues.

  • They provide ancillary services to the grid and firm up the output of variable generation systems.

  • Battery storage can offset loads during peak demand times and complement photovoltaic systems.

  • Battery storage can also help reduce demand charges and provide financial benefits.

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• Net metering allows rooftop solar systems to spin electric meters backwards when generating more power than the building needs

  • Customers use the grid as their backup storage system

  • Reverse power flows on local distribution system feeder lines can occur when too many customers spin their meters backwards

• Net metering is under attack and may disappear in the near future

  • On-site battery storage may be necessary for net zero buildings

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• Energy storage technologies include pumped hydro, compressed air energy storage (CAES), batteries, flywheels, and supercapacitors

• Batteries have advantages over pumped hydro and compressed air storage systems as they don't require special geographic features

• Flow batteries, such as the vanadium redox battery (VRB), use liquid electrolytes stored in large plastic tanks

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• Battery storage technologies include various versions of lithium-ion chemistries

• Batteries are usually specified by their amp-hour (Ah) capacity when discharged over a specified number of hours

• Battery systems consist of batteries wired in series and parallel combinations to achieve the needed voltage rating and amp-hour capacity

Applications of Stationary Storage:

• Load shifting and peak shaving can be achieved with energy storage

• Battery storage can address net metering challenges for residential solar systems

• Electric vehicles (EVs) on the grid can act as variable, controllable loads and sources of power

  • Aggregating EV loads could become an important grid asset

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• Distributed Energy Resources and vehicle-to-grid (V2G) systems

  • EVs can interact with the grid as flexible loads

  • Bidirectional on-board chargers can implement V2G concept by selling power during peak demand periods

• Cost-effectiveness of using batteries for load shifting

  • Battery costs $300/kWh of storage

  • Battery round-trip efficiency is 85%

  • Battery lifetime is 3000 cycles before replacement

  • Off-peak electricity costs $0.10/kWh

  • On-peak electricity costs $0.25/kWh

  • Evaluation of financial implications of buying off-peak power, storing it in a battery, and discharging the battery during on-peak periods

  • Replacement cost + charging cost = 21.76¢ per kWh

  • Batteries save 3.2¢ for each kWh of energy shifted from on-peak rate to off-peak rate

• Aggregating loads to provide ancillary services for the grid

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• Long periods of idle or charging time for energy resources at home, work, or buildings

• Aggregating resources to become a grid asset capable of providing frequency regulation and demand response

• Adjusting battery charging rates to avoid curtailment of renewables and reduce ramp rate stress

• Solar home systems for developing countries

  • Growing market for small photovoltaic and battery systems in regions without a reliable grid

  • Provide simple energy services like lighting and cell phone charging

• Distributed generation (DG) and its advantages

  • Small, modular power plants located close to loads

  • Various technologies can be used for DG

  • Efficiency advantages include reduced power line losses and waste heat capture in combined-heat-and-power (CHP) systems

  • DG can help reduce primary energy demand and greenhouse gas emissions

  • DG can defer upgrades to transmission and distribution (T&D) systems

  • Small DG systems allow utilities to match generation growth to load growth more accurately

  • Comparison between building a single large power plant and multiple smaller units

  • Potential savings of grid support can justify DG investments

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• Distributed Energy Resources (DER) can be cost-effective compared to large centralized power plants.

  • Smaller DER plants can cost 50% more per kilowatt of capacity and still be equally cost-effective.

• Most distributed generation in the US is provided by internal combustion engines tied to generators.

  • Air quality permitting constraints limit the use of these resources for anything other than emergency standby power.

• Only about 10% of these distributed generation systems are connected to the grid.

  • This suggests that a significant amount of distributed generation capacity is not being utilized.

• Emerging technologies like fuel cell systems could change the situation.

  • Fuel cells are cleaner, quieter, and easier to permit.

  • They can provide power and heat whether the grid is operating or not.

• Power quality and reliability are highly valued by high-tech industries.

  • These industries may be willing to pay more for these qualities than the energy provided.

10.7.1 Combined-Heat-and-Power (CHP) Systems

• Distributed generation technologies can produce usable waste heat along with electricity.

• Systems that produce both electricity and useful thermal energy are called Combined-Heat-and-Power (CHP) systems.

• CHP systems can be more efficient than separate grid-and-boiler systems.

  • Example: A CHP system with 100 units of energy input delivers 35 units of electricity and 50 units of useful waste heat, resulting in an overall efficiency of 85%.

  • In comparison, delivering the same 35 units of electricity from a 30% efficient utility grid would require burning 117 units of fuel.

  • Providing the 50 units of heat in a separate fuel-fired, 80% efficient boiler would require burning another 63 units of fuel.

  • The total fuel consumption in a separate grid-and-boiler system is 180 units, compared to 100 units in the CHP system.

  • The CHP system results in an overall energy savings of 44%.

• The economics of a CHP system can be complex.

  • The cost of electricity and heat needs to be characterized separately.

  • A common approach is to add the amortized capital cost of the CHP to the fuel cost to determine the annual cost of heat and power.

  • The cost of the heating fuel that is not needed due to the CHP system can be subtracted, and the remainder can be used as an indicator of the cost of electricity.

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• Fuel cells have the potential to provide an inexhaustible source of heat and light.

• Jules Verne's description of hydrogen and oxygen joining to provide heat and light accurately describes how a fuel cell works.

Solution Box 10.3: Economics of a Combined-Heat-and-Power System

• Example of a 10-kW CHP system with an electrical efficiency of 40% and a thermal efficiency of 40%.

• The system costs $30,000 and is paid for with an 8% 20-year loan with annual payments of $3055.

• The heat output of the CHP system displaces gas costing $10 per million Btu that would have been burned in an existing 85% efficient boiler.

• The cost of electricity from the CHP system is calculated.

  • The electrical efficiency of 40% means it takes 25 kW of heat to produce 10 kW of electrical power.

  • This requires 85,300 Btu/hr of fuel.

  • 40% of the fuel is captured waste heat, saving 40,140 Btu/hr of boiler fuel.

  • The cost of fuel attributed to the generation of electricity is calculated.

  • The cost of electricity is determined by adding the cost of the loan to the annual net fuel for electricity.

  • The cost of electricity is $0.084/kWh for a capacity factor of 0.90 and an annual delivery of 78,840 kWh.

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• Fuel cells are a type of energy conversion system that convert chemical energy directly into electrical power.

  • They deliver electricity as long as they receive a continuous supply of energy-rich fuel, usually hydrogen.

• Advantages of fuel cells compared to other energy conversion systems:

  • They avoid the traditional intermediate steps of converting fuel into heat, heat into mechanical motion, and mechanical energy into electricity.

  • They are not constrained by the Carnot limits, allowing for fuel-to-electricity efficiencies as high as 65%.

  • They eliminate or greatly reduce emissions of combustion products such as SOX, particulates, and partially burned hydrocarbons.

  • They can have no greenhouse gas emissions if powered by hydrogen obtained from water electrolysis using renewable energy systems.

  • They are vibration-free, quiet, and emit little pollution, allowing them to be located close to their loads.

  • They can provide continuous power during power outages.

  • Their waste heat can be used for cogeneration of useful heat.

• Proton Exchange Membrane (PEM) Cells:

  • A common configuration of a fuel cell consists of two porous gas diffusion electrodes separated by an electrolyte.

  • The choice of electrolyte distinguishes one fuel cell type from another.

  • PEM cells use a thin membrane capable of conducting positive ions (protons) but not electrons or neutral gases.

  • PEM cells are also known as solid polymer electrolyte (SPE) cells.

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• Operation of PEM Cells:

  • Hydrogen introduced on one side of a PEM cell is encouraged by a platinum catalyst to dissociate into protons and electrons.

  • Protons accumulate in the anode and diffuse through the membrane to the cathode, creating an open-circuit voltage across the cell.

  • When connected to a load, electrons flow from anode to cathode, delivering DC electrical power.

  • The net reaction in a PEM cell is the combustion of hydrogen to produce energy and water.

• Voltage and Efficiency of PEM Cells:

  • The voltage across a single cell is about 0.5 V, so multiple cells are connected in series to create decent voltages.

  • The hydrogen-to-electricity efficiency of a PEM cell is limited to a maximum of 83% due to the energy liberated as heat.

  • The overall efficiency of a PEM stack is typically 40%-60%.

• Other Fuel Cell Technologies:

  • Alkaline cells and phosphoric acid electrolyte cells have been developed but have limitations.

  • Direct methanol fuel cells (DMFCs) use polymer electrolytes and can use methanol as a liquid fuel.

  • Molten carbonate fuel cells (MCFCs) and solid oxide fuel cells (SOFCs) operate at higher temperatures and have high fuel-to-electricity efficiencies.

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Distributed Energy Resources

• Bloom Energy launched the first significant market for fuel cells

  • Bloom Energy has deployed large numbers of SOFCs

  • Used for facilities that need reliable power independent of the grid

• Example of Bloom Energy's 200-kW "Energy Servers"

  • Walmart has installed many of these servers

  • Some run on biogas instead of natural gas

• Hydrogen Production

  • Fuel cells run on hydrogen, which must be manufactured

  • Main technologies for hydrogen production: methane steam reforming (MSR), partial oxidation of hydrocarbons (POX), and electrolysis of water

  • MSR process: steam and natural gas passed through a catalyst at high temperature, producing syngas (CO and H2)

  • Syngas can be used as fuel in certain high-temperature fuel cells, but not compatible with PEM cells

  • Electrolysis is the reverse of conventional fuel cells, using membranes to split water into hydrogen and oxygen

    • Overall efficiency can be as high as 85%

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• Renewable Energy Coupled with Storage: A Carbon-Free Future?

  • When electricity for electrolysis is generated by renewable energy systems, hydrogen can be produced without greenhouse gas emissions

  • When hydrogen is converted back to electricity by fuel cells, carbon-free electricity can be achieved

• Comparison of hydrogen storage approach and battery storage

  • Rough estimates of round-trip energy efficiencies:

    • Electricity to split water producing hydrogen and oxygen: ≈ 85%

    • Compressing hydrogen for storage: ≈ 90%

    • Fuel cell efficiency to convert hydrogen back into electricity: ≈ 60%

  • Overall fuel-cell efficiency (electricity-to-hydrogen-to-electricity) round-trip efficiency: 46%

  • Estimated round-trip efficiency for Li-ion batteries: 85%

  • Battery efficiency advantage appears to be a significant challenge for hydrogen

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• The paradigm shift in the conventional utility grid system

  • Driven by increasing power from intermittent wind and solar resources

• Challenge for grid operators to balance supply and demand

• Distributed energy resources playing a significant role

• Possible impacts of increasing variable generation

  • Curtailment of solar power in the middle of the day

  • Challenging ramp rates for conventional generation in the late afternoon

• Demand-side responses to balance the grid

  • Enabled by smart meters and modified rate schedules

  • Load shifting, thermal and electrical energy storage, EV charging schedules

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• Distributed generation technologies on the customer's side of the meter

  • Combined heat and power systems

  • Fuel cells

  • Brief comparison of hydrogen and batteries for energy storage in a zero-carbon future

• Photovoltaics explored in the next chapter