ps erc fernando l. alvaradopalo alto, november 7, 2002 1 the impact of a supergrid on the existing...

Fernando L. Alvarado Palo Alto, November 7, 2002 PSERC

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The Impact of a SuperGrid The Impact of a SuperGrid on the Existing Gridon the Existing Grid

Fernando L. AlvaradoThe University of Wisconsin

Workshop on a National SuperGridNovember 8, 2002

Palo Alto, California

Historical Basis for TransmissionHistorical Basis for Transmission

Renewable resources remote from loadHydroelectricity

Thermal generation economies of scale

Reduced transportation (“coal by wire”)

Reliability (pooling of resources)

Interregional exchanges (seasonal, daily)

Jeff Dagle, PNNL

The key questionsThe key questions

What is a SuperGrid?How much transmission do we need?

Why a “Super” Grid?Can’t “conventional” grid expansion be made to

work?

Won’t distributed generation do the job?Won’t proper price signals to generators do the job?

How much will the SuperGrid cost?Who will pay for it and how?What will be the impact on markets?

What technical problems will it solve/create?Will it solve the wrong problem?Will it create new problems?


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What is a SuperGrid?What is a SuperGrid?

A high capacity transmission network “overlay” over the existing grid

Interface to HV only / at the substation / to the home

using new technologySuperconducting HVDC, MVDC (50 kV range), or

LVDC cables, or AC cables

(DC lines and cables with new converters)

(Compact overhead line designs)

(Low capacitance AC cables)

and grid-arranged for reliability reasonsFlow control issues with DC grids!


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The “ideal” SuperGridThe “ideal” SuperGrid

would never congest.

would be invisible.

would be lossless.

would cost nothing.

would solve all problems and would create no new problems.


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In other words it would be…In other words it would be…

an Interstate Highway system for electricity suitable for Interstate commerce Pros of the I-system:

• Faster transportation by car and truck• Increased commerce by truck• Increased safety

Cons of the I-system:• It was expensive to build• It created new types of insidious congestion• It precluded alternative solutions (e.g., trains)

• It increased “dependency on oil” and pollution?• It encouraged urban sprawl• It affected neighborhoods, farms, towns


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How would the SuperGrid differ from How would the SuperGrid differ from the Interstate Highway system?the Interstate Highway system?

Electricity is fungibleIt can be produced locally

It does not have to be transported

Goods and people are not as fungibleWhen you use the highways to transport a

grandmother, you must deliver the same grandmother at the other end (Shmuelism)

The SuperGrid is only for electricityHighways carry food, people, goods, etc.

The Internet carries voice, pictures, data, etc.


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How much transmission is How much transmission is needed?needed?

This is the wrong question!

How much transmission makes sense?This is the right question!

Can generation replace transmission?Distributed generation will reduce the need

Deregulation and proper price signals help

Why is “need” a bad question?Why is “need” a bad question?

Need assumes no response to priceNothing is insensitive to price

Other bad questions:How much energy do we need?

How much reliability do we need?

How many cars do we need?

How much health care do we need?

Sure there are minimums to all the above to be able to sustain an adequate human level of comfort, but we must either ask about price or restrict the supply.


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Justifying transmissionJustifying transmission

There is also uncertainty in cost

Project size

Cost

Benefit

Low costHigh benefitSome risk Medium cost

Medium benefitLow risk

High costNegative benefitMedium risk

Co

st/

be

ne

fit


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The distribution of benefitsThe distribution of benefits

Not everyone benefits equallyNot everyone benefits!


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Distribution of benefitsDistribution of benefitsCost

Total Benefit

Individual Benefit

Three parties benefit

One party loses

Co

st/

be

ne

fit

Specifics of benefitsSpecifics of benefits

For consumers on fixed ratesBenefit means a lower (sustainable) tariff for a given

level of consumption*This is not an optimal way to assess benefit

For consumers on real time pricesBenefit means total integrated surplus*

For producersBenefit means an increase in surplus*

Benefit means incentives for expansion

For traders ensuring liquidity and efficiencyBenefit means a sufficient profit to stay in business

(*) Depends on location

Do

Tra

ve

loc

ity

an

d O

rbit

z se

rve

a u

sefu

l pu

rpo

se?

Locational price duration curveLocational price duration curveP

ric

e

Time at price level

And there is a lot ofuncertainty about bothprices and durations!

Average price

Fixed tariff customerssee a benefit only if theaverage price is lower

Impact on consumer surplusImpact on consumer surplusP

ric

e

Time at price level AND percent of low vs. high valued energy

ConsumersurplusHighest

valuedenergy

Lowervaluedenergy

Low valued energy use during high price period will disappear and improve surplus if price signal is given


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Is a locationally uniform price Is a locationally uniform price the objective of a SuperGrid?the objective of a SuperGrid?

Should electricity cost the same everywhere?

Should gas prices be the same everywhere?

Should real estate cost the same everywhere?

Should all airline tickets cost the same?

I don’t think so

Can generation replace Can generation replace transmission?transmission?

In many cases, yes!Reliability may increase

Voltage regulation may improve

Competition may increase

Transmission siting problems may diminish

Spatial price differences are essentialA completely uniform price at all times:

will ensure a bad spatial distribution of supply

is a signal that we have overbuiltEliminating all congestion would be a very expensive policy


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Presumed pros of a SuperGridPresumed pros of a SuperGrid

Enable national-level competitionEliminate or greatly reduce market power

Eliminate transmission bottlenecksReduce the impact of bottlenecks is better

Increase system reliability


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Alleged cons of the SuperGridAlleged cons of the SuperGrid

The costs will be socializedThere will be large cross-subsidies

It will distort markets

It will create new problemsAnd will fail to solve many current problems

It will not generate more power

It will reduce reliability

Do we want the government running the power grid?


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Why a SuperGrid?Why a SuperGrid?

We have to do something!Transmission is not being builtThe government must help

There are economies of scale and lumpinessMarkets don’t work well in these cases

There is the tragedy of the commonsSome spend, all benefit

There are the jurisdiction issuesNIMBY syndrome

There are market power issuesA SuperGrid would eliminate market power (maybe)


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Grid utilization trend in New YorkGrid utilization trend in New York

Central East Total East Year

Flow>75% of the time

% of time within 200MW of limit

Flow>75% of the time

% of time within 200MW of limit

1999 1697MW 26% 3375MW 1% 1998 1549MW 35% 3493MW 3% 1997 2285MW 85% 4800MW 7% 1996 2365MW 90% 4800MW 2%

Transmission use appears to be on the declineHowever, not always so in other cases

More “intra-regional” problems surfacingThe supergrid will not address inter-regional issuesLoad pockets, load pockets, load pockets

“Grid utilization” is a bad metric!


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The persisting need for The persisting need for transmissiontransmission

The historical basis for transmission need remains intact:

Sustainable resources remote from load

(Some) generation economies of scale

Reduced transportation (“coal by wire”)

Reliability (pooling of resources)

Interregional exchanges (seasonal, daily)

Our sustainable resourcesOur sustainable resources

Nuclear

Coal

Hydro

Photovoltaic

Wind

Biomass

Geothermal

Gas turbines/Fuel cells

Spent fuel, safety

Emissions

Environmental impact

Cost, intermittency

Low density

Very low density

Limited sites

Needs hydrogen source

Issues and concernsTechnology

Transmission needs by technologyTransmission needs by technology

Technology Economies Remoteness Fuel transport

Reliability Inter-region

Nuclear Scale Yes Inexpensive Maintenance Yes Coal Scale Yes Expensive Maintenance Yes

Hydro Custom Yes Impossible Water Yes Photovoltaic Production It depends Impossible Insolation Yes

Wind Production Yes Impossible Wind Yes Biomass Custom Yes Expensive Maintenance Yes

Geothermal Custom Yes Impossible Maintenance Yes Fuel cells Production No Pipelines Maintenance No

DERDER

DER can offset local adequacy constraints

Grid security can be enhanced through proper design and operation of DER

Safety considerations properly addressed

Localized voltage support, stability enhancement

Planning takes on a whole new dimensionGrid utilization factors may decrease

Jeff Dagle

Deregulation & markets Deregulation & markets

Deregulation changes grid utilizationCongestion pricing limits peak flows

Flow control (PAR, FACTS, DC) increase use

Inter-regional price differences are the result of grid congestion (and losses)

Nodal pricing makes results unintuitive but efficient

Reliability has become a concern

Regulatory and governmental stability essential to foster investment

“Tragedy of the commons” issues


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Impact on the current gridImpact on the current grid

It will depend on specific features and SuperGrid technology details

Are flow controls possible/easy?

What is the consequence of a fault?

What is the effect of a component failure?

How likely is a component failure?

Can failures cascade?

Will it allow us to “split the grid”?

Replace (yes, replace) many HVAC lines with newtechnology superconducting high capacity linesand split the system into separate AC islands?


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Likely Supergrid FeaturesLikely Supergrid Features

Large capacity

True grid (vs. point to point) but with few large interconnection points

Limited redundancy due to high cost

Underground – failures could persist for extended periods

Less likely to congest, butDid Interstate roads eliminate congestion?


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SuperGrid “Limitations”SuperGrid “Limitations”

Each connection point equivalent to a large power plant or a large load

“Load pockets” are complex, nested and interacting

The SuperGrid is unlikely to resolve all load pocket issues

DER can help with load pockets

Targeted projects can also help (Neptune?)

Proper price signals help with load pockets!


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Other current-grid issuesOther current-grid issues

Impact on short-circuit duties and stability must be considered

Common-mode failure possibilities must be considered

Since electricity prices are not the primary determinant of (most) personal and business activities, the possible impact of shifting patterns must be considered


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Additional technical issuesAdditional technical issues

What will it really look like, in detail?Inter-regional island connectivity only?

Will it be an overlay or a replacement?

Will it be used for high capacity lines only?

Will it be used all the way to substations?

Will it be used all the way to customers?

How do we design the “connection points” for the SuperGrid?

Inverters/rectifiers into a synchronous grid?

Converters into radial parts of the system?

Are connection points bidirectional by design?


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Additional concernsAdditional concerns

“Big brother” issues

It will produce no new MWs

Congestion will just move around

It will not solve the load pocket problem

Will it increase or lower reliability?

And the most important question of all:

who pays for it and how

ConclusionsConclusions

Traditional reasons for a grid still herePooling resources, interregional exchanges, etc.

Central generation (coal, nuclear) and renewable (hydro) key to the supply portfolio beyond 2020

SuperGrid economic justification is essentialGoldplating will result in inter-regional subsidies

Subsidies lead to inefficiencies

The design details are important and need study

Load pockets and other problems will persistEconomic signals needed to deal with them

ps erc fernando l. alvaradopalo alto, november 7, 2002 1 the impact of a supergrid on the existing...

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