Potential Reductions in Variability with Alternative Approaches to Balancing Area Cooperation with High Penetrations of Variable Generation

The work described in this report was performed by the National Renewable Energy Laboratory (NREL) and funded by the Office of the Energy Efficiency and Renewable Energy, U.S. Department of Energy (EERE DOE). This project is a joint project with the Pacific Northwest National Laboratory. With the anticipated rapid growth of variable generation such as wind and solar power, there is increasing interest in evaluating efficient methods for integrating these technologies into power system operation. Although the technology of the conventional generation (along with demand response and storage) plays an important role in the ability of the grid to absorb sources of variable generation, institutional roles also play an important role. In particular, large balancing footprints coupled with fast (sub-hourly) economic dispatch together can improve the efficiency of integration. Large balancing footprints result in geographic diversity from wind, solar, and load which can be more efficiently managed. Faster economic dispatch intervals allow the variability to be spread over a larger fleet of economic units, allowing for a greater combined response to variability in net load (i.e., load less wind and solar). This report evaluates the physical characteristics that improve the ability of the power system to absorb variable generation. It then uses evidence from electricity markets in the Eastern Interconnection of the United States to show how large, fast energy markets can help with integration. The concept of Virtual Balancing Area is introduced, a concept that covers a broad range of cooperative measures that can be undertaken by balancing areas to help manage variability. The proposed Energy Imbalance Service in the Western Interconnection is discussed, and examples of inter-balancing area cooperation and ramping reductions in the Pacific Northwest are examined. Ramping and variability impacts of virtual (or real) balancing area 1 Portions of this report have been previously published as various NREL technical reports and conference papers 2 Pacific Northwest National Laboratory R. Guttromson, Y. Makarov, C. Sastry, and N. Zhou.