Can Solar Save Utilities Billions?
Incorporating high levels of wind and solar power into the Western Interconnection grid, which includes 13 U.S. states and some parts of Canada and Mexico, could ultimately save utilities billions of dollars per year in fuel costs and reduce carbon emissions by one-third, finds a new report from the National Renewable Energy Laboratory (NREL).
According to NREL, the projected fuel savings outweigh added costs that the region’s utilities and fossil-fueled plant operators would have to incur in order to integrate the boost in wind and solar, which are intermittent energy resources. Through a practice called cycling, the lab explains, utilities often ramp up or down fossil plants in order to maintain reliable power when the wind doesn’t blow or the sun doesn’t shine.
As part of the study, NREL modeled the potential impacts of increasing wind and solar powergeneration to make up 33% of the western U.S.’ load in 2020. Debra Lew, project manager for the report, says that figure translates to a nominal 26% penetration across the entire Western Interconnection. However, she notes that most of the cycling would take place in the U.S.
Using the above simulation, the study estimates that cycling costs would reach between $35 million and $157 million per year in the Western Interconnection, which equates to a rise in O&M costs of approximately $0.50 to $1.30 per megawatt-hour of generation.
“Increased cycling to accommodate high levels of wind and solar generation increases operating costs by two percent to five percent for the average fossil-fueled plant,” Lew explains. “However, our simulations show that from a system perspective, avoided fuel costs are far greater than the increased cycling costs for fossil-fueled plants.”
In fact, the report says the added wind and solar power on the grid would help cut fossil fuel expenses by about $7 billion annually in the Western Interconnection region.
The study also finds that the additional cyclling would produce a “negligible” amount of carbon emissions when compared with how much carbon-reduction potential the renewables represent. The report says the high level of wind and solar would decrease net carbon emissions by one-third in the region, including billions of pounds of CO2 and millions of pounds of NOX and SO2.
“Cycling induces some inefficiencies, but the carbon emission reduction is impacted by much less than one percent,” comments Lew.
On average, the report says 4 MWh of renewable energy displaces 3 MWh of natural gas generation and 1 MWh of coal generation. NREL notes that the study focused only on operations and did not include other factors such as capital costs associated with building renewable energy projects or fossil-fueled power facilities. The report is available here.