Copyright – 2016 California ISO Page 1
Integrating High Penetration
Renewable Energy into the CAISO
MarketShucheng Liu, Ph.D.
Principal, Market Development
DOE CSP SunShot Program Summit
April 19, 2016
Copyright – 2016 California ISO Page 2
California SB 350 sets 50% Renewable Portfolio
Standard (RPS) goal for 2030
RPS
Goals
20%
33%
50%
2010 2020 2030
2013 actual 22.7%
2014 actual 25%
• RPS is calculated based on retail sales of electricity. It does not include
distributed PV and hydro power plant greater than 30 MW
Copyright – 2016 California ISO Page 3
CAISO conducted studies to assess the impact of
integrating high penetration renewable energy.
Biomass4%
Geothermal7%
Small Hydro7%
Large Solar PV27%
Small Solar PV22%Solar Thermal
4%
Wind29%
• A 40% RPS portfolio for 2024.
• Solar is more than 50% of the total 41,943 MW installed capacity.
• The portfolio excludes the 4,560 MW distributed PV.
Copyright – 2016 California ISO Page 4
The studies identified significant renewable curtailment
at 40% RPS.
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
14,000
1 2 3 4 5 6 7 8 9 10 11 12 13
Re
new
able
Cu
rtai
lme
nt
(MW
)
Month
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Copyright – 2016 California ISO Page 5
-5,000
0
5,000
10,000
15,000
20,000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
(MW
)
Hour
Nuclear CHP Hydro Combined Cycle
Pumped Storage Gas Turbine Steam Turbine Demand Response
Storage (generation) Net Import Net Load Curtailment
Energy balance on March 24, 2024 with 40% RPS
• Load includes energy used by pumped storages and battery storages
• Net Load = (Load – Renewable Generation – DG PV Generation), which could be negative
CCGT & storage
dispatched to
provide reserves
Copyright – 2016 California ISO Page 6
Renewable integration solutions are being explored in
three areas.
Area Solution
Change Load • Improved Time of Use Rates
• Targeted energy efficiency
• Decarbonization of transportation fuels
• Demand response
Change Supply • Storage
• Diversified renewable portfolios
• Economic dispatch of renewables
• Retrofit of existing power plants
Collaborate
Regionally
• Participating in the CAISO Energy
Imbalance Market by additional
Balancing Authority areas
• Joining the CAISO
Copyright – 2016 California ISO Page 7
“Pocket Guide” to renewable integration solutions
Category Integration Solution Findings
Net benefits
even without
renewable
• Regional
coordination
• More efficient dispatch and reduced renewable
curtailment
(http://www.caiso.com/informed/Pages/RegionalEnergy
Market/BenefitsofaRegionalEnergyMarket.aspx
Low cost
solutions with
potentially large
benefits
• Time of use retail
rates
• Sub-hourly
renewable dispatch
• Renewable portfolio
diversity
• Shifts energy consumption toward daylight hours
• Allows system to operate with fewer thermal resources
during over-supply events
• Avoids curtailment by spreading renewable production
over more hours of the year
Costs and
benefits should
be evaluated on
specific project
or program
basis
• Flexible loads and
advanced DR
• Additional storage
• Gas retrofits
• New flexible gas
resources
• Shifts energy consumption toward hours with over-
supply, but cost and potential are unknown
• Reduces curtailment but requires significant investment
• Makes existing resources more flexible at a low cost
• Provides limited dispatch flexibility at a high cost
Valuable,
though not as
much for
integration
• Energy efficiency
• Conventional
demand response
• Provides significant cost and GHG savings but may not
reduce curtailment
• Provides cost savings but does not significantly reduce
curtailment
Solutions with the highest identified renewable integration value
Copyright – 2016 California ISO Page 8
A CAISO special study on bulk energy storage
• To explore solutions to curtailment of large quantity of
renewable generation
• To assess a bulk storage resource’s ability to reduce
– renewable curtailment
– CO2 emission
– production cost
– renewable overbuild to achieve the 40% RPS goal
• To analyze the economic feasibility of the bulk energy
storage resource
http://www.caiso.com/Documents/Board-Approved2015-2016TransmissionPlan.pdf
section 3.5
Copyright – 2016 California ISO Page 9
The study cases are defined as
• Based on the 2014 LTPP
40% RPS in 2024
Scenario allowing
unlimited renewable
curtailment
• Using a new 500 MW fast
and flexible pumped
storage as the bulk energy
storage resource
• Overbuilding solar or wind
resources to achieve the
40% RPS goal
C: A + Solar
Overbuild
D: A + Wind
Overbuild
E: B + Solar
Overbuild
F: B + Wind
Overbuild
No Renewable
Overbuild
With Overbuild to
Achieve 40% RPS
A: 40% RPS
Scenario
B: A + a Bulk
Storage
Without Bulk Storage
With Bulk Storage
Copyright – 2016 California ISO Page 10
Capacity of renewable overbuild to achieve the 40%
RPS goal
1,918
1,569
1,129950
500
500
500
0
500
1,000
1,500
2,000
2,500
A B C D E F
Cp
apci
ty (
MW
)
Case
Solar Wind Pumped Storage
No renewable overbuild
A: 38.9% RPS achieved
B: 39.1% RPS achieved
Renewable overbuild
to achieve 40% RPSPumped storage plus
renewable overbuild
to achieve 40% RPS
Copyright – 2016 California ISO Page 11
California renewable generation curtailment
• Renewable generation is curtailed at -$300/MWh market clearing price (MCP).
A B C E D F
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
No Overbuild Solar Overbuild Wind Overbuild
Cu
rtai
lme
nt
(GW
h)
Case
Without Pumped Storage With Pumped Storage
A
-408
-792
-508
A B C E D F
40% RPS not achieved 40% RPS achieved
Curtailment
reduction
Copyright – 2016 California ISO Page 12
California CO2 emission
• California CO2 emission includes the emission from energy net import.
• CO2 emission cost can be calculated using $23.27/m-ton price.
60.5
61.0
61.5
62.0
62.5
63.0
No Overbuild Solar Overbuild Wind Overbuild
CO
2 E
mis
sio
n (
mill
ion
MTo
n)
Case
Without Pumped Storage With Pumped Storage
-0.33
-0.16-0.14
A B C E D F
40% RPS not achieved 40% RPS achieved
CO2 emission
reduction
Copyright – 2016 California ISO Page 13
WECC annual production cost
• Production cost includes start-up, fuel and VOM cost, not CO2 cost.
13,950
14,000
14,050
14,100
14,150
14,200
No Overbuild Solar Overbuild Wind Overbuild
Pro
du
ctio
n C
ost
($
mill
ion
)
Case
Without Pumped Storage With Pumped Storage
-56
-40
-31
A B C E D F
40% RPS not achieved 40% RPS achieved
Production
cost reduction
Copyright – 2016 California ISO Page 14
Levelized annual revenue requirements of the
renewable overbuild and pumped storage resource
703
575
340286
183
183
183
0
100
200
300
400
500
600
700
800
A B C D E F
Re
ven
ue
Re
qu
ire
me
nt
($m
illio
n)
Case
Solar Wind Pumped Storage
No renewable overbuild
A: 38.9% RPS achieved
B: 39.1% RPS achieved
Renewable overbuild
to achieve 40% RPSPumped storage plus
renewable overbuild
to achieve 40% RPS
Copyright – 2016 California ISO Page 15
Pumped storage levelized annual revenue requirement
vs. net market revenue of 2024
• Net revenue is revenue from generation, reserves and load following minus cost of
operation and energy consumed.
183 183 183160
194170
0
20
40
60
80
100
120
140
160
180
200
B - No Overbuild E - Solar Overbuild F - Wind Overbuild
($m
illio
n)
Case
Levelized Annual Revenue Requirement Net Market Revenue
40% RPS not achieved 40% RPS achieved
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