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At least 37 records · Page 2

Hydrogen Storage for Flexible Fossil Fuel Power Generation: Integration of Underground Hydrogen Storage with Gas Turbine (Final Report)

As the nation continues to encourage, through market structures and financial incentives, the proliferation of intermittent renewable electricity, how to optimize the ever-changing electric grid and identify means to retain and improve resilience, while ensuring continued reductions in GHG emissions, will be critical. According to Bloomberg, wind & solar generated 10.5% of US electricity in 2020 and that percentage continues to grow. In support of expanding renewable energy use, and to address its intermittent nature, this project will develop the Hydrogen Storage for Flexible Fossil Fuel Power Generation platform that is dispatchable, reliable, repeatable and have the ability to produce zero or negative carbon power while interfacing with geology capable of CO2 and hydrogen storage. GTI Energy (GTIE) and team members Illinois State Geological Survey (ISGS), Mitsubishi Heavy Industries America (MHIA), Ameren Illinois, Hexagon Purus, and the Low Carbon Resources Initiative (LCRI) completed a Phase I Conceptual Study under contract DE-FE0032012 for Hydrogen Storage for Flexible Fossil Fuel Power Generation: Integration of Underground Hydrogen Storage with Gas Turbine. The Hydrogen Storage for Flexible Fossil Fuel Power Generation platform addresses the intermittent nature of the expanding use of Variable Renewable Energy (VRE) generation. The low cost of the electricity (COE) generated results in greater dispatch and more operation at higher power levels (higher efficiency), fewer short intervals, and fewer start/stop cycles. The reliable, resilient system can produce zero carbon power and store hydrogen. It will demonstrate hydrogen storage in geologic formations like those used in natural gas underground storage thus enabling large scale storage of hydrogen in sedimentary strata across the United States rather than in geographically restricted salt caverns. The Phase I study confirmed the system is feasible and generates power at lower cost than other low carbon approaches. The demonstration defines the pathway for broad commercial application and will accelerate the development of larger systems suitable for centralized utility scale electricity production. The study advanced the maturity of the H 2 storage-based system with flexible power generation by completing a Pre-FEED study (Phase II). The Pre-FEED focused on the selected Energy Farm on the University of Illinois Urbana-Champaign (UIUC) site that includes above ground and underground hydrogen storage, low-carbon hydrogen production (GTI’s Compact Hydrogen Generator, CHG) with underground CO2 sequestration, and a 40-MW class gas turbine. The Pre-FEED addressed the entire system and its interconnection to the natural gas and electric grid and mitigation of key risks, such as storage behavior, load-following, and system operation. During Phase 1 of the project, the team completed key tasks, which moved the entire demonstration project, specific components and approaches closer to commercialization. These Phase I Accomplishments include: Completing System Requirements Review; Completing System Layout and Modeling - Heat & Mass Balance and Process Flow Diagram; Completing modelling of 9 turbine performance cases; Evaluating rock strata for underground storage of hydrogen and sequestration of carbon dioxide; Completing initial modelling of underground storage of hydrogen and withdrawal with evaluation of loss and water production; Identifying roadable storage for above ground hydrogen storage; Identifying existing electrical infrastructure for receiving/delivering electricity; Identifying existing gas supply infrastructure for receiving natural gas; Document concept design/development plans in required reports. Conclusions: The 12-month Feasibility study in Phase I study was completed and confirmed the system is feasible and generates power at lower cost than other low carbon approaches and even lower cost than the reference NGCC plant without carbon capture when taking advantage of 45Q carbon credits. The study enabled the fidelity of the concept to be improved and allowed identification of the requirements for the system. Defining the individual system and component requirements was performed via the system requirements review with the whole team. These requirements were then incorporated into and iterated with our Heat & Mass Balance process model and process flow diagrams were generated to reflect the overall system. This information was then used to complete the TEA and show economic feasibility. Large scale non-salt geologic storage of hydrogen is an enabling technology for a hydrogen-fired turbine that can be retrofitted into large-scale electric generating units (EGU). Our demonstration will include 428 MWh or ~4 hours full load of hydrogen storage (above and underground). Carbon capture inherent to the CHG process can capture 90% CO 2 (with upgrades to >98%). This system provides a COE of 23% savings relative to an NGCC with a post combustion amine system. Our proposed storage system decouples carbon capture and hydrogen production from power production; therefore, we expect our proposed system’s efficiency and variable COE to be superior resulting in overall higher dispatch and reduced deep cycling. Our demonstration will be full to multi-day hydrogen storage and has the potential for longer (seasonal) duration commercially. The demonstration defines the pathway for broad commercial application and will accelerate the development of larger systems suitable for centralized utility scale electricity production.

03 NATURAL GAS↗

Control Design of Passive Grid-Forming Inverters in Port-Hamiltonian Framework

This article presents a modified dispatchable virtual oscillator control approach for achieving the passivity of gridforming inverters (GFMs), without assuming constant voltage and constant frequency. The proposed control framework utilizes the Port-Hamiltonian (PH) based structure that mimics the behaviors of coupled harmonic oscillators, along with an energy ‘pumpingor-damping’ block and the Control by Interconnection (CbI) technique, to render the inverter passive. Once passivity is achieved, transient stability of the system will be guaranteed. The proposed control framework is composed of three loops: an outer power dispatching loop that generates the voltage and frequency references, a virtual oscillator loop that emulates the spontaneous synchronization of oscillators, and an inductor current loop that maintains lossless interconnection in PH systems. In conclusion, the study shows that the proposed control approach ensures the passivity of GFMs, facilitating the transient stability design of multi-inverter systems, as interconnections of passive systems remain passive and stable.

42 ENGINEERING↗

Co-optimization of nuclear reactor flexible power operation and maintenance scheduling

As flexible power operation of nuclear power plants becomes more attractive due to the reduction in fossil-fueled dispatchable generation on energy grids, finding optimal power production strategies that balance revenue generation with operational concerns becomes more complex. This article presents a general framework to aid operators in designing economically optimal long term dispatch strategies for nuclear power plants. The principal novelty is the linking of estimated system remaining useable life (RUL) to strategic operational decisions. It is shown that, depending on the relationship between the fixed costs from maintenance and the associated lost revenue from an outage, it can be economically optimal in the long term to delay a maintenance outage and not perform this alongside refueling. For a given relationship between power ramping and degradation, optimal strategies were found that discouraged load following in some situations while minimizing unnecessary maintenance. It is shown that heavy load following can cause maintenance and refueling outages to diverge due to their inverse relationships with respect to load following, potentially leading to a significant loss in capacity factor. As a result, this general framework can be applied to specific reactor dispatch allowing operators to adapt operational strategies as future grid conditions change.

21 SPECIFIC NUCLEAR REACTORS AND ASSOCIATED PLANTS↗

Dispatching Grid-Forming Inverters in Grid-Connected and Islanded Mode

This paper explores the dispatchability of grid-forming (GFM) inverters in grid-connected and islanded mode. GFM inverters usually use droop control to automatically share power with other GFM sources (inverters and synchronous generators) and follow the change in the load demand; however, they can be dispatched like their grid-following (GFL) counterparts to output the target active and reactive power. This will help grid operators better manage their inverter-based resources (IBRs) to improve operation efficiency and reliability; therefore, this paper proposes an innovative concept of dispatching GFM sources (inverters and synchronous generators) to output the target power in both grid-connected and islanded mode by adjusting their droop intercepts. The fundamental principle is that the GFM inverter's active and reactive power is dictated by its frequency and voltage, and thus dispatching the active and reactve power of a GFM inverter can be achieved through dispatching its frequency and voltage. Moreover, the concept distinguishes the dispatch rules for grid-connected and islanded mode. Finally, the concept is validated with an example microgrid system with two GFM inverters, one diesel generator, one GFL inverter, and the load in both grid-connected and islanded mode. This pioneering work results in practical guidance for the development of energy management systems for future electric grids with GFM and GFL inverters.

dispatching↗

Evaluating power grid model hydropower feasibility with a river operations model

Production cost models (PCMs) simulate dispatch of generators across a large power grid and are used widely by planners to study the reliability of electricity supply. As energy systems transition away from the thermoelectric technologies that have traditionally balanced electricity supply and demand, hydropower and its representation in PCMs is of increasing importance. A limitation of PCMs applied to continental power grids with diverse generation portfolios is that hydropower generation is simulated without full consideration of complex river dynamics, leading to possible misrepresentation of grid flexibility and performance. In addition, data used in PCMs may reflect outdated operating policies. In this paper we propose a hydropower generation feasibility test for PCMs. The approach uses a detailed hydropower model to determine whether the hourly hydropower schedule from a PCM with simplified monthly parameterization can be attained after accounting for realistic river dynamics and operating policies, such as spill requirements and general water movement and balance through a cascade reservoir system. We perform this hydropower generation test for the ‘Big 10’ hydropower system on the Columbia River (part of the Western Interconnect of the United States), revealing 9% overestimation of available hydropower generation in a PCM solution in an average hydrologic year. Our evaluation provides insight on the cost and opportunities for better representing hydropower in PCMs.

54 ENVIRONMENTAL SCIENCES↗

Integrating an Ensemble Reward System into an Off-Policy Reinforcement Learning Algorithm for the Economic Dispatch of Small Modular Reactor-Based Energy Systems

Nuclear Integrated Energy Systems (NIES) have emerged as a comprehensive solution for navigating the changing energy landscape. They combine nuclear power plants with renewable energy sources, storage systems, and smart grid technologies to optimize energy production, distribution, and consumption across sectors, improving efficiency, reliability, and sustainability while addressing challenges associated with variability. The integration of Small Modular Reactors (SMRs) in NIES offers significant benefits over traditional nuclear facilities, although transferring involves overcoming legal and operational barriers, particularly in economic dispatch. This study proposes a novel off-policy Reinforcement Learning (RL) approach with an ensemble reward system to optimize economic dispatch for nuclear-powered generation companies equipped with an SMR, demonstrating superior accuracy and efficiency when compared to conventional methods and emphasizing RL’s potential to improve NIES profitability and sustainability. Finally, the research attempts to demonstrate the viability of implementing the proposed integrated RL approach in spot energy markets to maximize profits for nuclear-driven generation companies, establishing NIES’ profitability over competitors that rely on fossil fuel-based generation units to meet baseload requirements.

21 SPECIFIC NUCLEAR REACTORS AND ASSOCIATED PLANTS↗

The Health and Climate Benefits of Economic Dispatch in China’s Power System

China’s power system is highly regulated and uses an “equal-share” dispatch approach. However, market mechanisms are being introduced to reduce generation costs and improve system reliability. Here, we quantify the climate and human health impacts brought about by this transition, modeling China’s power system operations under economic dispatch. We find that significant reductions in mortality related to air pollution (11%) and CO 2 emissions (3%) from the power sector can be attained by economic dispatch, relative to the equal-share approach, through more efficient coal-powered generation. Additional health and climate benefits can be achieved by incorporating emission externalities in electricity generation costs. However, the benefits of the transition to economic dispatch will be unevenly distributed across China and may lead to increased health damage in some regions. Our results show the potential of dispatch decision-making in electricity generation to mitigate the negative impacts of power plant emissions with existing facilities in China.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Power System Resilience Considering Hurricane Storms and Generator Step-up Transformers

Power system resilience describes the system’s ability to withstand and recover quickly from unexpected power outages due to extreme events. As society’s electrification continues at a rapid rate, it is imperative electric infrastructure is designed and operated with extra security. This work studies the impact of severe hurricane storms on the power system located along the United States’ Eastern Seaboard. Specific focus is designated to steady state system operation and loss of large generation step up power transformers. A series of phasor domain power system simulations are conducted to determine the critical point at which the system loses steady state operability. Additionally, active power load shedding and generator dispatching are studied as mitigation and recovery strategies. Results indicate generator dispatching as an effective proactive mitigation strategy and load shedding as an effective recovery strategy.

Liu, Yilu↗

The Energy Transition: Advanced Nuclear Needed but Address Climate Vulnerabilities Now

The term “Energy Transition” is an attempt to capture an elaborate set of activities related to the modernization and decarbonization of energy grids. Performed concurrently and often in an ad hoc manner across local, state, regional and national boundaries, it is bringing chaos to what should arguably be one of the most conservatively managed of all critical infrastructure sectors. What’s more, with climate change producing an increasing tempo of extreme events, confidence in the intended resilient and redundant structure of the electric grids is likely to ebb. Even without these climate induced stressors, the nation’s electric grid was built for an earlier century. In addition to a drive towards greater efficiency via digitization and a continuing price decline in distributed energy resources (DERs), one could argue that climate change concerns are the primary driver of the energy transition. Non-CO2 emitting generation sources like wind and solar have become an important part of the overall generation fleet, albeit ones that cannot be counted upon to provide dispatchable power. Current projections indicate deployment of even larger percentages of DERs in coming years. Until far better storage capabilities arrive, the variability of wind and solar, inconsistent performance of traditional thermal generation plants, and energy delivery failures associated with natural gas pipelines will reinforce mounting reliability concerns. This pertains to both electric transmission and distribution. The recent shuttering of nuclear power plants in Germany, Japan, the US and elsewhere are also putting more downward pressure on dispatchable generation. Russia’s attack on Ukraine has roiled energy markets worldwide and forced some countries to return to coal as a primary fuel. In view circumstances such as these, it is essential that significant changes be made to policies and planning criteria, and to the standards and code on which they are based. Given the accelerating pace of extreme weather events, this needs to occur as soon as possible.

24 POWER TRANSMISSION AND DISTRIBUTION↗

Design of a Geothermal Power Plant With Solar Thermal Topping Cycle: Preprint

Geothermal power plants are a reliable source of low-carbon power generation. However, modern electricity markets comprise relatively large proportions of variable renewable energy generation that may require power plants to dispatch energy flexibly. The power output, efficiency, and dispatch flexibility of a geothermal plant can be enhanced by integrating solar thermal energy into the system, as well as possibly compensating against ambient temperature variations. Concentrating Solar Thermal (CST) can generate temperatures much higher than conventional geothermal systems. Using a solar topping cycle is one way to efficiently convert high-temperature solar heat to electricity while also adding lower-temperature heat to the geothermal power cycle, thereby increasing its power output and possibly its efficiency. A hybrid power cycle design is proposed and is simulated using SimTech IPSEpro process modelling software. The design configuration depends upon the expected temperature of the geothermal resource and the quantity of solar heat added at the design point. These design considerations are described and expected performance is calculated. The solar heat addition varies throughout the day and year, therefore off-design models are necessary to assess the impact of solar availability (and ambient temperature) on the power plant performance. Off-design models are developed and combined with hourly weather data to facilitate an evaluation of annual system performance.

concentrating solar power↗

Implication of production tax credit on economic dispatch for electricity merchants with storage and wind farms

The production tax credit (PTC) promotes wind energy development, reduces power generation costs, and can affect merchants’ joint economic dispatch, particularly for electricity merchants with both energy storage and wind farms. Two common PTC policies are studied – in the first policy, a wind farm receives PTC by selling wind generation to the market and its storage can be used to store energy from the wind generation and energy purchased from the grid but the energy released from the storage cannot receive PTC; in the second policy, the energy released from the storage can also qualify for PTC but purchasing energy from the grid is not allowed. We then employ dynamic programming to study merchants' optimal decision-making while considering PTC and the physical characteristics of storage systems. We analytically show that the state of charge (SOC) range can be segmented into different regions by SOC reference points under two PTC policies. The merchant's optimal action can be conveniently and uniquely determined based on the region within which the current SOC falls. Moreover, this study illustrates that PTC could substantially alter the optimal scheduling policy structures by affecting reference points and their relationships. The results showed that the frequencies for charging and discharging storage decisions decreased with an increase in PTC subsidy. Last, we confirm that, although the first policy allows merchants to buy electricity from the market, the second policy can bring more profits when the PTC is large at the current PTC rates. Furthermore, the findings can provide multistage decision-making guidance to electricity merchants in the wholesale power market.

17 WIND ENERGY↗

NPP Simulators for Coupled Thermal and Electric Power Dispatch

The Light Water Reactor Sustainability (LWRS) program within the United States Department of Energy supports extending the operation of the U.S. commercial nuclear power plant (NPP) fleet. Within the LWRS program, the Flexible Plant Operation and Generation (FPOG) Pathway works to diversify the revenue streams of light water reactors (LWRs) by opening opportunities for the co-generation of non-electric products in addition to supplying electrical power to the grid. Recent events have added greater motivation to these efforts. For example, the recent Inflation Reduction Act (IRA) passed by the U.S. federal government offers substantial tax incentives for producing clean hydrogen, the technology readiness level of dispatchable and high-efficiency hydrogen production has dramatically increased in a short time, and societal response to world climate change is driving a transition away from fossil fuels. Producing hydrogen with maximum efficiency using nuclear power requires dispatching both electrical and thermal power from the nuclear plant to the hydrogen plant, so testing concepts of operations for combined electrical and thermal power dispatch (TPD) from an NNP to a hydrogen plant is of interest. This report documents achievement of the Light Water Reactor Sustainability (LWRS) program milestone “Install and demonstrate a vendor-developed simulator on the Human Systems Simulation Laboratory (HSS) for dispatch of LWR electrical power to a close-coupled electrolysis plant” with a due date of Dec. 22, 2022. Several factors provide motivation for this effort. Coupling the power generation deck of a nuclear power plant to a hydrogen production facility introduces new possibilities for operational transients that must be addressed. In particular, the performance of the integrated system during startup and shutdown of the hydrogen production facility, as well as offnormal conditions, need to be evaluated to ensure there are no adverse effects on the operation of the existing NPP. The concept of operations involving the NPP, the hydrogen plant, and the electric power grid must be tested using NPP simulators and operating procedures that have been modified for TPD operations. These tests must also include dynamic simulations of the coupled tertiary thermal and electric loads as well as coordinated activities with NPP operators, tertiary load operators and grid power coordinators. The report summarizes progress in developing and testing full-scope NPP simulators at the HSSL, including a generic BWR simulator from GSE Systems, Inc. and generic PWR simulator from Westinghouse. In the case of the TPD-GBWR Simulator from GSE Systems, Inc., a BWR is thermally coupled to a high temperature electrolysis (HTE) plant that produces hydrogen and oxygen from de-ionized water. The hydrogen plant is not explicitly simulated but only included as a transient heat sink. A thermal power dispatch (TPD) system transfers heat between the steam systems at the BWR and the hydrogen plant. Operational results from two versions of the modified simulator are presented. The first version uses synthetic oil as a heat transfer fluid in a closed delivery heat loop (DHL) that generates steam at the hydrogen plant. The second version uses steam as the heat transfer fluid in a delivery steam line (DSL) to provide steam to the hydrogen plant. For both versions, the estimated thermal power delivery distance is approximately one kilometer. The amount of thermal power dispatched in the simulators is 15% of the total reactor thermal power such that the simulators provide a tool to study the feasibility of coupling a BWR to industrial processes that benefit from a combination electrical and thermal power dispatch. Ongoing work within a CRADA is also developing a full-scope PWR simulator provided by Westinghouse for both thermal and electric power coupling. This simulator is based on a PWR plant with two three-loop Westinghouse reactors. Westinghouse PWRs are sufficiently similar that a simulator of a three-loop reactor is an appropriate representation for two-loop and four-loop PWR reactors. The three-loop simulator will initially be modified for close-coupling to a 100 MW HTE hydrogen production plant that will require approximately 25 MW of thermal power while operating at its maximum rated capacity. The simulator testing will include full coupling to dynamic simulations of a hydrogen production plant and a representative bulk electric grid. The simulator provided by Westinghouse is similar to the GPWR simulator that INL has already obtained from GSE Systems but has a few important added benefits. First, the Westinghouse simulator is based on digital controls and has additional screens that can be called up to show parameter trends to assist operators in decision-making. The Westinghouse simulator also has upgrades to the controls and hardware representations, such as valve actuators, that make it more realistic and flexible in terms of accurately sim

99 GENERAL AND MISCELLANEOUS↗

Design of a Geothermal Power Plant With Solar Thermal Topping Cycle

Geothermal power plants are a reliable source of low-carbon power generation. However, modern electricity markets comprise relatively large proportions of variable renewable energy generation that may require power plants to flexibly dispatch energy. The power output, efficiency, and dispatch flexibility of a geothermal plant can be enhanced by integrating solar thermal energy into the system, as well as possibly compensating against ambient temperature variations. Concentrating solar thermal (CST) can generate temperatures much higher than conventional geothermal systems. Using a solar topping cycle is one way to efficiently convert high-temperature solar heat to electricity while also cascading lower-temperature heat to the geothermal power cycle, thereby increasing its power output and possibly its efficiency. A hybrid power cycle design is proposed and simulated using SimTech IPSEpro process modeling software. The design configuration depends on the expected temperature of the geothermal resource and the quantity of solar heat added at the design point. These design considerations are described and expected performance is calculated. The solar heat addition varies throughout the day and year; therefore, off-design models are necessary to assess the impact of solar availability (and ambient temperature) on the power plant performance. Off-design models are developed and combined with hourly weather data to facilitate an evaluation of annual system performance.

concentrating solar power↗

Powering Data Centers with Clean Energy: A Techno-Economic Case Study of Nuclear and Renewable Energy Dependability

Rising data demands from artificial intelligence (AI) and large language models (LLMs) generating images, videos, and text have prompted increased need for larger and more robust data centers in the United States. Major companies interested in these larger data centers face the choice of linking them to existing regional grids, building stand-alone power supplies onsite, or a combination of both. The request, review, and approval process for new transmission lines to grids in the United States, however, has grown in recent years to times spans rivaling those of new construction for nuclear power plants. Building an islanded power supply for each data center is therefore becoming a prominent option. In this case study, several technologies are modeled in techno-economic simulations for long-term system costs subject to fixed electricity demand from a singular data center. A 250 MWe data center is assumed with additional 50 MWe for resiliency. Techno-economic simulations are conducted using the Holistic Energy Resource Optimization Network (HERON) software, which is a part of the Framework for Optimization of Resources and Economics (FORCE) tool suite. Technologies considered include solar, wind, lithium-ion batteries, and several types of nuclear reactors: large-scale reactors, small modular reactors, and microreactors. A low- and high-cost estimate for each technology is assumed to develop a range of expected economic performance. Low-cost estimates included several clean energy production tax credits. Different combinations of renewable energy generators with nuclear reactors are considered, ranging from a fully renewable-powered data center to a fully nuclear-powered data center. Historic time series of wind and solar availability from the Texas grid are used to train a reduced order model; this model then generates unique time series with similar characteristics of the training dataset. Multiple scenarios of weather and subsequent operations are simulated for each renewable-nuclear combination to determine total costs throughout the project lifetime. Fully renewable-powered configurations required large amounts of installed capacity (GW scale) in the simulations to meet the fixed demand of the data center. This is due to some scenarios in the historical dataset which captured low-wind and low-solar days, requiring over-building of these technologies as well as batteries to compensate for the low amounts of electricity generation. Fully nuclear-powered configurations outperformed the fully renewable and mixed renewable-nuclear configurations in terms of cost, with ranges between $1B and $10B in 2023 USDs compared to $40B+ for fully renewable configurations. Of the nuclear technologies, small modular reactors performed better economically than large-scale nuclear models due to lower projected capital costs, and both performed better than the microreactor models. These results demonstrate the applicability of firm, dispatchable electricity resources from baseload generators like nuclear power plants for operating facilities that run at constant power without daily variability.

22 GENERAL STUDIES OF NUCLEAR REACTORS↗

Real-Time Dispatcher for a Distributed Energy Resource Power Plant to Provide Grid Services [SWR-25-17]

This software dispatches the aggregated power of a distributed energy resource (DER) plant located on an electrical distribution network. It is designed to provide the following services to the grid in real-time: (i) voltage support of the distribution network, (ii) virtual power plant at the substation with power factor support, and (iii) operating reserves for automatic generator control for the transmission system. This dispatcher integrates with the local power plant controller and utilizes the battery energy storage system (BESS) to smooth the volatile net power output from the DERs. It can also integrate with a day-ahead scheduler to strategically charge and discharge.

Comden, Joshua [National Renewable Energy Laborato↗

Optimizing design and dispatch of a renewable energy system with combined heat and power

We embellish a mixed-integer program that prescribes a set of renewable energy, conventional generation, and storage technologies to procure, along with a corresponding dispatch strategy. Specifically, we add combined heat and power to this set. The model minimizes fixed and operational costs less incentives for the use of various technologies, subject to a series of component interoperability and system-wide constraints. The resulting mixed-integer linear program contains hundreds of thousands of variables and constraints. We demonstrate how to efficiently formulate and solve the corresponding instances such that we produce near-optimal solutions in minutes. A previous rendition of the model required hours of solution time for the same instances.

24 POWER TRANSMISSION AND DISTRIBUTION↗

Impacts Analysis of Amendments to Mexico's Unit Commitment and Dispatch Rules

In Mexico, there are various amendments, approved and under discussion to significantly modify the order in which generation units are committed and dispatched. This report quantifies the potential impacts on Mexico's power system, utilizing a production cost model of the Mexican power system that analyzes the hourly optimal electricity dispatch of the Mexican electricity system for 1 year under four scenarios, a reference scenario, and three alternative scenarios. These scenarios are meant to evaluate the potential impacts of increasing participation of the state-owned power plants in generation mix, electricity production costs, emissions, and renewable curtailment.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

The Economics of Power System Transitions

Electricity generated by fossil fuels is dispatchable, meaning that generators can be turned on when needed. By contrast, renewable energy tends to be intermittent because of the variability of natural sources such as wind and sunlight. New approaches are needed to solve the challenges to electricity systems posed by the growing share of variable renewable energy (VRE) in these systems. Specifically, how should the physical power system and markets for electricity be structured to deliver electricity at low cost and reflect consumers’ preferences for reliability? Current power systems have largely achieved these two goals through a competitive market for generation based on marginal cost pricing and through mandated overcapacity to ensure 100 percent reliability to consumers. Decarbonization-induced increases in the share of generation from nondispatchable VRE create operational challenges: ensuring 100 percent reliability in a VRE-dominated system will be costly and inefficient. Preferences for reliability are heterogeneous, as some consumers will insist on 100 percent reliable energy, whereas others may be willing to forgo reliability for lower cost. In this article, we discuss ways to design a power system and electricity market that can address this inefficiency.

24 POWER TRANSMISSION AND DISTRIBUTION↗