The rapidly decreasing cost of renewable resources, coupled with various state and utility clean policies and emissions goals, are driving large renewable builds across the west. The result: a very different power system. The system requires flexibility, with resource options that can fill in those valleys when renewable energy is not available and support ramping needs when the sun goes down and the lights come on. Our modeling suggests that we need to rethink power system operations to ensure not only an adequate, efficient, economical, and reliable power supply, but one that continues to protect, mitigate, and enhance the important fish and wildlife in the region. To that end, the Council recommends the region undertake the following explorations aimed at broadening our thinking of power system operation.
Renewable Generation Impacts on Regional Hydro Operations
[Bonneville, System Operators, Federal and State Fish & Wildlife Agencies, Region’s Tribes]
[Council Role: Organize and support]
The substantial increases in renewable generation across the west shifts power system generation and transforms power markets. The oversupply of renewable generation during the day rapidly shifts to a need for other resources during the evening when the sun is down. Since hydropower has a low variable cost and is flexible, our analysis shows that it is well positioned to help the region absorb increasing renewable generation and ensure adequacy in the region. However, it is unclear how these daily river flow fluctuations will affect environmental conditions for fish in the river, particularly for juvenile and adult salmon and steelhead migration and for mainstem spawning and rearing habitat. The Council’s 2014 Columbia River Basin Fish and Wildlife Program contains measures recommended by the state and tribal fish managers calling on the system operators to minimize or reduce daily flow fluctuations, and yet the analysis suggests a need for increasing fluctuations for adequacy. The Council intends to organize and support an investigation into the implications of these changing river flows. This effort will bring together Bonneville, system operators, the federal and state fish and wildlife agencies, and the region’s tribes. The goal will be to explore the possible benefits and consequences of different hydropower system operations to identify a path forward that provides greater benefit to both power and fish.
Alternative Approaches to Support Renewable Integration
[Utilities, Regulators, Bonneville]
Our analysis suggests other approaches might provide low-cost solutions to support integrating renewables into the existing system. One example is the role of holding reserves. Plan analysis shows that more regional collaboration on holding reserves can provide a lower cost approach to system adequacy. When a utility holds more reserves, it has more of its existing generation ready to go if needed to address unexpected loads. Alternatively, with lower reserve amounts, the market prices diluted by the influx of renewables might not provide a sufficient signal to ensure those existing resources are otherwise available if needed. To better understand the trade-offs around holding more or less reserves, the Council recommends that the region’s utilities, regulators, and Bonneville conduct a study to explore how market liquidity by season and time of day can create price barriers for flexible resources and the cost of mitigating those barriers through greater reserves. This analysis should take into account different hydro conditions.
[Bonneville, Regional Utilities]
Another approach to supporting adequacy is demand response. As described above, balancing this system requires that resources are available to quickly meet loads as they come onto the system and can be curtailed as those loads go away. Demand response is a resource that can shift loads away from those high peaks to other times of the day when loads are otherwise low. The Council recommends that Bonneville and utilities research opportunities to use demand response to support system balancing. This effort should provide insight on how to improve modeling of these opportunities for future regional and utility power planning efforts.
Transmission and Non-Wires Alternatives
[Transmission Providers, NorthernGrid, Utilities, Load Serving Entities]
With a potential significant deployment of cheap, new resources vying for access to the transmission system and competing with established, oftentimes more expensive resources for dispatch to the grid, it is time for the region to reconsider how we contract, reserve, and schedule transmission access. It is common for a given transmission path to be fully contractually encumbered on a long-term firm basis while still having substantial available physical capacity most or all hours of the year. New resources may face transmission access queues up to several years, creating a barrier to, or slowing, development. While any unused transmission capacity must be marketed for short-term utilization, this can have limited value to project developers who require deliverability guarantees in order to receive financing. The Council recommends that the region’s transmission providers work with utilities, load serving entities, NorthernGrid, and others to develop a comprehensive review of the existing state of the transmission system, research potential short-term and long-term solutions to alleviate new resource development barriers while balancing existing long-term contracts and compensation to transmission providers, and explore the potential benefits of implementing a regional transmission operator in the Pacific Northwest.
Additionally, the region should continue to explore non-wires alternatives to address transmission and distribution constraints. Battery storage and targeted demand response, for example, can provide significant value to deferring the need for adding transmission. The Council recommends that the region consider the role of battery storage, targeted demand response, and other demand-side resources to address existing transmission capacity challenges. This research should speak to the role of these resources in alleviating some of the new resource development described above. Additionally, the Council recommends that the utilities and Bonneville consider the value of these opportunities on a case-by-case basis to address local needs.
Role of Hydrogen and Fuel Cell Technology
The 2021 Power Plan is the first to explore the use of hydrogen fuel cell technology as a potential clean energy resource. Hydrogen may be especially promising as a replacement for diesel fuel in heavy duty freight transportation and for some high-heat industrial uses. Currently there is limited demand and production in the region, however this may change in the future with the various clean electricity grid and emission reduction goals.
The Council recommends a study of the impacts, benefits, and challenges that large-scale demand and production of hydrogen in the region might have on the power system overall; and in particular, hydro and renewable power. For instance, one hydrogen production method—electrolysis—can be turned on and off; which maybe be useful for balancing load and soaking up excess renewable generation.