Navigant Research Blog

HVDC: The Future of Long-Distance and Renewables Transmission

— January 11, 2018

A quick glance at the US Department of Energy’s wind speed maps is enough to see that, in the US, wind energy is mostly where the people aren’t. The population megalopolises of the east and west coasts are thousands of miles away from the central states with high wind energy, challenging traditional high voltage alternating current (HVAC) transmission networks to overcome expensive and high loss transmission issues. Internationally, the same problem exists: How do developers make the most of untapped remote renewable resources?

Can the Solution Be HVDC?

High voltage direct current (HVDC) is a high capacity, long-distance transmission system with low losses. More expensive to build than HVAC power lines, an HVDC network becomes more cost-effective in the long run for distances of 400 miles or more on land and just 30 miles underwater. HVDC lines of 800 kV or more are commonly referred to as UHVDC (ultra-HVDC) As in the US, much of the world’s most valuable renewable resources are remotely located, and require long-distance transmission.

Delivering Energy with HVDC

(Source: Clean Line Energy Partners)

According to Navigant Research’s report Transmission System Upgrades for Renewable Energy Integration, global HVDC revenue is expected to grow at a compound annual growth rate of 9.5% from 2016 to 2025 and reach $12.7 billion by 2025. It focuses on HVDC’s application to renewables integration; the revenue figures do not account for HVDC installations for non-renewables transmission. The report also includes an in-depth analysis of the drivers, barriers, costs, and benefits of a HVDC system, a few of which are listed below.

HVDC systems can do the following:

  • Connect distances of more than 2,000 miles
  • Transmit up to 3 times more power than AC systems of equivalent voltage in a similar right-of-way
  • Transmit the same amount of power as an AC network in significantly smaller right-of-way
  • Interconnect grids over land and under sea
  • Provide grid operators with greater control over power flow with minimal losses

If HVDC Networks Are So Great, Why Aren’t They Everywhere?

Despite the benefits of HVDC, financial and regulatory barriers limit the construction of new HVDC networks. Current restrictions on right-of-way permitting and heavily controlled costs have suppressed penetration of HDVC systems, but that may change now that there are several significant projects underway. A few of the most significant upcoming projects are the following:

  • India-North-East Agra: The world’s first multiterminal UHVDC transmission link. The 800 kV, 1,073-mile link will supply enough power to serve 90 million people. Scheduled for completion in 2019.
  • United Kingdom-Western HVDC Link: The world’s first 600 kV or higher subsea HVDC network, with 239 of 262 total miles underwater. It is scheduled for completion in 2018.
  • Iceland-UK IceLink: This early-stage project will transmit power between Iceland and the UK. It will be 620-745 miles long, and will operate at 800 kV-1,100 kV. Estimated completion is 2027, and it will supply power to serve approximately 1.6 million homes.

Latest in HDVC

In early November 2017, the world’s first ­1,100 kV UHVDC transformer passed its type test, confirming the design criteria and operating parameters of the unit. Designed and built collaboratively by ABB and Siemens, the transformer will be commissioned in 2018 for installation as part of the Changji-Guquan link. Spanning 2,040 miles (3,284 km), the link will set world records for voltage, transmission capacity, and distance.

Looking Forward

Despite the high capital costs of HVDC, the benefits are clear, both for renewables and fossil fuel generation. The long-distance, high capacity systems can bring power to areas in need, deliver power from offshore wind farms to mainland cities, and reduce the environmental impact of transmission networks with smaller footprints. The commissioning of the Changji-Guquan link is a major step toward future intercontinental, long-distance, underwater, and over-land HVDC transmission systems, and it won’t be the last.

 

What Falls Under the Broad Microgrid Umbrella?

— January 9, 2018

There is arguably one question that needs to be answered by the customer thinking about microgrids: What do they really want in terms of a power supply solution? If the customer can quantify what they are seeking in terms of dollars saved, efficiency gains, or perhaps a reduction in downtime, then the solutions provider can design a system to meet those goals (whether that system meets the definition of a microgrid or not).

The question of whether you need a microgrid will be determined by different ownership models, geographies, and regulatory systems. Take the case of Duke Energy, a large vertically integrated utility serving customers in multiple US states. It views microgrids very differently than a third-party vendor focused on off-grid applications in the developing world.

Grid or No Grid?

Duke Energy jumped into the microgrid market seeking to build a system with off-the-shelf parts. It succeeded, but learned quite a bit about integration challenges, which led to its efforts promoting interoperability standards. It has since followed a dual path on microgrids, leveraging both its unregulated businesses in partnership with Schneider Electric for a community microgrid under a microgrids as a service business model, but also rate-basing a new microgrid at a National Guard facility in Indiana. For Duke Energy, microgrids are about enhancing traditional grid infrastructure. They can serve as a vehicle to integrate diverse distributed energy resources into its own power grid under a “do no harm” paradigm.

For Optimal Power Solutions, an Australian-based firm active in overseas developing economy markets such as India, Indonesia, and Malaysia, the perspective on microgrids is vastly different. “The term microgrid may be the broadest church of all,” commented Stephen J. Phillips, company founder and a 20-year veteran of deploying off-grid solutions for village and remote commercial customers. He observed that the majority of the 1,800 systems Optimal Power Solutions has deployed were designed to displace diesel burning in remote parts of the world. Today, however, much of its work revolves around “essentially installing an off-grid system that is connected to a standard utility grid.” Case in point are several grid-connected solar PV plus energy storage projects in Japan, including the Nagoya landfill project, designed to make such hybrid systems dispatchable and time-shift stored solar energy after the sun sets.

Latest Regional Trends

The US is the top country in the world in terms of total identified capacity according to Navigant Research’s newly published 13th edition of the Microgrid Deployment Tracker. The US has 6,213.1 MW of capacity across 853 projects. China comes in second place, a country where verifying project data is the most difficult of all countries. Perhaps the biggest surprise, however, is that Saudi Arabia jumps in at 3rd place with the addition of the Saudi Aramco microgrid cluster, a 2.2 GW project at the Saudi Aramco gas-oil separation plant in Shaybah, Saudi Arabia from Schweitzer Engineering Laboratories. This microgrid (technically eight interconnected microgrids operated by a single controller) is likely the largest group of nested microgrids in the world and the largest single entry in the Tracker.

India and Australia round out the top five countries in terms of capacity (see Top 10 figure). Is the Saudi Aramco project really a microgrid? From a controls perspective, the answer is yes. I’ll leave it to others to debate whether there should be a size limit on microgrids.

Top 10 Countries by Total Microgrid Power Capacity, World Markets: 4Q 2017

(Source: Navigant Research)

 

Is Mobility Key to Unlocking the Maximum Value of Energy Storage?

— December 27, 2017

The ability of distributed energy resources, including energy storage systems (ESSs), to defer investments in new transmission and distribution (T&D) infrastructure has emerged as one of the most attractive uses of the technology. Navigant Research has covered this topic in recent reports, including Energy Storage for Transmission and Distribution Deferral and Non-Wires Alternatives. In some cases, ESSs and other technologies can be used to entirely avoid the need for infrastructure upgrades, though these situations are rare. Most energy storage projects providing these services are designed to defer infrastructure upgrades for a period of 3-6 years on average. A deferral period of this length typically results in costlier T&D projects being profitably deferred with energy storage.

ESS vendors have worked for years to develop mobile storage technologies with the aim of overcoming this barrier and opening a much larger addressable market for potential T&D deferrals. While an ESS project may only defer T&D investments for 3 years, the storage system itself will last much longer. In theory, moving an ESS from one location to another every few years will allow for numerous T&D projects to be deferred and will maximize the value of a single storage system. The challenge with this concept has traditionally been designing a hardware platform capable of being moved from one location to another with relatively low costs, while not damaging sensitive batteries and power electronics. The maturation of the storage industry over the past few years has resulted in new designs for mobile ESSs that can be efficiently moved from site to site.

ESS Solution Product Testing

Con Edison in New York was one of the first utilities in the US to launch a project testing mobile ESS solutions. The mobile systems for this pilot project are designed to optimize existing T&D assets, defer investments and upgrades, and support the grid during emergencies or in response to unanticipated events. When not needed by the utility, the ESSs will be located at the Astoria generation plant, owned by project partner NRG Energy. At this facility, the systems can participate in the New York Independent System Operator (NYISO) markets for frequency regulation, operating reserves, and day-ahead or real-time capacity.

Con Edison and NRG Deployable Storage Asset      

Source: Consolidated Edison

The concept of mobile energy storage is quickly gaining traction in the industry. New Jersey-based startup Power Edison has developed integrated ESS products designed from the ground up for mobility, which it claims can significantly lower the cost of transportable storage. The company’s products come preconfigured in shipping containers, with power ratings from a few tens of kilowatts to several megawatts. The systems are specifically engineered to handle vibrations, changing environmental conditions, and other disruptions due to transportation with a custom-built trailer that can protect sensitive hardware components and not void vendor warranties.

ESS Solutions Add Value

A growing number of utilities have expressed interest in these innovative ESS solutions; however, questions remain around the true cost to move systems from one location to another and the potential effects to system hardware. The upfront costs for mobile ESSs are typically much higher than a standard stationary system due to the need for custom-built enclosures, battery mounting hardware, and trailers. Despite these challenges, mobile ESSs present a major opportunity to enhance the value and flexibility of energy storage on the grid.

 

DER Developments Challenge Incumbent Grid Operating Models

— December 27, 2017

Net metering has been a key driver for the deployment of solar PV distributed generation in the US. The simplicity of net metering—merely deducting the electricity generated during a year from the total electricity consumed, with no regard to the time when these two activities occurred—is easy for customers to understand. It simplifies the design process of installations, lowers the barriers to entry for distributed solar and wind, and has allowed the industry to develop.

But net metering creates an artificial barrier for the adoption of other flexibility-related distributed energy resources (DER) technologies like energy storage and demand response, as utilities are forced to provide balancing at no cost. Although net metering is still leading in the US, regulators in the main solar markets are tweaking it to pass some of the balancing costs to the end user. For example, California is moving toward time-of-use tariffs for all new distributed solar installations, opening the market to flexible technologies.

DER Deployments Increasing and Shifting

Navigant Research forecasts the deployment of all DER technologies in its Global DER Deployment Forecast Database report. We expect North America to install 31.5 GW of new DER capacity in 2017 and 98.1 GW in 2026. The technology mix for 2017 is led by distributed generation (DG), which accounts for 61.9% of the total DER capacity installed. However, by 2026, DG is expected to drive only 31.4% of new DER capacity additions, leaving a large market share to other technologies. These include flexibility, microgrids, energy efficiency, and (driven by the electrification of transport) EV charging, which is expected to lead DER new capacity in 2026 with a market share of 43.2%.

Despite the US leaving the Paris Agreement and its move away from the Clean Power Plan, DER capacity additions in the US are expected to be almost 8 times more than central generation deployments over the next decade. This includes central renewables like utility-scale solar and wind and significant amounts of natural gas power plants. Navigant Research forecasts the US will install 519 GW of DER capacity between 2017 and 2026, while the US Energy Information Administration’s International Outlook projects that the US will add just 66 GW of net new central generation capacity.

DER as Percentage of Annual Additional Capacity, US: 2017-2026

Source: Navigant Research

DER Developments Bringing Challenges and Improvements

DER developments are challenging incumbent grid operating models, requiring a more dynamic and flexible network with advanced communications and orchestration to ensure stability, efficiency, and equality among diverse resources. From a utility perspective, the overarching goal of DER deployments is to integrate these resources effectively to make the electricity grid more efficient, resilient, cost-effective, and sustainable. However, DER is usually deployed behind-the-meter, where customers are more concerned with securing cost-effective and reliable onsite power. This raises questions about who DER should be optimized for and the pace and scale of DER deployments.

Despite the disruption that DER is bringing, it is already possible to see the first sprouts of DER investments: a cleaner, cheaper, consumer-focused, and far more innovative power sector. For this reason, the transition to DER will not be easy for organizations used to the centralized energy model, but focusing on happy customers over electrons will help companies to thrive.

 

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