Innovative Solutions to Curtailment. Lessons from the Aloha State

Transcription

1 Innovative Solutions to Curtailment Lessons from the Aloha State

2 Purpose of the Presentation Outline how the Hawaiian Electric Companies are changing practices to better manage and mitigate curtailment issues for large wind and solar projects Part One Enhanced Modeling Tools Part Two New Concept for PPA Contracts Speakers Dora Nakafuji Director, Renewable Energy Planning, Hawaiian Electric Greg Shimokawa Energy Contract Manager, Hawaiian Electric John Sterling Senior Director, Research & Advisory Services, SEPA 2

3 3 Contrac(ng for the Future: Innova(ve Solu(ons to Curtailment Hawaiian Electric Companies Greg Shimokawa Dora Nakafuji September 14, 2016 Solar Power InternaEonal Las Vegas, NV

4 There s No Place Like Hawai i 4

5 There s No Place Like Hawai i 5

6 6 OpportuniEes and Challenges " Abundance of Renewable Energy Resources " 100% RPS mandate " Island grids present unique challenges Increased Curtailment Risks Hawaiian Electric Companies service territories encompass five independent systems Need to manage / reduce customer bills

7 Hawai i s New Renewable Energy 7 Goals On June 8, 2015 Gov. David Ige signed Act 97 into law, giving Hawaiʻi the most ambiuous clean energy goals in the country requiring 100 percent of electricity sales to come from renewable resources by In 2015, the Hawaiian Electric companies achieved 23.2 percent net electricity sales from renewable energy resources

8 8 Rising with the Sun Increased Distributed GeneraUon (DG) resources lead to increased curtailment risk for uulity-scale renewable resources More MW of roo\op DG than our largest power plant

9 9 Reducing Our Dependency on Oil Reducing dependency on oil and achieving a 100 percent RPS will require: " a diverse por^olio of renewable energy resources " effecuve use of technologies such as energy storage " efficient energy use " resilient, modern power grids

10 State of the State: Curtailment Risk in 10 Hawai i " Increasing penetrauon of distributed PV has created a surplus of dayume, non-dispatchable generauon on all of the Hawaiian Islands " This generauon, which is not directly controlled by the uuliues, is effecuvely must take ; that is, the uuliues must manage other convenuonal and renewable generauon resources around the output of these systems " Each island must balance load and generauon on its own no interconnected system between the islands exists " Because of distributed solar penetrauon, some islands are projecung curtailment as high as 20% to 50% in the near future

11 11 Changing How We Think " 100% RPS requires a mindset shi\ Over-procurement of intermihent generauon Must-take resources may see increased curtailment " New contracung approaches can address these issues Resource assessment Facility availability OperaUonal flexibility Risk allocauon " Need to move beyond the mindset and language of curtailment in favor of dispatchability " Need for robust modeling to support new contracung structures

12 Increased ForecasEng/Data 12 Requirements " More robust forecasung and data-driven analysis required to support these new contracung mechanisms SWIFT ForecasUng and VisualizaUon tools DREAMS for System Operators SEAMS for SHINES technologies

13 13 Where Do We Want to BE? Diversified Services " Engaged Customers with Value Added " " SaUsfied Regulators " Sustainable Costs and Margins

14 Our Current CondiEon 14 Meet Nessie Typical Hawaii load profile Evening Peaking Bessie the Elephant What s Our New State?

15 Reality 15

16 OrchestraEng Reliable FoundaEon for AlternaEves 16 Opportunity for diverse resources - 100% RPS Reliable FoundaUon Enabling Customer Plug-n-Play

17 Por]olio Based Approach for Renewable Modeling/ValidaUon Feeder Monitoring IntegraEon " Decision-based analysis to assess impacts " Re-training & re-tooling the workforce " Fostering a strong workforce pipeline New Energy Mgt Tech Resource Forecast & Monitoring Workforce Dev. & Interns 17

18 SWIFT Bird s Eye View SituaEonal Awareness 18 Cloudy Day Pa_ern Clear Day Pa_ern No to very low producuon < 30% High, steady 100% Source: Hawaiian Electric & AWS Truepower 18

19 LocaEon & Seasons Ma_er Even in Hawaii Can result in 30% energy producuon difference between wet and dry season Dry Season Wet Season Annual Average GHI Resource LocaUons 19

20 Sustain Re-Tooling & Development of Workforce Non-tradi*onal u*lity field equipment 20 20

21 Seeing & ValidaEng DG Ramp Impacts 21 SWIFT Forecast 40-50MW Jump in Load Corresponding drop in PV Source: Hawaiian Electric & AWS Truepower Yesterday is not a good predictor of Today anymore 21

22 See & Trending DistribuEon Hotspots 22 Online LVM DG Integrated Model G G Existing Generators Additional Generators Solar Resource % Pen = Installed MW/Gross Daytime Min Load Source: Hawaiian Electric Circuit Trend

23 Bringing it All Together: EMS IntegraEon Distributed Resource Energy Analysis & Management (DREAMS) for Grid Opera(ons 23 SWIFT Source: HECO 23

24 SEAMS for SHINES UElity & Customer Interface 24 Customer Side S B S B TradiUonal UUlity & SCADA SEAMS Architecture Pole S B

25 System Visibility Through Edge-of-Network Technologies 25 Renewable Resource Monitoring & ForecasUng (SWIFT) SODAR Event SWIFT ForecasUng RE & DG Infrastructure Modeling LVM STEM Distributed Storage REData AnalyUcs & VisualizaUon Ops IntegraUon & TransformaUonal Technologies Gridco DG control & monitoring Analysis tools & models Technical Outreach CollaboraUons & Workforce Development Real-Ume customer data & devices 25

26 Partnership with 26 SEPA / Sco_Madden " CollaboraUon to work on exploring a new dispatchable renewable generauon PPA model Awareness of Hawai i s unique challenges A postcard from the future SEPA s reputauon as an independent trusted pla^orm for educauon, research and collaborauon ScohMadden s energy industry experience ConnecUons with a diverse group of industry stakeholders

27 Problem Statement What new types of contracting can be pursued to better manage and balance the risk that curtailment will continue to present to Hawai i? 27

28 Project Overview SEPA and ScottMadden brought in to help identify innovative solutions Considered over a dozen new procurement and contracting models that could help address curtailment risk Deep dived on three specific approaches: Capacity and Energy PPAs Time-of-Day Pricing Dispatchable Renewable Generation (preferred approach) 28

29 Project Overview: Quantitative Review Assumed a 10 MW solar installation with an LCOE of $100/MWh as a baseline project Considered risk from multiple vantage points (both IPP and customers) via quantitative metrics Project NPV Debt Service Coverage Ratio Effective PPA Price ($/MWh delivered) Reviewed two scenarios for how projects may be priced No anticipated curtailment 20% anticipated curtailment Reviewed four scenarios for how actual curtailment impacts economics 0% / 10% / 20% / 30% actual curtailment 29

30 Impact of New Structures on Project NPV All models considered reduced the downside risk for developers on project NPV $3.0 Project Risk $2.5 $2.0 Project NPV ($M) $1.5 $1.0 $0.5 $0.0 ($0.5) ($1.0) ($1.5) 25% Capacity Payment, No AnUcipated Curtailment 25% Capacity Payment, 20% AnUcipated Curtailment 75% Capacity Payment, No AnUcipated Curtailment 75% Capacity Payment, 20% AnUcipated Curtailment ToD - South- Facing Solar Dispatchable Renewable GeneraUon ($2.0) No Actual Curtailment Current State - No Curtailment Risk 30% Actual Curtailment Current State - 30% Curtailment Risk 30

31 Impact of New Structures on DSCR* All models considered reduced the downside risk for developers on project DSCR Debt Service Coverage Risk DSCR % Capacity Payment, No AnUcipated Curtailment 25% Capacity Payment, 20% AnUcipated Curtailment 75% Capacity Payment, No AnUcipated Curtailment 75% Capacity Payment, 20% AnUcipated Curtailment ToD - South- Facing Solar Dispatchable Renewable GeneraUon No Actual Curtailment Current State - No Curtailment Risk 30% Actual Curtailment Current State - 30% Curtailment Risk 31 *Debt Service Coverage RaUo (DSCR) represents the likelihood that a project s future revenue streams can cover its debt obligauons; frequently used by lenders to set rates when financing a project

32 Impact of New Structures on Effective $/MWh for Delivered Energy* All models considered reduced the EffecEve $/MWh for customers in high curtailment situaeons EffecEve $/MWh for Delivered Energy $160 Net EffecEve $/MWh $140 $120 $100 $80 $60 $40 $20 $0 25% Capacity Payment, No AnUcipated Curtailment 25% Capacity Payment, 20% AnUcipated Curtailment 75% Capacity Payment, No AnUcipated Curtailment 75% Capacity Payment, 20% AnUcipated Curtailment ToD - South- Facing Solar Dispatchable Renewable GeneraUon No Actual Curtailment Current State - No Curtailment Risk 30% Actual Curtailment Current State - 30% Curtailment Risk 32 *EffecEve $/MWh = The all-in price that customers pay for energy delivered, a\er considerauons for fixed and variable costs, and payments for undelivered energy

33 Dispatchable Renewable GeneraEon Model: Key Concepts 33 Intent: To maximize value from future variable genera*on resources by increasing the opera*onal flexibility necessary to op*mize dispatch of the Company system. " Company right to full dispatchability " Move away from reverse chronological seniority restricuons " Benefit from all available grid services

34 QuesEons/Comments?? 34 Mahalo For more information please contact: Greg Shimokawa Energy Contract Manager Renewable Acquisition Hawaiian Electric Company Dora Nakafuji, PhD Director of Renewable Energy Planning Grid Technologies Hawaiian Electric Company 34