An Electrical Utility Industry in Transition - Centralised, Large Scale, Grid Generation to Micro-Grids?
A webinar was held on 11 December 2013 – Electricity Market Mechanisms for Rewarding Flexibility. The webinar was conducted by the Business Review and sponsored by
The rapid expansion of intermittent renewables are depressing wholesale prices across Europe. Due to this and other reasons, running hours for gas-fired generation are at a historic low. Gas turbines are being mothballed in Europe almost weekly, and utilities are shifting their strategy away from gas. Decision makers seem to agree that more as well as new flexible capacity is needed for integrating renewables, while at the same time utilities are finding it hard to justify keeping even their existing flexible units operational in current electricity markets. Thankfully, there are several potential ways of modifying the market structures to tackle this issue.
With the penetration of wind and PV energy reaching 30-40% in Germany, there is a drop in the demand from centralised grid generation of the same order. This is causing financial pressure for generators to remain viable and technical issues for the continuity of supply of electricity to users.
Regarding financial pressures, a similar pattern is emerging in Queensland. The electricity generation capacity is around 14,000 MW but the most recent peak demand in January 2014 was 8,280 MW.
This is causing financial pressure for generating companies. For example, Stanwell Power Corporation is closing the low-emission, gas-fired Swanbank E power station west of Brisbane for 3 years because it is cheaper to produce electricity from the coal-fired Tarong power station. Brisbane Times, 5 February 2014, Swanbank power station to close for three years.
This is in addition to job cuts that were announced last year due to “unsustainable losses”. Courier Mail, 10 July 2014, Stanwell Corporation to cut around 58 jobs in Queensland as power glut leads to "unsustainable losses”.
It follows huge losses by the Queensland State Government’s electricity-generating companies of almost $ 1.1 billion in the 2010-11 financial year and write-downs of hundreds of millions of dollars.
Courier Mail, 1 October 2011, CS Energy, Stanwell Power and Tarong Energy write down value by combined $ 1.1 billion due to proposed carbon tax.
The effect on consumers has been a seemingly never-ending spiral of price rises for electricity.
Regarding the technical issue of the continuity of supply, the PV and wind energy sources are not controllable sources, sometimes producing too much electricity and sometimes producing too little, causing intermittency.
The issue of intermittency may be addressed using a number of options. One option is using new generation models such as micro grids and distributed generation.
For example, a suburban area network may comprise 3,000 houses. If the average off-peak demand for each house is 1 kW and the peak demand is 1.5 kW, the total average electrical demand is 3 MW (off-peak) and 4.5 MW (peak).
Assuming the penetration of PV is 30%, the PV nominal capacity is 1 MW. Therefore, if the area was operating as a “micro grid” it would import a nominal power from the grid as follows:
- Day time, off peak, nominal PV generation: - 2 MW
- Day time, peak, no PV generation: - 4.5 MW
- Night time, off-peak: - 2 MW
A number of solutions can be identified on how to support the grid and maintain operation of the micro grid. For example, one solution may be to provide generation capacity within the micro grid. A nominal capacity of 2.5 MW would limit the load on the grid to 2 MW and eliminate peak loading.
BESST is able to provide scalable, benchmark solutions for the design and development of the electrical power and control systems required for the micro-grid. This includes concept design, FEED studies, detailed design and commissioning.