Power Plant Flexibility: Increasingly Valuable in a More Challenging Operating Environment

To maintain system stability, power grid operators continuously dispatch a fleet of generation assets to match momentary variations in regional electricity demand. Consequently, power plant flexibility has always been an important operational consideration to ensure the continuous, reliable delivery of electricity.

Even so, this need for power plant flexibility has historically been fairly orderly, following conventional economic logic: The lowest-cost power plants run as much as possible, and, ideally, this means 24/7 for as long as is practicable. As power needs increase, the next most expensive generation asset gets brought into service. As this approach is easy to forecast, power plants have usually operated in dedicated missions—traditionally known as baseload, intermediate, and peaking—that reflect their typical dispatch patterns. However, that method is becoming problematic, as a renewable-power landscape demands flexibility from conventional plants above all else.

Addressing the Duck Curve Problem

With increasing additions of solar and wind energy in recent years, power grids are becoming more dependent on intermittent renewable sources. As this occurs, the predictability of system dispatch patterns for incumbent power generation assets—mainly, fossil fuel plants—inevitably declines, sometimes requiring aggressive modulation by grid operators to maintain system frequency and voltage levels within critical limits. Additionally, because the generation produced by intermittent renewables can fall to negligible amounts quite quickly, the remaining power generation fleet may be asked to significantly increase output in relatively short order.

This phenomenon is illustrated by the duck curve, a phrase that was coined to describe the shape of daily regional electricity load in locations with large amounts of solar energy, such as California. In such places, the peak electricity demand that must be met by the regional fleet of power generation assets is no longer occurring in the afternoon, as has been the case for the many decades since air conditioning was invented. Rather, because of the significant amount of solar energy that is now supplied to the grid in these sunny places, midday demand for fossil generation assets actually falls to a relative minimum. As Greentech Media reports, peak electricity demand in California now often occurs in the evening, as the sun sets and solar energy production wanes. As a result, the remaining fleet of regional power generation assets must rapidly ramp up production from an afternoon lull to pick up the slack.

Although always important, power plant flexibility is becoming absolutely critical to ensure reliable grid operations while accommodating high penetration levels of intermittent renewable energy.

To put it bluntly, power plant flexibility is becoming more valuable.

Flexibility Involves Several Attributes

The term flexibility actually encompasses several different operational attributes for power plants, including:

• Ramping capability, or the rate at which generation output can be changed in a minute. Note that the speed at which a power plant can ramp down its output can often be as valuable as its ability to increase output, as the sudden addition of wind (as a storm moves through) or solar (as a cloud front passes) to a region's grid requires a rapid reduction in supply to compensate.
• Minimum load, which specifies the minimum amount of output above zero that a power plant can operate safely in a continuous fashion. The more that the minimum load level can be reduced—and the costs associated with minimum load operation can be reduced—the more the power generation asset can be economically utilized in various cycling modes.
• Part-load heat rates, representing the fuel efficiency at less-than-ideal load conditions. If a plant can maintain the best efficiencies over a wider operating range, it faces less of an economic penalty when cycling its output—and can thus compete effectively in more prospective dispatch roles.
• Cold-start time, which indicates the number of minutes required to turn a power plant on and ramp it up to at least its lowest turndown levels, so it can be synchronized with the power grid and supply electricity. Obviously, the faster a power plant can start up, the faster it can start serving regional power needs when urgently called upon. This capability is critical to offer to grid operators to maintain system stability in near-emergency conditions.
• Start-up costs, reflecting the cash expenditures (as well as the expected reduction in the plant's remaining lifetime) each time the asset is started from a cold stop. Each time a fossil fuel power plant is required to initiate operation, it experiences considerable wear-and-tear, not to mention the fuel consumption that doesn't contribute to electricity production.

Imperatives for Asset Owners and Operators

Reflecting the increased imperative for power plant flexibility, owners and operators of generation assets should:

• Assess which flexibility attributes are the most valuable. Depending on local characteristics of the transmission and distribution network, which is the base of installed generation and electricity demand patterns, different flexibility attributes will fetch different value in different regions.
• Understand options to enhance flexibility. Increasing flexibility at a power plant is inevitably a site-specific exercise. Opportunities to upgrade flexibility are dictated by a power plant's type, vintage, fuel, and previous history. Limitations posed by the physical site, regulators and communities, environmental restrictions, and the grid operator may also be relevant. Trade-offs might be involved; achieving greater flexibility in one attribute may require a reduction in flexibility in another attribute.

With operational flexibility becoming more valuable every day, owners and operators of generation assets should promptly begin evaluating options to increase power plant flexibility before opportunities pass and threats emerge.