New Fuel for Reinventing Fire: NREL’s Renewable Electricity Future Study

We often hear statistics about the abundant sources of renewable energy that could power our lives and our world.

• More energy hits the earth from the sun in one hour that the whole world uses all year.
• Windy sites on available land in the U.S. could generate almost 10 times as much electricity as the country consumes today.
• A 90×90 square mile area in the Southwest U.S., if covered with solar panels or solar concentrating plants, could produce all the electricity the U.S. needs annually.

The list goes on. Indeed, the U.S. is blessed with abundant and geographically dispersed wind, biomass, water, sun, and natural steam. But the availability of renewable energy has never been the biggest barrier to cleaning up our energy act. Some of the more hairy challenges have been: can renewables be harnessed cost-effectively, delivered reliably, and integrated feasibly into grid operations?

In Reinventing Fire, we delved into these questions with rigorous analysis supported by modeling tools that simulate the operational and planning realities of our electricity system. In examining our Renew and Transform future scenarios (see numbers 3 and 4 in image above) that each rely on 80 percent renewable generation, we found that these challenges are indeed very real, but not insurmountable. These issues are being tackled today in control rooms, boardrooms, and labs around the world, and success stories are emerging. Just a few weeks ago, Germany set a world record when over half of the electricity generated came from solar energy.

The Renewable Electricity Futures Study

Now, a new study just released by the National Renewable Energy Lab (NREL) provides more fuel to support our nation’s ability to reinvent fire. The Renewable Electricity Futures Study (RE Futures) is a collaboration of over 100 contributors from 35 organizations including national laboratories, industry and universities, and non-governmental organizations, and is the most comprehensive analysis of U.S. high-penetration renewable electricity conducted to date.

RE Futures focused on key technical challenges of high penetrations of renewable energy, especially those associated with higher levels of variable generation from wind or solar photovoltaics (PV). Electricity providers and grid operators can find wind and solar generation unnerving due to their variability and uncertainty. That is, solar and wind power output fluctuates throughout the day and cannot be predicted with complete accuracy. Because our electricity system has relied on large, controllable power plants for more than a half-century, many believe that renewables can never reliably supply more than a few percent of grid power.

Similar to Reinventing Fire, the study undertook extensive modeling to assess whether the U.S. power system can supply electricity to meet customer demand on an hourly basis with high levels of renewable generation. Exploring scenarios between 30 percent and 90 percent of all U.S. electricity generation from renewable technologies in 2050, the study finds:

Renewable electricity generation from technologies that are commercially available today, in combination with a portfolio of flexible electric system supply- and demand-side options, is more than adequate to supply 80 percent of total U.S. electricity generation in 2050 while meeting electricity demand on an hourly basis in every region of the United States.

What Would it Require to Operate?

To manage daily fluctuations from solar and wind generation, we would need new sources of grid flexibility from a variety of sources:

Increased electric system flexibility, needed to enable electricity supply-demand balance with high levels of renewable generation, can come from a portfolio of supply- and demand-side options, including flexible conventional generation, grid storage, new transmission, more responsive loads, and changes in power system operations.

What About Cost?

The RE Futures study estimates that the 80 percent future in estimate that the incremental cost would result in average annual retail electricity price increases of 0.8 percent–1.2 percent per year (2011–2050, in real dollar terms), compared to a rate of 0.3 percent per year in the baseline scenario:

Improvement in the cost and performance of renewable technologies is the most impactful lever for reducing this incremental cost.

There’s significant reason to believe that these costs improvements will not only occur but could accelerate. The solar PV industry offers one of the most compelling examples of ongoing cost reduction. For example, since the 1970s, every 10-fold increase in production of crystalline silicon modules has made module production 50 percent cheaper. In fact, the cost assumptions used in study estimates were based on data available in late 2009 or early 2010, and some technologies, such as PV have already shown significant cost declines that go beyond those estimates.

Can We Get There From Here?

Although RE Futures describes the system characteristics needed to accommodate high levels of renewable generation, it does not address the institutional, market, and regulatory changes that may be needed to facilitate such a transformation.

While this analysis suggests such a high renewable generation future is possible, a transformation of the electricity system would need to occur to make this future a reality. This transformation, involving every element of the grid, from system planning through operation, would need to ensure adequate planning and operating reserves, increased flexibility of the electric system, and expanded multi-state transmission infrastructure, and would likely rely on the development and adoption of technology advances, new operating procedures, and evolved business models, market rules, and regulatory regimes.

RMI, along with many other industry experts and stakeholders, agree that these institutional challenges are among some of the biggest barriers—and ultimate opportunities—to enable the transition to a high renewable, efficient future. RMI’s focus in the electricity sector is to tackle these tough issues and will be dedicating significant resource to achieve traction. As part of this work, RMI is launching the Electricity Innovation Lab (eLab) next week in San Diego. eLab will be a multi-year working group of thought leaders and decision makers from around the electricity sector who will come together to develop innovative but practical solutions to the biggest challenges facing the sector.

Follow the launch event on our blog (blog.rmi.org), or on Twitter using #elab.