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APPA Offers A Number Of Recommendations To DOE On Energy Supply Chain Issues

January 24, 2022

by Paul Ciampoli
APPA News Director
January 24, 2022

The American Public Power Association (APPA) and the Large Public Power Council (LPPC) recently provided comments including recommendations to the Department of Energy (DOE) in response to a request for information (RFI) that DOE issued on energy sector supply chain issues.

Among other things, APPA and LPPC said that DOE should utilize a risk-based framework for supply chain security and further recommended that DOE study domestic and international supply of both distribution and bulk electric system transformers and the components needed to manufacture these transformers.

Background

DOE was instructed to issue a report on supply chains for the energy sector industrial base in Executive Order (EO) 14017, “America’s Supply Chains,” issued last February. DOE will use the information gathered from the RFI to compile its report to the White House by February 24, 2022, as directed by the EO.

DOE sought input from stakeholders on “approaches and actions needed to build resilient supply chains for the energy sector,” with a focus on 14 categories.

While most, if not all, of the categories are of at least some relevance to public power and the electric industry as a whole, APPA decided to focus its comments on this subset of categories most directly affecting public power currently: Electric Grid – Transformers and HVDC; Carbon Capture, Storage and Transportation Materials; and Cybersecurity and Digital Components.

Cybersecurity and Digital Components

APPA and LPPC noted that public power utilities “take very seriously their responsibility to maintain a secure and reliable electric grid.”

The electric utility sector has a mandatory and enforceable federal regulatory regime in place for reliability, including cybersecurity. Under this standards regime, utilities are responsible for assessing the cybersecurity of vendors and manufacturers of digital components.

According to the two trade groups, public power utilities have found that not all vendors and manufacturers of digital components feel compelled to respond to utilities as they seek to conduct these vendor assessments.

“Public power utilities believe the responsibility for demonstrating the cybersecurity of their supply chain for all equipment, components, and subcomponents used for critical electric infrastructure should rest with the vendors and manufacturers.”

For this reason, APPA and LPPC recommended that, with regards to the electric utility sector supply chain, DOE should:

Electric Grid – Transformers/HVDC

APPA provided comments on the supply chain constraints affecting distribution transformers to DOE’s Office of Energy Efficiency and Renewable Energy in December 2021 in response to the proposed rule, “Energy Conservation Program: Energy Conservation Standards for Distribution Transformers.”

In those comments, APPA primarily raised concerns with the domestic supply of distribution transformers.

“While APPA and LPPC recognize that the questions in this inquiry are about new large power transformers (LPT) and high voltage direct current technology (HVDC) initiatives, the same supply chain constraints identified in APPA’s earlier comments will impact the successful implementation of any LPT and HVDC initiatives,” the trade groups told DOE.

“As APPA communicated to DOE in its prior comments for both bulk power system and distribution system transformers, the supply chain for steel will significantly impact future transformer production and supply. Moreover, any efficiency standard for transformers will greatly impact transformer supply.”

Of immediate concern to public power utilities is how limitations on distribution transformer supply would play out in response to extreme weather events across the U.S., LPPC and APPA said.

“If an extreme weather event were to disable a significant number of distribution transformers, supply chain constraints could severely limit the availability of replacement devices, jeopardizing utilities’ ability to restore or maintain reliable electric service. Even if distribution transformers are available, supply and demand imbalance may result in significant price increases that would ultimately be borne by electric consumers. Importantly, these same concerns could eventually impact Bulk Power System (BPS) transformers.”

APPA and LPPC are concerned that this current supply shortage may last several years and exacerbate the current slowdown of domestic and international transformer deliveries. The minimum impact of this constraint is a significant increase in transformer prices, they said.

“However, the worst-case scenario could be a rationing of transformers that could slow down local economies and impede new construction and infrastructure investments.”

APPA and LPPC recommended that DOE study domestic and international supply of both distribution and bulk electric system transformers and the components needed to manufacturer these transformers “so that any well-intentioned LPT and HVDC supply chain initiatives do not result in transmission-level transformers competing for the same resources needed to restart the domestic supply chain for distribution transformers.”

More broadly, the electricity sector is dependent on numerous supply components, fuel, and technology for the generation, transmission, distribution, and consumption of electricity, the comments noted.

This would include entities involved with the following:

“A slow down or disruption in any part of this supply system may have an adverse impact on the delivery of safe, reliable, and cost-effective electricity,” APPA and LPPC said. 

Carbon Capture, Storage and Transportation Materials

Meanwhile, the groups noted that a broad portfolio of technologies is needed to achieve deep carbon dioxide (CO2) emissions reductions practically and cost-effectively. Energy efficiency and renewable resources are needed for such emissions reductions, but other technologies and strategies have a major role to play as well.

Carbon capture, utilization, and storage (CCUS) technologies are critical for putting energy systems on a sustainable path, they said.

“Despite the importance of CCUS for achieving the clean energy transition, deployment has been slow to take off — there are only around 20 commercial CCUS operations worldwide. But momentum is building. Plans for more than 30 commercial CCUS facilities have been announced in recent years, and despite the COVID‑19 pandemic, in 2020, governments and industry committed more than $4.5 billion to CCUS.”

APPA and LPPC said that CCUS could play an important role in proposed plans to reduce greenhouse gas (GHG) emissions from the U.S. power sector.

“The trend of increasing penetration of variable renewable power into the energy grid is clear. However, concerns for the rate at which variable renewable sources can be installed and the reliability of the grid caution for the continued need for reliable fossil power. CCUS could enable fossil power to fill this role while limiting CO2 emissions or supporting a clean energy standard.”

APPA and LPPC said that successful use of CCUS to remove significant CO2 from the national inventory requires not only reliable and effective capture technology, but an entire “value chain” of activities.

The key steps in this value chain are CO2 compression, transport, disposition in a safe and ideally useful manner, and analytical and monitoring techniques. The creation and maintenance of a successful supply-chain to support these activities is equally important to CO2 capture for CCUS, the groups told DOE.

CO2 compression will require large compression equipment and large diameter steel pipe. APPA and LPPC recommended that DOE survey the compression equipment manufactures to assess current and future capacity.

They noted that the transport of CO2 via pipelines is the principal means by which CO2 is, and will continue to be, distributed for enhanced oil recovery or deep saline geologic injection.

A significant expansion of the existing pipeline network is projected to be necessary to support CO2 emission reductions, based on an analysis by the National Energy Technology Laboratory, petroleum industry, and Great Plains Institute.

“Further the availably of domestically supplied steel needed to construct pipelines remains an issue not only for the power sector but for other industrial processes and equipment.”

California Utilities Sign MOU To Collaborate On EV Charging Build-out

January 24, 2022

by Peter Maloney
APPA News
January 24, 2022

A group of California public power and investor-owned utilities on Jan. 20 signed a memorandum of understanding (MOU) in support of a California Regional Charging Network.

The MOU encourages cooperation and leadership among the California utilities to build a regional network of electric vehicle charging stations in support of California’s goals to electrify its transportation sector.

The MOU was signed by the Los Angeles Department of Water & Power, Northern California Power Agency, Pacific Gas & Electric, Sacramento Municipal Utility District, San Diego Gas & Electric Company, and Southern California Edison, with other utilities expected to soon join the group.

The MOU calls for the utilities to work together to identify key locations for electric vehicle charging infrastructure in support of regional travel across the state, identify those locations that minimize grid impacts and customer costs, and define charging infrastructure characteristics that lead to more user-friendly car and truck charging.

It specifically identifies the need to support and engage with local and diverse communities along the regional corridors and emphasizes equity and community inclusion, as part of the participating utilities core values.

The MOU also lays out ground rules for the proposed cooperative efforts, but does not call for the creation of any legally binding rights or obligations. The parties to the MOU may consider creating an informal steering committee to foster the principles of the MOU. Each party to the MOU will be responsible for their own costs, and all data shared by the parties will be treated as public record subject. The MOU has a term of three years, unless terminated earlier.

The MOU grew out of the parties’ commitment to California’s zero-emission mobility goals in California Gov. Gavin Newsom’s Executive Order N-79-20 that calls for 100 percent of sales of new cars and drayage trucks to be zero-emission by 2035 and all on-road cars and trucks are to be zero-emissions by 2045.

SRP, Navajo Tribal Utility Authority Extend Solar Agreement, Sign New Solar Contract

January 24, 2022

by Paul Ciampoli
APPA News Director
January 24, 2022

Officials with the Navajo Tribal Utility Authority (NTUA), Arizona’s Salt River Project (SRP), and leaders of the Navajo Nation have agreed to extend an agreement that paved the way for the first-ever, large-scale utility solar farm on the Navajo Nation, the “Kayenta I” facility.

The groups also signed a contract for a new, 200-megawatt (MW) solar resource on the Navajo Nation called “Cameron Solar” that is set to be operational by the end of 2023.

The SRP Board of Directors approved a long-term energy and environmental-attribute agreement through March 2038 from the 27-MW Kayenta I portion of the Kayenta Solar generation facility.

The full facility includes Kayenta I and II and is a 55 MW renewable energy plant that produces green power on the Navajo Nation. The Kayenta facilities help NTUA supplement its power resource mix and maintain some of the lowest consumer electric rates in the region.

Kayenta I first became operational in May 2017 and the duration of the newly expanded agreement for Kayenta I now more closely resembles the long-term duration of the agreement SRP and NTUA have for Kayenta II, which became operational in 2019. The combined Kayenta facilities generate enough energy to power 36,000 Navajo Nation residential homes.

The Jan. 20 ceremony also celebrated the contract signing for Cameron Solar, a 200-MW solar plant resource scheduled to be built and operational on the Navajo Nation by the end of 2023, which contributes to SRP’s goal to add at least 2,025MW of new utility-scale solar to its power system by 2025.

This project supports renewable project development on Navajo Nation and the community’s transition from a coal-dependent economy. The project will infuse roughly $11 million for the land lease as well as an additional $32 million in transmission operations over the next 25 years. The project will also generate approximately $15 million in tax revenues associated with solar and infrastructure, as well as 300-400 local construction jobs that will be 80-90% filled by residents of Navajo descent.

There will also be ongoing scholarship and internship opportunities for Cameron community residents. Any excess proceeds from this development will go back into supporting investment in utility infrastructure and electrification, including the Light Up Navajo initiative, a joint program between NTUA and the American Public Power Association dedicated to the electrification of homes on the Navajo Nation and creation of a better future for local communities.

Light Up Navajo III will start this spring. Interested public power utilities should contact lightup-navajoproject@ntua.com for more information on this important event.

SRP noted that it has been recognized by NTUA as a cornerstone member of the Light up Navajo initiative through its work in securing solar power purchase agreements and providing ongoing support to NTUA in the development of renewable projects.

Through its collaboration with NTUA, SRP has also provided technical support in developing interconnection facilities for large-scale renewable development within the Navajo Nation and has provided procurement and financing expertise related to the construction and ownership of such projects.

Ditto Highlights Public Power Funding Opportunities That Will Flow From Infrastructure Law

January 21, 2022

by Paul Ciampoli
APPA News Director
January 21, 2022

While 2022 could present some challenges for the energy sector, public power utilities are well positioned for success this year and beyond thanks to, among other things, a wide range of funding opportunities that will flow from a new federal infrastructure law, said Joy Ditto, President and CEO of the American Public Power Association (APPA), on Jan. 20.

Ditto made her remarks during the U.S. Energy Association’s (USEA) 18th Annual State of the Energy Industry Forum.

Ditto said that implementation of the new infrastructure law “helps with many elements of grid modernization.” The law will result in a “ton of money flowing to our industry and various elements of it and we’re excited to take advantage of it and help our members take advantage of getting those funding opportunities down on the ground and implementing them.”

APPA members now have access to a webpage dedicated to keeping them up to date on activity and funding opportunities related to implementation of the Infrastructure Investment and Jobs Act.

“We’re supportive of robust funding across the board” in areas like electric vehicle infrastructure, hydrogen energy storage, advanced nuclear energy, and carbon, capture, utilization and storage.

She pointed out that public power utilities are leaders when it comes the development of small modular reactors (SMRs) and other advanced nuclear options.

APPA also appreciates the fact that the infrastructure law takes steps to bolster hydropower, Ditto said, noting that the association continues to believe strongly “that we have to maintain and enhance hydropower as a generating source.”

Moreover, APPA is pleased to see that the infrastructure law includes funding to bolster cybersecurity, not just for the overall power sector, but also for APPA and public power utilities specifically.

In 2022, APPA will continue to help bring electricity to Navajo Nation residents through its Light Up Navajo initiative with the Navajo Tribal Utility Authority (NTUA), Ditto noted.

Light Up Navajo III will start in the spring of this year. “We welcome support for that effort,” Ditto said. [Interested public power utilities should contact lightup-navajoproject@ntua.com for more information on this important event].

One of the challenges that Ditto sees as likely to continue in 2022 involves interdependency issues, which she said was highlighted during Winter Storm Uri in early 2021. Uri hit the Texas power grid and many other states in the middle of the country.

Ditto pointed out that APPA in 2010 published a report, “Implications of Greater Reliance on Natural Gas in the Electric Sector,” which was presented to the USEA that year. “There were challenges we identified back then in that report that we’re seeing come to fruition.”

But pinpointing challenges that could come about doesn’t always translate into being able to successfully meet those challenges without a visible reference “to what the implications could result in and we, unfortunately,” saw that reference play out with Winter Storm Uri, she said.

“I hope that we can utilize that challenge and make it into an opportunity to address these issues inter-sector and intra-sector to see how we can go back and focus on reliability, as well as maintaining affordability.”

Cybersecurity is another challenge that will remain in 2022 and going forward, Ditto said, noting the continued growth in placing digital components on to the grid.

For its part, the public power community is focused on the value of collaboration with the federal government and with others in the electric sector to proactively address cybersecurity threats, Ditto said. Public power utilities will continue to make cybersecurity a priority this year and beyond.

On a day-to-day basis, when it comes to cybersecurity efforts, there is probably a need to think differently as an industry, she said. For public power, “we’re thinking about how we provide collective services to our smaller members.”

Meanwhile, on Capitol Hill, questions remain in 2022 about the fate of President Biden’s Build Back Better legislative proposal.

With respect to the climate change element of the proposal, APPA supports a legislative solution “to addressing climate, but with that three-legged stool of sustainability, affordability and reliability at the forefront at all times,” Ditto said.

“Given the uncertainty of what’s going on in Congress on climate, we’re of course anticipating EPA regulation. We know that there are some court decisions pending that could also impact what EPA does in this space.”

Supply chain issues are coming into sharper focus as a 2022 challenge. The supply chain has been on public power’s radar for quite some time, Ditto said, specifically in the context of how secure supply chains are related to digitization and cyber security.

“Now we’re thinking about supply chain more fundamentally,” she said. For example, what is the availability of distribution transformers.

She praised the move by the Department of Energy to issue a request for information (RFI) on energy sector supply chain issues. APPA and the Large Public Power Council recently submitted joint comments in response to the RFI.

Panelists Detail Benefits Of Hydropower, Recommend Congressional Actions

January 20, 2022

by Paul Ciampoli
APPA News Director
January 21, 2022

Panelists appearing at a recent Senate Energy and Natural Resources Committee hearing detailed the key role that hydropower plays in the nation’s power supply mix and outlined actions that lawmakers could take to support hydropower going forward.

The committee heard from Jennifer Garson, Acting Director for the Water Power Technologies Office (WPTO) in the Department of Energy’s (DOE) Office of Energy Efficiency and Renewable Energy, Camille Touton, Commissioner for the Bureau of Reclamation, Scott Corwin, Executive Director of the Northwest Public Power Association (NWPPA), and Malcolm Woolf, President and CEO of the National Hydropower Association (NHA). NWPPA is a member of the American Public Power Association (APPA).

The majority of committee members at the Jan. 11 hearing, including Chairman Joe Manchin (D-WV) and Ranking Member John Barrasso (R-WY), highlighted the benefits of hydropower.

“Unlike most other renewable energy resources, hydropower generation provides baseload electricity,” Manchin noted in his opening remarks at the hearing. “It’s also flexible which means that the generation capacity is available when we need it, and it has the ability to respond to changing grid conditions and adjust output accordingly.”

That makes hydropower “unique and valuable for maintaining grid reliability as more intermittent resources come online,” he said.

“Given the baseload attributes of hydropower, we need to make sure our existing capacity remains operational,” Manchin said.

He noted that between now and 2030, 281 facilities that represent nearly 14 gigawatts of hydropower generation and pumped storage hydropower capacity are up for Federal Energy Regulatory Commission relicensing, which is close to a third of all U.S. non-federal hydropower capacity.

“Between low hydroelectricity prices and the high capital costs of maintenance and retrofits required for relicensing, there is a real possibility that many of these plants could face closure,” he said.

“The bipartisan infrastructure bill that President Biden signed into law in November made a historic investment in new and existing incentives for new hydropower production, efficiency upgrades, and infrastructure and environmental improvements,” Manchin said.

The bill also included $8.2 billion for western water infrastructure at the Bureau of Reclamation, which included investments in aging infrastructure and hydropower facilities. These resources will help to ensure that we keep vital hydropower capacity online, Manchin pointed out.

For his part, Barrasso noted that until recently, hydropower was the nation’s largest source of renewable energy.

“Hydropower can once again be our largest source of renewable energy if we maintain our existing hydroelectric dams and encourage the installation of turbines on our nation’s non-powered dams,” he said.

“Hydropower’s clearly an important component of an all of the above energy strategy. We should encourage more hydropower generation,” Barrasso said.

Meanwhile, in his prepared testimony for the hearing, Corwin said that while hydropower “is one of our oldest forms of generating electricity it is also a resource for the future because of its unique attributes enabling newer forms of generation. These qualities include a high level of flexibility that matches very well with the increasing need to balance intermittent renewable generation sources such as wind and solar. It lends system stability, reliability, ramping capacity, resilience, and effective integration of other resources.”

Corwin also said in the testimony that it is “efficient in its conversion of energy, uses reliable time-tested technology, and can be relatively low-cost. While extensive use of energy stored in batteries may be in our future, the ability to store the energy of falling water is serving us today and provides the fast response needed on demand. Significant pursuit of development of pumped storage hydropower projects will serve to create even more capacity for meeting peak demand, avoiding reliability events, and balancing other resources.”

NHA’s Woolf pointed out that hydropower “plays an essential yet often-overlooked role in enhancing grid reliability by, for example, providing nearly half of the nation’s black start capability, which is vital in re-starting the grid in the event of a blackout.”

Woolf made several recommendations for Congress to take related to hydropower.

He said that Congress needs to address the hydropower license and relicensing process.

“The uncertainty about the time and cost involved is dramatically at odds with the urgency of addressing climate change and the upcoming wave of hydropower relicensing proceedings,” Woolf said.

Congress should also enact Improvements to promote new renewable generation at existing nonpowered dams, Woolf said.

In 2020, hydropower provided 7.2% of the electricity on the grid, accounting for 37% of U.S. renewable electricity generation, noted Garson.

“With the advent of a greater level of variable renewable generation on the U.S. grid, hydropower’s role is more critical than ever,” she said.

Corwin and Woolf called for federal incentives for hydropower on par with those available to other clean energy resources and stressed the importance of ensuring any such incentives are accessible to public power utilities and rural electric cooperatives.

They thanked Sens. Maria Cantwell (D-WA) and Lisa Murkowski (R-AK) for introducing S. 2306, the Maintaining and Enhancing Hydroelectricity and River Restoration Act of 2021, to create a 30 percent tax credit to support upgrades at existing hydropower dams for dam safety, environmental improvements, and grid resilience enhancements.

They also thanked Senator Ron Wyden (D-OR) for including a narrower version of the tax credit proposed by Senators Cantwell and Murkowski in the latest tax title of the Build Back Better Act, though the legislation is currently stalled.

APPA Submits Statement For the Record

APPA submitted a Statement for the Record to the Committee related to the hearing.

APPA said it supports and agrees with the testimony submitted by Corwin.

“Making full use of the nation’s hydropower resource is key to ensuring that the nation’s grid remains reliable and resilient, and that utilities can meet emission reduction goals,” APPA said.

“Hydropower is a source of emissions-free, base-load power. Furthermore, hydroelectric generators can be started or stopped quickly, which makes them more responsive than most other energy sources for meeting demand for electricity at its “peak” or highest volume,” it said.

APPA noted that there is a significant potential for new hydropower to be generated at non-powered dams throughout the country and to increase output at existing hydropower facilities. “But there are excessive barriers to tapping this potential.”

The Federal Energy Regulatory Commission (FERC) is the primary federal agency responsible for the licensing and relicensing of such non-federal hydroelectric projects, but the process can be lengthy, difficult, costly, and uncertain for applicants, APPA said.

“Critical new additions to existing hydropower facilities are languishing under bureaucratic and often contradictory processes that can span a decade or more or which simply become too costly,” APPA said. The byzantine licensing and permitting processes are also a significant impediment to simply maintaining existing hydropower capacity.”

“We simply cannot afford to lose existing hydropower capacity without threatening to miss emission reduction goals and grid resiliency. Congress must streamline the licensing process by establishing FERC as the lead agency, giving it the authority to set and enforce schedules for the issuance of all resource agency authorizations and studies, and ensure any ‘mandatory conditions’ are directly relevant to the project,” APPA said.

APPA said that another significant obstacle to the growth and retention of non-federal hydropower capacity are insufficient federal tax incentives on par with those available to other clean energy resources.

APPA strongly supports S. 2306, which seeks to address this issue. The bill would create a 30 percent tax credit to support upgrades at existing hydroelectric dams for qualified dam safety, environmental, and grid resilience improvements. “Critically, this credit would be available as a direct payment to public power utilities,” the trade group said.

APPA said it appreciates the efforts of Wyden to include a version of the Cantwell-Murkowski credit in the updated text of the tax title of the Build Back Better Act currently pending in Congress.

Wyden’s draft includes a provision establishing an investment tax credit for five years for “hydropower environmental improvements” at existing hydropower facilities, defined to include investments to improve fish passage, water quality, and habitat maintenance. Importantly, this credit would be available to public power via “direct pay.” Moreover, the draft includes the full value of the production tax credit for building new hydropower at existing dams, marine energy, and other incremental new hydropower, extended for ten years. 

Finally, APPA said that federal hydropower and power marketing administrations (PMAs) are critical, though often overlooked, elements of the nation’s power supply.

APPA supports the continued existence and federal ownership of the PMAs and the sale of federally generated hydropower at cost-based rates.

“APPA strongly opposes any efforts to disproportionately assign costs to federal hydropower users for which they receive no additional benefits,” it said, and urged Congress, the Corps, Reclamation and the PMAs to work closely with customers as the system confronts challenges such as the ongoing megadrought in the West. 

APPA-Funded Study Provides Strategy For Optimal Renewable Power Bids

January 20, 2022

by Peter Maloney
APPA News
January 20, 2022

A new American Public Power Association-funded study has brought small- and medium-size utilities one step closer to confidently offering and purchasing renewable energy products on wholesale power markets.

In many wholesale power markets, utilities with a real time production shortage from cleared day-ahead bids must purchase products in the real-time market to make up the shortage. It’s no surprise, then, that wind and solar resources are not currently eligible to provide ancillary services in many electricity markets: their intermittency and the uncertainty of forecasts surrounding these products leads to expensive shortages for utilities.

This is true in the Southwest Power Pool (SPP), which PhD candidate Anne Stratman has researched as part of her studies in electrical engineering at the University of Nebraska-Lincoln’s Power and Energy Systems Lab. Stratman’s current research focus is refining a model that utility operators with renewable energy resources in their portfolios can use to participate more fully in wholesale power markets. Her recent project, Providing System Reserves with Renewable Resources in the Southwest Power Pool Market, offers a glimpse into a future where renewable-based energy systems can provide system reserves using wind and solar resources. This work was partially funded by the American Public Power Association’s Demonstration of Energy & Efficiency Developments (DEED) program.

As a basis for her research, Stratman pulled from Southwest Power Pool and National Renewable Energy Laboratory databases to gather historical data for day-ahead energy and reserve prices, real-time prices, and wind and solar power production. Data collection centered on a location near Beatrice, NE, an area within Nebraska Public Power District (NPPD)’s service territory. Roman Estrada of NPPD offered a utility perspective to Stratman’s research as her DEED project sponsor.

“Through discussions with my NPPD sponsor, I gained valuable insights into current industry practices and challenges faced by small to medium utilities. These discussions were helpful in bridging the gap between academic theory and industry practice and ensuring the model would be useful to utilities,” said Stratman.

Stratman used Beatrice, NE-area price and production datasets to develop a stochastic optimization model for utilities with wind and solar resources that could calculate curves for bidding into markets for different products: namely, energy, spinning reserves, up regulation, and down regulation. Stochastic optimization was used as a low-cost method to consider many different forecast scenarios, adjust for uncertainty, and formulate an optimal bidding strategy in all possible scenarios.

The resulting model suggested that the best approach for wind and solar resources produced in the region would be to offer, on average, about 5 percent of forecasted power output on the day-ahead market and 95 percent on the real-time market. The average product distribution for wind power, in the day-ahead and real-time markets combined, was 84 percent energy, 0.5 percent spinning reserves, 3.5 percent up regulation, and 12 percent down regulation. For solar power, the average product distribution was 91 percent energy, less than 1 percent spinning reserves, 3 percent up regulation, and 6 percent down regulation, Stratman’s report said.

Additionally, Stratman reviewed case studies and found that by offering several types of products, some with much lower real-time prices than others, a utility would likely be able to avoid real-time penalties by offering less expensive products when forecast uncertainty is high.

“Based on the project results and my dissertation research up to this point, I’ve observed that offering reserve products can allow utilities with highly uncertain generation resources to hedge against the risk of large real-time deviation penalties, compared to only participating in the energy market. Usually, it’s only necessary to offer small quantities of reserve products to reduce risk significantly. However, the tradeoff between profit and the need for reliable reserve commitments should also be considered. Hopefully, this project provides a steppingstone towards greater use of wind and solar resources in reserve markets as forecasting methods improve,” said Stratman.

In the future, Stratman plans to write a conference paper about the model developed in the project that would use a forecasting model to generate prices and wind and solar power scenarios, instead of using historical data as scenarios. There is much less variation in scenarios generated using forecasting models than in scenarios that use historical data, meaning that day-ahead bids would not exceed forecasts, the report said.

DEED members interested in experimenting with Stratman’s model are in luck: as part of her research, she developed a simple MATLAB code and a user guide for use by small and medium utilities with wind and solar resources. This software is applicable for utilities participating in any of the organized independent or regional wholesale markets. The software is available to members of APPA’s R&D community via the DEED Project Library.

Non-DEED members interested in learning more might like to stop by the DEED booth at the American Public Power Association’s Engineering & Operations Conference, where a research poster (and perhaps the researcher herself!) will be available to answer follow-up questions. Additional details about the DEED program are available here.

Energy Storage Could Support Majority Renewable Future: NREL Study

January 20, 2022

by Peter Maloney
APPA News
January 20, 2022

Energy storage, particularly diurnal storage, can play an important role in providing resource adequacy in future scenarios where renewable energy is the dominant form of generation, according to a new report from the National Renewable Energy Laboratory (NREL).

The study, Grid Operational Impacts of Widespread Storage Deployment, is the sixth and latest in NREL’s Storage Futures Study, a series of studies on the role of energy storage in maintaining a resilient and flexible electrical grid through 2050.

Past NREL studies in the series had shown the potential for between 213 gigawatts (GW) and 932 GW of energy storage by 2050 and, even in the most conservative scenario, in excess of 125 GW.

In the new study, NREL used 213 GW as a reference case and the most likely mid-range for energy storage installations. The study also modeled around a scenario in which 74 percent of electric output would be generated by wind and solar power by 2050.

“We really wanted to look at the effects of higher levels of deployment,” Jennie Jorgenson, principal investigator of the study, said.

Starting with its Regional Energy Deployment System (ReEDS) model that shows least-cost scenarios for energy storage under a range of cost and performance assumptions, NREL took the next step by testing that model to see how energy storage would perform under on an hourly basis.

“Overall, we find that the high storage (and often high variable generation) power system scenarios envisioned in ReEDS successfully operate with no unserved energy and low reserve violations, showing no concerns about hourly load balancing through the end of 2050,” the researchers wrote in the study. “Unserved” energy in the report refers to dropped load.

“We once again find that the potential future energy system with large quantities of energy storage could successfully balance load 24/7,” Jorgenson said in a statement. “On top of that,” she said, “we find power systems with high levels of energy storage operate more efficiently by storing otherwise unused renewable energy to displace costly generation from other sources.”

The study found the charging and discharge cycles of energy storage are well aligned with the diurnal cycles of solar power. Wind power, on the other hand, is less well aligned with daily cycles and often experiences periods of overgeneration that can last many hours or days, which is much longer than the storage durations in the study. Energy storage can play a key role in utilizing energy from both solar and wind power, but the synergies with solar power are more consistent, the researchers found.

The study also found that energy storage can increase the efficiency and lower the emissions of a power system by using wind or solar overgeneration to displace coal and natural gas-fired generation.

Energy storage also, more often than not, encourages higher utilization of transmission assets, the researchers found, but cautioned that further study would be needed to understand the interaction of storage and transmission assets.

“Collectively, the results of this and previous Storage Futures Study analysis show the growing opportunity for diurnal storage (that is, storage with up to 12 hours of duration) to play an important role in future power systems,” the researchers wrote.

Greater deployment of diurnal storage can increase efficiency of operations by reducing overgeneration, decreasing generator starts and emissions, and increasing utilization of the transmission system, they said.

Energy storage can also play “an important role in providing capacity during the top net load hours. Future work could examine the role of longer-duration storage resources, especially under highly decarbonized grid conditions, such as those approaching 100% clean energy,” the researchers said.

NREL is planning a free webinar on its new study on Jan. 25. There will also likely be a final synthesis report on NREL’s energy storage series in the next month or so, Jorgenson said.

APPA Members Encouraged To Apply For Sue Kelly Community Service Award

January 19, 2022

by Vanessa Nikolic
APPA News
January 19, 2022

Member utilities of the American Public Power Association (APPA) are encouraged to apply for the Sue Kelly Community Service Award. The deadline for nominations is Jan. 31, 2022. 

APPA’s Sue Kelly Community Service Award recognizes “good neighbor” activities that demonstrate the commitment of the utility and its employees to the community. Any APPA member utility that has not received the award in the past five years is eligible. 

Nominees should have achievement or sustained performance showing commitment by the utility and its employees to enhancing the quality of life in the community through activities that: address a community need or improve the community’s social, cultural, educational, or economic environment; and provide an opportunity for employee involvement.

Award winners are selected by a board committee of APPA. Recipients will be recognized at APPA’s National Conference in June. 

The 2021 Sue Kelly Community Service Award recipients are EPB of Chattanooga, Tennessee, North Carolina public power utility Fayetteville PWC, Wisconsin’s Kaukauna Utilities (KU), Washington State’s Mason County Public Utility District (PUD) 1, and the City of Philippi in West Virginia. 

Not long after the COVID-19 pandemic began, EPB joined a local school district and other community partners to launch a program that provided high-speed fiber optic internet services to every economically disadvantaged K-12 student in the county at no charge. As a result, the program was made available to more than 28,000 students. 

KU and Mason County PUD 1 focused on providing pandemic relief in its communities. KU donated $30,000 to area non-profits that help community members in need with rent or mortgage payments and other expenses. Mason County PUD 1 implemented a COVID-19 response program to safeguard employee health, customer health, and the continuity of utility services for its customers by suspending all disconnections, fees, and rate increases, offering long-term payment plans for any customer that kept in communication with them.

The City of Philippi’s Municipal Electric Department supported its community’s overall economic growth by taking part in various beautification projects like lining its historic downtown’s buildings with lights.

Fayetteville PWC partnered with the city’s downtown district to bring an interactive public art installation to light up the area after the city reopened following the COVID-19 shutdowns. 

“It’s an honor to be recognized by APPA for the activities that we have been committed to for so many years- giving back to our community,” Fayetteville PWC Communications/Community Relations Officer Carolyn Justice-Hinson said. “We have continued to find ways to support our community in powerful ways despite COVID limiting many in-person service projects.” 

Justice-Hinson said Fayetteville PWC encourages its staff to volunteer by looking for community service opportunities that fit its employees’ interests and abilities. The public power utility promotes and organizes many service events such as the ‘Field of Honor’ flag setup and takedown for Veterans Day and a community cleanup coordinated in conjunction with APPA’s Day of Giving.

Additional details about the award are available here. 

Tennessee Valley Authority Solicitation Seeks Swine Renewable Energy Credits

January 18, 2022

by Paul Ciampoli
APPA News Director
January 18, 2022

The Tennessee Valley Authority (TVA) is seeking offers for up to 2,000 swine renewable energy credits (RECs) that meet the North Carolina Renewable Energy and Energy Efficiency Portfolio Standard.

Offers must be submitted through the TVA website by Feb. 15, 2022 and TVA is seeking RECs for Compliance Year 2021.

Swine RECs are associated with electricity generated by swine-waste fueled electric generating facilities properly registered with the state of North Carolina, TVA said.

TVA said it is investing in swine RECs “to support innovative solutions for cleaner energy to promote economic development opportunities in North Carolina.”

It noted that in fiscal year 2021, TVA’s economic development efforts supported record-breaking job creation — nearly 81,000 jobs and more than $8.8 billion in capital investment attracted to its seven-state service region.

Currently, TVA has over 8,000 megawatts of renewable energy in its portfolio.

TVA’s request for offers is posted at www.tva.com/information/doing-business-with-tva.

MEAG Power Formally Joins Southeast Energy Exchange Market

January 18, 2022

by Paul Ciampoli
APPA News Director
January 18, 2022

The Municipal Electric Authority of Georgia (MEAG Power), a nonprofit, statewide generation and transmission organization, has joined the Southeast Energy Exchange Market (SEEM) effective Jan. 13, 2022.

The new SEEM platform will facilitate sub-hourly, bilateral trading, allowing participants to buy and sell power close to the time the energy is consumed, utilizing available unreserved transmission. Participation in SEEM is open to other entities that meet the appropriate requirements.   

Other founding members of SEEM include Associated Electric Cooperative, Dalton Utilities, Dominion Energy South Carolina, Duke Energy Carolinas, Duke Energy Progress, Georgia System Operations Corporation, Georgia Transmission Corporation, LG&E and KU Energy, N.C. Municipal Power Agency No. 1, NCEMC, Oglethorpe Power Corp., PowerSouth, Santee Cooper, Southern Company and TVA.

Santee Cooper, South Carolina’s state-owned electric and water utility, joined SEEM effective Jan. 4, 2022.

The founding members represent nearly 20 entities in parts of 11 states with more than 160,000 megawatts (MW) (summer capacity; winter capacity is nearly 180,000 MW) across two time zones. These companies serve the energy needs of more than 32 million retail customers.