Policy Options for Integrating Renewable Energy into the Grid

The U.S. Federal Energy Regulatory Commission (FERC) is taking a fresh look at regulatory policies to integrate the rapidly increasing number of variable energy resources (VERs) into the nation's power grid in the most efficient and nondiscriminatory manner while maintaining power system reliability.

In January, the FERC issued a Notice of Inquiry seeking public comment on whether to reform any of its rules or procedures as the nation's generation portfolio expands to include more VERs, such as wind, solar or nonstorage hydroelectric generating plants. The growing use of these types of facilities presents unique challenges to the electric power industry, such as location constraints and limited ability to dispatch, but also offers benefits, such as low marginal energy costs and reduced greenhouse gas and other emissions. FERC Chairman Jon Wellinghoff stated:

"We are seeing a rapid expansion in the use of renewable energy technologies around the country that have the potential to reduce greenhouse gas emissions and electricity costs for consumers." "To accommodate that expansion, it is our job to ensure that FERC has in place the market and operational reforms necessary to ensure that all wholesale electricity tariffs are just, reasonable and not unduly discriminatory."

FERC is asking for comments that take a broad look at the issues concerning the integration of variable generation resources and address any effects of VERs on the following subject areas:

o data and reporting requirements, including accurate forecasting tools

o scheduling flexibility and incentives for accurate scheduling of variable energy resources

o forward market structure and reliability commitments

o balancing authority area size and coordination

o suitability of reserve products

o capacity market reforms

o redispatch and curtailment practices.

Comments on the notice, "Integration of Variable Energy Resources," published in the Federal Register on Jan. 27, 2010 (vol. 75, no. 17, pp. 4316-4323), are due April 12, 2010.

Energy experts Bernard S. Lee, retired president of the Institute of Gas Technology, and David E. Gushee, a retired senior specialist with the Congressional Research Service, submitted formal comments, including their most recent CEP article, "Massive Electricity Storage Makes $ense," from Feb. 2010, p. 5. They argue that massive electricity storage (MES) will be required when renewable-source penetration reaches 15-20% to prevent grid instability.

Conceptually, MES can be likened to a huge battery that is connected to the grid and to a wind generator. The battery stores energy when the amount generated exceeds the demand from the grid, and releases stored energy when the demand exceeds the amount generated. The battery allows dispatchable power to be delivered to the grid.

Additional details on this topic can be found in several CEP articles (www.aiche.org/cep) and a white paper by AIChE's Government Relations Committee:

o "Harnessing Natural Energy," by Travis W. Walker, March 2008, pp. S23-S28.

o "Electricity Storage: The Achilles' Heel of Renewable Energy," by Bernard S. Lee and David E. Gushee, March 2008, pp. S29-S32.

o "Renewable Power: Not Yet Ready for Prime Time," by Bernard S. Lee and David E. Gushee, April 2009, pp. 22-25. ()

o "Massive Electricity Storage," an AIChE White Paper, AIChE Government Relations Committee, by Bernard S. Lee and David E. Gushee, June 2008.

In March, U.S. Energy Secretary Steven Chu announced that $100 million in American Recovery and Reinvestment Act funding will be made available to accelerate innovation in green technology, increase America's competitiveness, and create new jobs. Read about that in my blog post "Renewable Electricity Storage Attracts Stimulus Funding."

What's your opinion on these policy options?

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