Storage and demand-side options for integrating wind power

Transcription

1 Storage and demand-side options for integrating wind power Aidan Tuohy, Ben Kaun and Robert Entriken With the increased levels of wind power being seen worldwide and the projected further increases over the coming decades, there has been significant attention paid to emerging flexible resources such as storage and demand-side options as a means to meet many of the challenges associated with wind integration. In particular, these resources could meet the increased flexibility requirements of systems with high wind due to variability and uncertainty of wind across timescales from seconds to minutes to hours or even days. Storage and demand-side options are both characterized by the ability to respond quickly and accurately, to increase load as well as to provide generation resources and by the fact that they are energy limited in nature. Demand response can contribute to wind integration in different ways, using either price- or incentive-based programs; the extent to which they can be used to integrate wind depends on the nature of the program. Electricity storage comes in many forms, with pumped hydro storage presently accounting for almost all grid storage, along with recent advances in battery and compressed air energy storage. The ability of storage to contribute to integrating wind power is limited mainly by the cost of deployment and the efficiency losses. While these features may not be as significant for demand response, there are significant regulatory and policy barriers in the way of deploying demand-side options. Both storage and demand-side resources provide support for wind integration in particular regarding provision of ancillary services and reduction of wind curtailment. C 2013 John Wiley & Sons, Ltd. Howtocitethisarticle: WIREs Energy Environ 2014, 3: doi: /wene.92 INTRODUCTION In recent years, wind penetration has increased on many power systems. The observed variability and uncertainty of wind power has highlighted the need for flexible resources as a means to integrate increased levels of wind power. 1, 2 Two flexible resources that are often identified as being compatible with wind power are energy storage 3 and demand-side options, often known as demand response (DR). Both of these resource types have been identified as an effective means to integrate wind power; however, the experience in doing so remains limited. Both are seen as Correspondence to: atuohy@epri.com The authors have declared no conflicts of interest in relation to this article. Electric Power Research Institute, Palo Alto, CA, USA DOI: /wene.92 valuable due to their flexible characteristics; 4 both can normally respond relatively quickly, can increase or decrease the load, and in the cases of battery storage and DR are modular and can be located usefully across the grid. However, storage and DR are still not widely deployed on the power system (with the exception of pumped hydro storage 5 ) and require further consideration of their value to the power system to enable them to be deployed more widely. This paper first describes the relevant technologies and possible wind integration issues that could be mitigated with DR or storage. The important characteristics of storage and DR and some of the more general studies in the area are then described, followed by an examination of current research in the area of storage and demand-side options to meet different challenges related to wind generation. Finally, gaps in existing research and future possibilities for research in the area are identified. Volume 3, January/February John Wiley & Sons, Ltd. 93

2 wires.wiley.com/wene FIGURE 1 technologies. Worldwide installed capacity of different storage STORAGE AND DEMAND-SIDE OPTIONS FOR INTEGRATING WIND POWER: OVERVIEW OF TECHNOLOGIES Both electrical energy storage and demand-side options are not new to power systems. Direct load control and time-of-use pricing have been used for decades, 6 and similarly large stationary storage such as pumped hydro storage has been in use for over 100 years. 7 On the other hand, new technologies such as battery energy storage, 8 plug-in electric vehicles and smart meters [such as advanced metering infrastructure (AMI)] 9 are relatively recent and are expected to increase in significance in the coming decades. Electricity Storage Options In this discussion, electricity storage is the only form of storage examined; this implies the use of electricity to charge a form of storage (hydro reservoir, battery, etc.), which is then used to generate electricity later. 8 Other types of storage, such as gas storage, hydrogen storage, and large hydro dams without pump back facilities are not considered; small-scale thermal storage and electric vehicles are considered indirectly as DR in this paper, because they are primarily loads with other purposes, with grid services providing a secondary function. There is presently approximately 140 GW of electrical energy storage worldwide, predominantly pumped hydro storage as shown in Figure 1. Pumped Hydro Storage This is by far the most mature of the main storage technologies, with over 99% of electrical energy storage installed worldwide being pumped hydro. 5 This technology operates by pumping water into a high reservoir when demand and prices are low and then generating when demand and prices are high; in the case of systems without clearing energy markets, this would be done to reduce marginal costs by reducing the use of peaker units with low utilization and high marginal cost. Pumped storage is a large-scale (e.g., Bath County in the United States has an installed capacity of 2772 MW 10 ), high-energy resource (many hours of storage), making it particularly suitable to provide energy arbitrage, load following and ancillary services. In much of the developed world, pumped storage is already mature in some countries, few sites remain that could be used in this manner, unless sites previously deemed unsuitable become more valuable due to an increased demand for pumped storage; 7 other areas may have the potential for relatively inexpensive pumped hydro pumped storage round trip efficiencies of up to 80% have been achieved. 8 Conventional pumps and turbines are used for the pump and generator, and these can be variable or fixed speed; often a reversible pump is used, meaning the same (or approximately the same) sized pump and generator. Certain existing hydropower facilities could be converted into pumped storage through the addition of pumps. Compressed Air Energy Storage This technology uses the potential energy of compressed air to drive turbines. Air is pumped into a suitable underground cavern (e.g., salt cavern, depleted gas field) or manmade structure (above or below ground). To extract the stored energy, compressed air is heated, expanded, and directed through a high-pressure turbine that captures some of the energy in the compressed air. The air is then mixed with fuel and combusted, with the exhaust expanded through a low-pressure gas turbine. The turbines are connected to an electrical generator. 8 This type of CAES utilizes a gas turbine; essentially the expanded air is mixed with gas to produce a highly efficient gas turbine. There are currently two facilities of this type in the world, in Huntorf, Germany (290 MW, built in 1978) and Alabama, United States (110 MW, built in 1991); 11 there are plans to build more, which are purported to be more efficient. 12 Many possible CAES plant locations are in areas with high wind potential (e.g., the U.S. Midwest). 12 Research is also being done on adiabatic CAES, which would not need additional energy input from natural gas, thus becoming a pure storage unit. CAES has similar characteristics to pumped storage in terms of what it offers the grid. It also has the advantage of a separate compressor and generator, allowing both to be sized independently 13 and optimized for the circumstances John Wiley & Sons, Ltd. Volume 3, January/February 2014

3 WIREs Energy and Environment Demand side and storage options for integrating wind power Battery Storage Battery storage encompasses many different technologies, mostly differentiated by chemical properties. These include lead-acid, lithium-ion, sodium sulfur, and sodium nickel chloride. 7 These technologies vary in terms of energy density, cost, efficiency, and lifetime, but their main use is providing power for power quality applications, short-term fluctuation reduction, and some ancillary services or transmission deferral. Some have higher energy density and can therefore also act over the longer range timescale. Another type of battery, the flow battery, 14 uses a liquid electrolyte pumped from reservoir to reservoir. There are several different chemistries under investigation, including vanadium redox, zinc-halogen, and iron-chrome zinc-bromine. These have higher energy storage capacity and are therefore more suited to time shifting or arbitrage, whereas still offering the benefits of other batteries in terms of very quick response. While there has not been widespread grid deployment to date of battery technology, significant research and development is underway to improve all battery technologies in terms of cost, efficiency, and lifetime. 8 Certain technologies, particularly lithium-ion, are decreasing in cost due to manufacturing scale in other industries, including consumer electronics and electric transportation. Flywheel Flywheels store energy in a rotating mass; they typically have short discharge times, but can ramp up very quickly, making them useful for short-duration ancillary services such as frequency regulation, and for balancing supply and demand in the seconds-to-minutes time frame. They are commonly used in wind-diesel systems and have been proposed to be used to better integrate wind and solar photovoltaic generation in distribution networks. 15 There are currently several flywheels in operation or an advanced planning stage (e.g., 20 MW flywheel system in the New York Independent System Operator footprint 16 ), generally in areas where frequency or short-term markets are of high value. 8 They are not suitable for longer term needs such as management of variability and uncertainty over longer (greater than 10 min) time frames, due to the inherent energy-to-power ratio of the technology. Large-Scale Thermal Storage Large-scale thermal storage has found significant application in solar thermal energy systems. 17 The working fluid is molten salt or oil, and the thermal heat can be used for electricity generation, via a steam cycle or for space heating. These systems are particularly adapted to electricity generation, because they provide a natural smoothing effect from the thermal capacity of the fluid and because the adding storage of this type has a relatively low cost, when the existing plant is already economic. The storage is usually sized to capture a quantity of thermal energy sufficient to shift production into the evening, when significant load occurs during the overlapping events of businesses closing and people arriving home. Demand-Side Options Demand-side options do not come from a single technology; instead they are a collection of technologies capable of altering end-user electricity demand (whether residential, commercial, or industrial) in response to a signal or incentive. They can take the form of a particular technology performing a defined function (e.g., air conditioners available for direct utility control) or can take the form of price programs or customer aggregators who bid into markets or provide system operators certain defined functionality. The Federal Regulatory Energy Commission (FERC) in the United States defines DR as consumer actions that can change any part of the load profile of a utility or region, not just the period of peak usage. 18 Figure 2 shows the breakdown of different DR types, as defined by North American Electric Reliability Corporation (NERC) and the North American Energy Standards Board (NAESB). For the purposes of wind integration, energy efficiency will not be considered as it is a passive form of energy reduction, which cannot contribute to the need for integrating wind generation. For the DR segment of demand-side options, demand can either be incentive based, as in dispatchable resources, or based on customer choice and control; either type can be used to provide system reliability. 19 Some of the technologies and DR functions are well understood, such as direct load control of air conditioning or water heaters 20 to provide contingency reserve, as well as many different types of industrial interruptible load programs. This could include aluminum smelters, oil extraction, as well as many other industrial manufacturing loads with flexibility (cement, paper, refining, etc.). DR and demand-side management programs have typically provided a range of services to the electric system, such as peak load reduction programs, 21 resource/capacity provision, direct load control for ancillary services, and transmission or distribution deferral. In recent years, with deployment of the smart grid and its related emphasis on control and communications enabling more participation of demandside in the various system reliability and economic Volume 3, January/February John Wiley & Sons, Ltd. 95

4 wires.wiley.com/wene FIGURE 2 NERC and NAESB categorization of demand-side options. This image from the North American Electric Reliability Corporation s Web site is the property of the North American Electric Reliability Corporation and is available at This content may not be reproduced in whole or any part without the prior express written permission of the North American Electric Reliability Corporation. FIGURE 3 DR in the United States. This image from the North American Electric Reliability Corporation s website is the property of the North American Electric Reliability Corporation and is available at This content may not be reproduced in whole or any part without the prior express written permission of the North American Electric Reliability Corporation. functions, DR has increased in significance. Some technologies that until recently have had relatively niche applications are expected to be more widely deployed and available for aiding wind integration; these include electric vehicles and thermal energy storage (both residential/commercial and industrial). These can be used to shift energy in response to a price signal or other incentive from a system operator. DR is projected to increase further in the next decade, with some areas, such as the PJM system in the United States expecting significant portions of capacity being met by DR. 9 One of the main factors influencing an increased emphasis on DR is the growth of renewables; the increased system variability and uncertainty is seen as a potentially significant value stream for demand-side resources. In the United States, FERC produces an annual report looking at the amount of DR available through advanced metering. 9 This showed that the penetration of advanced meters currently at 13% of all meters is continuing to increase, which could enable DR to supply many of the required wind integration functions. That report discusses how AMI can enable DR, due to the measurement capabilities of AMI; in addition, some AMI infrastructure will allow for limitation of demand in response to system signals which would enable a coordinated dispatchable-type response. In the European Union, one 2008 study has shown a potential of GW of DR available by (current peak demand is approximately 400 GW), depending on various policy objectives relating to emissions reduction and energy efficiency; the high number John Wiley & Sons, Ltd. Volume 3, January/February 2014

5 WIREs Energy and Environment Demand side and storage options for integrating wind power represents a situation with 100% penetration of smart meter technology. These findings are based on a mix of energy efficiency programs to reduce demand and DR programs to clip peak demand and shift energy; the capacity based on the latter DR programs could be used for integration of wind power; the size of these programs is not explicitly pointed out, but is less than 72 GW. For the United States, Figure 3 shows the growth of DR over the past few years as recorded by NERC 23 : as a comparison, peak demand in the United States was approximately 760 GW in Here, load as a capacity resource refers to prespecified load reductions during system contingency, contractually interruptible is where load is subject to interruption under a contract, and direct load control is where a sponsor can remotely shut down or cycle loads. WIND GENERATION INTEGRATION ISSUES RELATED TO DR AND STORAGE Numerous grid services, become increasingly important with high penetrations of wind. Many of these could be addressed using storage or demand-side technologies. 1, 2, 24 These impacts are covered in more detail in other parts of this issue. From a high-level perspective, the following are the main impacts that can be managed through storage or demand-side options: Increased requirements for regulating reserve, load following and balancing energy due to short-term variability of wind power, Unit commitment and day ahead scheduling with increased variability and uncertainty making decisions on commitment more difficult, Resource/system adequacy issues relating to low capacity value of wind energy, System stability impacts of increasing wind, due to the nonsynchronous distributed nature of wind production, and Increased transmission requirements due to location of wind resources and possible underutilization of transmission due to low capacity factor of wind compared to base load units. Identifying Storage and Demand-Side Options to Integrate Wind Power Over the past decade, there has been significant experience in planning and operating power systems with large amounts of wind power. Additionally, many organizations have carried out studies looking at these new flexible resources, in an attempt to characterize the resource, identify cost benefits of the resources, and guide regulatory and policy decisions. 25, 26 This section first examines the relevant characteristics of emerging flexible resources, before describing general experience and some of the larger scoping studies related to wind integration and emerging flexible resources. Important Characteristics of Energy Storage and Demand-Side Options Related to Wind Integration There are a number of important characteristics that differentiate emerging flexible resources from existing resources. Some of these mean that they can more efficiently integrate wind, whereas others limit the amount they can be operated. Among the most important are Limited energy resource: Both storage and many demand-side measures will have inherent energy limitations; unlike, for example, a combustion turbine, they are not able to continually operate at rated capacity. The limit for how long they can operate will vary significantly depending on the type of resource; pumped hydro storage can usually operate at rated capacity for many hours, 5 whereas certain demand-side measures can only reduce or increase load for a short period of time, for example, air conditioner load will generally not be curtailable for more than 1 2h. 20 The uncertainty of wind power will also mean these resources may not be optimally planned in the day ahead time frame, and thus their energy limited nature may become more constraining as it will not be clear exactly when they are needed. It should be noted that some demand-side options may not be energy limited, and others could possibly be linked together to get a longer, but smaller, response through aggregation. Combined load and generation resource: From the perspective of power system operations, both storage and certain demandside options can be treated as both a generator and a load. This implies that they can be used to meet demand (even though in reality incentive-based demand-side resources will reduce demand, they have behavior similar to a generator) or can be used to increase Volume 3, January/February John Wiley & Sons, Ltd. 97

6 wires.wiley.com/wene FIGURE 4 Power draw from a 3 kw water heater and associated AGC signal. (Reproduced with permission from Ref 27. Copyright 2011, Electric Power Research Institute.) demand. This can aid wind integration by being able to better shape net load than either a generator or load alone. Improved performance versus other resources in certain capabilities: Both storage (in particular newer battery-based technologies and flywheels) and certain demand-side options offer extremely fast acting and accurate response to central signals. It has been shown that both can follow an Automatic Generation Control (AGC) signal better than conventional plant; Figure 4 shows how accurately an electric water heater can follow an AGC signal based on field testing. 27 This has led to new market rule developments in the United States, 28 where storage and demand-side resources are expected to be paid a premium for frequency regulation service. As wind is expected to increase the need for regulating reserve, this characteristic can allow more efficient and reliable integration. Modular, small-sized resources: Aside from bulk energy storage technologies like pumped hydro and CAES, energy storage systems using batteries may have more locational flexibility than conventional generator resources. 8 As a result, they could be sited nearer to load pockets or even on the distribution system. Additionally, the ability to transport storage as the situation requires could provide value by enabling a single energy storage asset to provide multiple distinct location-specific solutions in its lifetime. Similarly, demand-side-options are modular in that the number of customers can be increased quickly, without the need for large, long-lead-time capital investment, and the usage of the demand-side resources can vary from one year to the next. This provides option value and time value of money compared to building new conventional resources, which tend to be larger installed capacities. Frequency and duration of DR: These are two related characteristics that are important in relation to DR. The frequency of the DR is how often it can be called upon. For example, some customers may not want to respond every hour to signals reducing heating load or may not be able to provide regulation services from electric vehicles every night. This frequency needs to be better understood as deployment of DR increases. Current and Future Role of Emerging Flexible Resources in Integrating Wind Power Electrical energy storage and demand-side options can both be used to integrate higher levels of wind power or integrate existing levels of wind power in a more efficient and reliable manner. The level at which these resources will actually be deployed depends on both the value they provide and the relative cost compared to other options. 29 In areas with high wind penetration, existing storage and DR programs have been well utilized. In Portugal, the daily operational strategy of wind and reversible hydro power plants is optimized to minimize deviations with respect to forecasts and to allow wind participate in structured markets and provide various reserve products MW of reversible hydro power plants are now used specifically to support wind through short-term energy balancing, reduction in curtailment and provision shifting of energy from off peak to peak times, with a further 600 MW in deployment and/or upgrades in the coming years. Another example of flexible resources being used to support wind integration is in Texas, where the Electric Reliability Council of Texas (ERCOT) Load acting as a Resource program has been used to manage large wind ramps in the past 5 or more years. 31 There are ongoing efforts within industry to identify the size of the resource and how much may be possible. A recent Lawrence Berkeley National Laboratory report 26 identified a number of wind integration applications using DR resources, in particular mass market DR enabled thorough AMI. The authors concluded that managing the increased net load variability over 1 12 h is particularly suitable for John Wiley & Sons, Ltd. Volume 3, January/February 2014

7 WIREs Energy and Environment Demand side and storage options for integrating wind power DR. It was concluded in the report through a review of the literature that real-time pricing offers the most potential of price-based programs; 32 however, this is an area of DR with very little regulatory or stakeholder support. Other pricing programs are more widely supported, such as critical peak pricing; 21 these may not be as useful for integrating wind power, as they often have specific event duration and require advanced notification, thus only being useful in managing events forecasted day ahead. 25 For incentive-based programs, 20 the report identified a significant potential if customers sign up for providing response during the short duration and frequent ramping events which wind power will contribute to. This will require acceptance of load aggregation as a means to utilize DR and the associated control and automation technology to provide a large amount of the wind integration requirements. In particular, direct load control is already used 31 for many of the wind integration related services, and in the future the ability of aggregators to participate in energy and ancillary services markets will allow demand-side options greater ability to aid wind integration. 20 The National Renewable Energy Laboratory s report on energy storage and its role related to renewable generation introduces many of the key aspects of how storage can be used to integrate wind. 3 This report examines the roles of electrical energy storage in the existing grid and identifies the many functions currently performed by storage, 15 as well as how energy storage could be used to integrate variable generation. The report points out that storage is generally not found to be cost justifiable in integrating wind in many of the existing wind integration studies. However, its characteristics as a flexible resource will provide increased value as the penetration of wind power increases. In particular, the ability of storage to increase system minimum load levels by charging during off-peak hours is identified as a key enabler of wind integration due to its ability to reduce curtailment; as shown later, this is a key finding of many studies. Using the concept of a flexibility curve, as shown in Figure 5, the relative order of storage as a resource to provide flexibility to integrate wind is identified. Storage is identified as one of the more expensive options to provide system flexibility. Other methods to obtain increased system flexibility (or reduced the need for flexibility) are quicker markets, improved forecasts, and usage of forecasts, more flexible conventional generation (i.e., lower minimum load), active power control of wind power, demandside options, etc. Note this figure is conceptual only and is subject to characteristics of a particular system, the storage technology used, the penetration of variable generation, etc. FIGURE 5 Flexibility supply curve showing cost and increasing requirement with increased variable generation. (Reproduced with permission from Ref 3. Copyright 2010, National Renewable Energy Laboratory.) Another key United States based study is the NERC Integration of Variable Generation Task Force report on Potential Reliability Impacts of Emerging Flexible Resources. 25 This looks at both storage and demand-side options and identifies how they may be used to integrate variable generation from a reliability perspective, that is not considering cost in detail. Ten specific characteristics related to wind integration, from inertia and primary frequency response to response to large wind ramps and day ahead scheduling, were described. Through existing experience and literature survey, the ability of storage and DR to contribute to these factors was identified. The findings are summarized in Table 1; the report provides detail as to how these findings were reached. As can be seen, the ability of DR will vary by technology, with the first two columns being specific industrial processes; aluminum smelting, which is a large intermittent load, could provide response in the event of contingencies but not contribute to load following or large ramps. Similarly, residential air conditioning may be able to contribute to a large number of flexibility requirements, but excludes voltage support and inertia. It can also be seen that storage, except for flywheel technology, has the ability to contribute to all of the different functions, which enable reliable wind integration. Most of the benefits are expected to be seen in the reserve categories, with a moderate contribution to load following and dispatchable energy. MODELING THE BENEFITS OF STORAGE AND DEMAND-SIDE OPTIONS TO FACILITATE WIND INTEGRATION As wind penetration increases worldwide, more attention is being paid 13, 15 to the new possibilities this Volume 3, January/February John Wiley & Sons, Ltd. 99

8 wires.wiley.com/wene TABLE 1 Provision of System Services from Storage and Demand-Side Options as Identified by NERC s Integration of Variable Generation Task Force. Shale Residential Commercial Plug-in Potential Aluminum Oil Air Air Pump. Solid Flow Electric Aggregate System Service Smelter Extract Conditioners Conditioners Industrial Hydro CAES Batteries Batteries Flywheels Vehicle Benefit Inertial response T A E T T E T Low Primary frequency response T T A A E T T E T Low Regulation (AGC) E T A E E T A E Moderate Load following/ramping T T T A E T T T Moderate Dispatchable energy T A A A E E T T Moderate Spinning reserve A T T T A A E E T T Significant Nonspinning reserve A T T T A A E T T T Significant Supplemental reserve T T T A A E T T T Significant Variable generation tail event reserve T A A A A E T T T Significant Voltage support A E T T T T Low This table from the North American Electric Reliability Corporation s website is the property of the North American Electric Reliability Corporation and is available at This content may not be reproduced in whole or any part without the prior express written permission of the North American Electric Reliability Corporation. Reliability capability designations: A, available commercially; E, emerging capability in demonstration phase; T, technically feasible, but not currently being pursued. offers energy storage and demand-side options; these emerging flexible resources offer many of the characteristics desired for efficient and reliable integration of large amounts of wind power, as described in the preceding section. This section builds on the preceding section to outline findings from some of the key research papers and reports in the field of valuing energy storage and DR for wind power integration. Studies have examined the range of different wind integration issues identified above which can be met with storage or demand-side options. Some have tried to capture a large range of values, 13, whereas others have focused on single topics. As both types of studies can provide insight, this section breaks the wind integration challenges down into topics and described research currently being done in the area. In general, research in this area is concerned with modeling system, local or wind farm specific benefits of the flexible resource, by simulating system operation or combined wind/storage/dr output over a particular time period at a suitable time resolution, and then examining costs, benefits, revenues, reliability improvement or a combination of these. Energy Shifting and Arbitrage to Accommodate Wind Power Variability and Uncertainty Over a Few Hours to a Few Days As wind output is variable and only partially controllable, storage or DR can be used to charge/increase demand when wind is high and discharge/reduce demand when wind is low Some studies have based the storage or demand dispatch on managing wind generation in this way. 38 Here, storage or demandside options are used together with wind power to provide firm power from wind (i.e., dispatchable 39, 40 power). The papers referenced here generally used wind output (either actual or forecasted) together with an algorithm to maximize revenue for the wind plant, reduce wind curtailment, or smooth output from wind plants, regardless of system or market conditions. Often the stochastic nature of wind power is accounted for through a stochastic optimization. 37 In general, this has proven too costly; for example, a case study in ERCOT with CAES smoothing output of a wind farm and shifting wind to more profitable periods is only justifiable if the expander is unreasonably large (24 GW in this case). 41 This approach of directly coupling storage operation with wind power output is unlikely to ever prove as useful as using storage or DR as a system resource to manage the increased variability and uncertainty of system net load due to wind, John Wiley & Sons, Ltd. Volume 3, January/February 2014

9 WIREs Energy and Environment Demand side and storage options for integrating wind power FIGURE 6 Usage of emerging flexible resources to shift, curtail or increase load across the day. as the use of storage is not fully optimized compared to all options. However, in some cases, particularly island systems as discussed later, there may be reason to directly couple wind output to reduce ramp rates if required by a system operator. From a modeling perspective, many of these studies assume a price taker approach from storage this assumes that the addition of storage to the system does not alter prices significantly; this is likely true for many systems at low penetrations of storage but could be invalid if looking at significant congestion costs (which storage may reduce) or high penetrations of storage, where the storage is likely to impact prices. Other studies look instead at systemwide impacts of wind power and attempt to examine the benefits of emerging resources to meet increased net load variability due to wind power. Most of these therefore model the system with and without storage, thus capturing the impact storage has on generator operation, reserve deployment, prices, etc. From a power system, total costs perspective (whether total societal costs or market prices which should be generally reflective of marginal production costs), these flexible resources can be used to shift demand from a period of low costs to a period of 35, high costs. Figure 6 shows how storage or DR can be used to shift, reduce, or increase demand. As net demand becomes more variable with high penetrations of wind, this ability is likely to become more valuable. 43 The main value of flexible resources when considering hour-to-hour operation of the system with increased will be the ability to reduce costs due to cycling of conventional plant 46 and improve system efficiency of the other plants; sometimes this also leads to a reduction in wind curtailment as other plant can be operated at minimum load less often. 43 Studies examining this time-shifting function, also called energy arbitrage, with increased levels of wind have focused on the likelihood of endogenous investment in storage compared to other types of generator. 44, 45, 47 These studies vary in their approach, particularly around representation of wind power as stochastic or deterministic inputs, and the usage of detailed unit commitment and economic dispatch algorithms or simpler representative dispatches. By performing simulations of how storage operates in the context of high wind, the value of storage can be examined by looking at profits or total system costs when storage is included as an option; the value of storage and thus its likelihood to be built is shown. An examination of the U.S. system 4 found that storage can lead to more installed wind power capacity, once there is enough wind power capacity on the grid to make its flexibility sufficiently valuable. This paper used deterministic assumptions on wind power, and the model was not as detailed as others described here. Swider 45 examined the addition of CAES to the system using an endogenous investment model, which included the stochastic nature of wind power. This showed that, at certain levels of wind power generation and certain capital costs, CAES can be economic in Germany for large-scale wind power deployment, taking into account the variable and uncertain nature of wind. Ummels et al. 44 examined the effect of storage on system operation in the Netherlands, using a deterministic representation of wind power and a detailed unit commitment and economic dispatch algorithm. It was found that, though storage became more viable for the system with increasing levels of wind power, it never proved to be the best option for the system examined. Work examining French and German systems in the period from 2010 to 2030 using deterministic representation of wind and a simple dispatch model also shows an increased value for storage as wind generation levels increase, 48 depending on price spread and the region being examined. It was shown that storage is more valuable in Germany compared to France, and CAES is seen to be more valuable than pumped hydro storage, mainly due to different investment costs the net present value of CAES is positive in Germany by approximately While most studies find that increasing wind improves the case for storage or demand-side options, one study on the Midwest Independent System Operator (Midwest ISO) system in the United States, which used a capacity expansion model, found that the value of storage may actually decrease with increasing wind; 49 however, this study used a traditional capacity expansion tool that does not accurately capture the impacts of the intra-hour and hourly variability and uncertainty due to wind, which may be a primary benefit of storage. A study on the Irish system with 20 60% of energy coming from wind power shows that storage does not become economically viable until at Volume 3, January/February John Wiley & Sons, Ltd. 101

10 wires.wiley.com/wene least 30% penetration is reached. 43 This is due to a primarily gas-driven flexible generation mix; one additional result of interest is that including stochastic uncertainty in the model through stochastic unit commitment increased the value of storage significantly compared to when forecast error is known and only additional reserves are carried. Similarly, a study on the Texas system 42 also shows high penetrations are needed before storage makes a significant difference in curtailment levels; this is driven by the fact that at lower wind penetration levels the level of curtailment, and hence opportunity to reduce curtailment and store the wind, is low. This model did not include stochastic representation of wind but shows similar results to more detailed stochastic unit commitment models. A U.S. Department of Energy study on the value of hydropower in the United States 50 modeled the 2020 power system in the Western Interconnection with a forecast error included in the model such that the value of storage to mitigate uncertainty is captured; again including this is shown to increase storage value significantly. This showed the value of pumped hydro storage to energy arbitrage and ancillary services over multiple different scenarios, with energy arbitrage making up a significant portion of revenues in all scenarios. The average value for pumped hydro storage was relatively low, at $5 20/kW for low wind/solar penetration using modeling which did not capture intrahour variability and day ahead forecast uncertainty. Modeling the wind uncertainty and increased reserve requirement had a significant impact; revenues increased by up to $10/kW $30/kW. This showed that increased levels of wind and solar power generation will increase the value of storage, as well as demonstrating that accurate modeling of different wind attributes (forecast uncertainty and impact on reserves) is important to capture the full value of new flexible resources. In all of these papers looking at energy arbitrage, it should be noted that the size of storage was assumed relatively big (more than a few hours), such that the time horizon of optimization would not significantly alter results as would be the case with battery storage with less energy. In Europe, the European Wind Integration Study 51 examined different options for integration of large amounts of wind power throughout Europe. This large study looked at a range of impacts of wind integration, from grid reinforcement to the impacts on stability and required interconnection standards, as well as the cost to integrate wind. The study showed that DR at 100 /MWh could reduce total system costs; however, the cost impacts are limited in this study, as the study is focused more on overall system impacts of wind than DR, which is not a key focus of the study; therefore, it is difficult to draw significant assumptions other than the fact that DR could have a role to play. With regard to storage, this study considered new pumped hydro storage in Spain, Germany, and the Netherlands, as well CAES in Germany and increasing transmission to Norway to enable usage of the large hydro reservoirs there. The main conclusions are that in some areas, such as the Netherlands, the large additional cost would not be justified whereas in other areas it may be cost effective. It is shown that connection to Norway to increase utilization of hydro reservoirs would be cost effective with high penetrations of wind power; this is partly due to the high interconnection between European countries envisioned. For DR to shift power, if it is able to respond during the day due to the relevant pricing or incentive structure, 34 it may be able to participate in intraday balancing, which mitigates day-ahead forecast errors for variable generation 52 and can be used to reduce generator cycling. 53 Demand that responds to realtime signals (prices or other suitable signals) may mitigate operational challenges for thermal plants that are expected to become increasingly difficult with variable generation, including minimum generation constraints and ramp rate limits. 54 Challenges with managing electrical power systems during times with high wind generation and low demand, meanwhile, may be mitigated to a degree with demand resources that can provide frequency regulation. 20 Off-peak electrical vehicle charging increases electrical demand and has been shown in studies to reduce curtailment of variable renewable generation in high penetration scenarios. 54 Meibom et al. 55 and Kiviluoma and Meibom 56 show the benefits of using thermal storage for wind integration. These papers show that the benefits could be significant and include the stochastic nature of wind and model thermal storage as a dispatchable resource. Mathiesen and Lund 57 examined various technologies for wind integration, showing that thermal storage can be very useful in integrating increased amounts of wind power when compared to other conventional options; this study is more focused however on system expansion than detailed hourly modeling. Provision of Ancillary Services and Load Following to Accommodate Wind Variability and Uncertainty over Minutes to a Few Hours Another important and valuable area where these flexible resources may play a significant part in John Wiley & Sons, Ltd. Volume 3, January/February 2014

11 WIREs Energy and Environment Demand side and storage options for integrating wind power integrating wind power is in allowing the system to better accommodate the increased short-term variability and uncertainty due to wind power. DR is already used to provide regulation services to power systems in many parts of the world as is well documented in various reports. 58, 59 In the Nordic and Texas markets, almost half of contingency reserves are provided by loads, with no significant known barriers to this being a more widespread phenomenon. 59 The additional reserve and short-term load following requirements due to wind power have put focus on the potential of demand-side options to provide these reserves. 52, 60, 61 The referenced papers have shown possible control schemes as well as the technology used to provide system services from DR. Many existing and proposed DR programs can feasibly be used to manage the impacts of wind power on such timescales. 52, 62, 63 Studies have also shown how DR can be controlled to provide load following and ancillary services to integrate wind power and demonstrated examples of such. 61 These often involve aggregation of a large number of residential loads, utilizing heat pumps, electric vehicles, or similar technologies. 63 While the numbers required for aggregation are significant, they are nonetheless possible in many regions within the time frame of wind deployment projections. 20 For example, one study has shown that to provide 2 MW regulation, approximately 33,000 water heaters are required for 24 h a day provision, or 20,000 to provide regulation between 6 am and midnight. 20 Electric vehicles have been demonstrated as a demand-side option to provide a significant portion of the increased reserves expected due to wind power. 61 Storage has also been shown to aid wind integration in regard to meeting additional reserve 14, and ramping requirements. Storage due to its quick response times, can provide a significant amount of system reserves; this allows other generation to meet demand more efficiently and may allow other generation to be committed off. This will reduce costs and may also reduce wind curtailment; 65 reduction in wind curtailment alone is not the main goal for wind integration, but capturing as much of the wind output as possible is important to allow wind to reduce system costs. The previously noted U.S. Department of Energy study focusing on the value of hydropower showed that including reserve requirements based on variable generation in addition to traditional reserve categories increased the value of pumped hydro storage significantly. 50 This added these requirements to a detailed model of the Western Interconnection of the United States to capture increased revenues from ancillary services for storage in the presence of high wind penetrations. Similar studies on the value of CAES was carried out by Drury et al., 84 which examine revenues from both energy and reserves when cooptimized for different U.S. markets; they show that, based on current prices and assumption of price taker for storage, CAES may be justified in some energy markets. Some forms of energy storage, such as flywheels or batteries, can provide frequency regulation extremely accurately, as 16, 67 described and demonstrated in numerous papers; this allows less regulation reserve to be carried and thus improves system economics. 68 A final aspect to energy storage or demand-side options with regard to short-term ramping of wind generation is their ability to reduce ramping from other generators, and thus reduce the impact of wind on cycling of fossil plant. 46 Maintaining System Stability with Increased Wind Power Storage and demand-side options can help to mitigate some of the impacts of wind power on system frequency and voltage stability. Studies 14, 69 have examined how storage or demand-side options may be able to provide inertia or primary frequency response, the main sources of which may be displaced by wind. These studies use stability tools and power flow modeling to capture the impact on system inertia of flexible resources. This fact should be balanced against the fact that wind itself may be able to synthesize inertia and primary frequency response, 70 so the value of building a resource solely for this purpose would be low. From the perspective of transient stability, storage has been shown 71 to have a positive impact on transient stability. Overall, storage and demand-side options may not be able to replace traditional sources of stability to the same extent as they may be able to replace traditional sources of other services, such as supply/demand balancing, as outlined in the NERC report on flexible resources. 25 However, if their cost can be justified through other grid services, then there may be some additional value to be gained from providing these services; the importance of capturing different value streams is described in the future research section later. Seasonal Shifting of Energy to Improve Wind Integration While most of the challenges for integrating wind power that have been focused on to date are on the minutes-to-hours-to-days timescale, there will also be impacts in terms of longer-term resource adequacy; wind is not always available to meet peak demand. Related to this is the ability of energy storage to shift Volume 3, January/February John Wiley & Sons, Ltd. 103

12 wires.wiley.com/wene wind energy from a period of the year when there may be a high wind capacity factor, but relatively low demand, to periods of higher demand. One paper examining this issue 72 showed that it would require storage in the range of 10 20% of annual energy demand to shift enough wind and solar power to periods of highest demand so that no additional fossil plant is needed; this however looked at multiple years of wind and load data it is not clear how wind power uncertainty would impact the results, or how generalized the result is. It is not as clear how DR could be used in this manner, as it is unlikely to have a long-term component. Other work has examined how to best operate such a large storage system using stochastic optimization 73 to manage the uncertainty in wind power on a week or month ahead basis. This used a production cost tool with multiple planning horizons annual, monthly, weekly, daily, etc. to best capture wind output over time and set up the storage reservoir targets accordingly. However, it assumes relatively good performance of long-term wind forecasts, which may not be achievable. Integrating Wind in Isolated Systems An aspect of wind integration where storage or demand-side options appear to be very effective is in the integration of wind into isolated systems. These could be island systems, with very little or no interconnection to other areas, 74 or microgrid-type systems, which attempt to meet demand from local supply and are designed to continue operating if disconnected from the rest of the system (e.g., military bases, universities 75 ). Owing to their small size and the lack of flexible resources within these systems, the per-unit variability is likely to be significantly greater. Many different island systems have examined or are demonstrating storage and/or demand options to integrate wind. Papathanassiou and Boulaxis 76 examined the operation of storage on island grids and show that storage makes a valuable contribution to Greek islands with high wind power penetration, allowing maximization of wind energy used on the island and reducing fossil fuel imports, by guaranteeing production at certain hours of the day, at a cost of 35c/kWh, which may be high for mainland systems but is reasonable for islands. On some Greek islands (e.g., Crete), wind power is not allowed produce over 30 40% of load and is regularly curtailed. 74 The system operator has specific concerns about both frequency regulation and stability, and hence they implement strict penetration limits. 77 These curtailments have stimulated interest in installing storage in Crete, which currently gets 15% of its electricity from wind power. 78 In the Hawaiian island of Maui, battery storage is currently being deployed to manage ramping from a wind farm; due to the small size of their power system and the relatively large size and variability of the wind farm, this battery is used to minimize wind ramps. 79 Thus a review of literature and experience on island systems shows that storage, and likely DR with similar characteristics, are likely to be of more value than on larger systems, due to high-energy cost and the relatively large size of wind plants compared to the overall system. Transmission Congestion Relief and Transmission Deferral Wind power is often located far from demand. For example, in the United States, the Midwest region has very good resources, but most demand is near the coasts; therefore, large amounts of transmission would need to be built to exploit this resource. It would be expensive and could encounter public opposition. 80 Therefore, there may be significant wind curtailment due to transmission capability being insufficient. 81, 82 As shown in Scorah et al., 82 this could be overcome by upgrading or building new transmission, or by employing storage near the site of generation (in this case, demand-side options are unlikely to be significantly useful). In certain areas, storage may be more economical than building new transmission (or the only possible option if transmission cannot be built for political, environmental, or other reasons). The size of the storage relative to wind power and available transmission will be important to best use this type of storage, the wind plant and storage should be optimized simultaneously to ensure correct sizing. 83 This application is likely to be more useful in large systems with locational pricing (such as the U.S. ISO markets) or those where two separate markets operate, and with different variability in price profiles, which can be taken advantage of by the wind and storage plant, as shown in Denholm and Sioshansi. 83 Sizing Storage and Demand-Side Options to Meet Wind Integration Challenges Many past studies incorporate an assumption for a certain size of energy storage 43, 45 (i.e., a fixed number of hours of storage are assumed) or an assumption about the number of hours of DR available; 53, 85 sometimes the energy storage size impact has been examined by altering the storage size, that is the number of hours of storage, as a sensitivity to examine impact on results. 43 However, these papers generally do not examine in detail the trade-off between number John Wiley & Sons, Ltd. Volume 3, January/February 2014