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Electricity and Rock: Still Not Friends

By Evelyn Teel

In a previous blog post, we discussed findings from the U.S. Geological Survey (USGS) that the I-95 corridor is particularly at risk of grid outages in the event of a geomagnetic storm. You can read that blog post here: https://avalonenergy.us/2018/07/electricity-meet-rock/

Further research has been conducted, and a new report from the USGS was released earlier this year. You can read the full report here: https://doi.org/10.1029/2019SW002329.  

The research is based on measurements from geomagnetic observatories and magnetotelluric survey sites throughout the United States, and models the impact of a once-per-century geomagnetic superstorm. Based on more than three decades of field data, the researchers modeled the voltages that could be generated within US high-power transmission lines in the event of a superstorm. 

In addition to the previously identified risks along the East Coast, the report identified three additional areas of high risk: the Pacific Northwest; the Upper Midwest; and the Denver, Colorado area. The analysis only covered two-thirds of the continental United States, so unidentified areas of high risk may still exist in the South and Southwest of the country.

The two images below, from the report, illustrate modeled voltages and electric fields throughout the US transmission grid. Lighter colors indicate higher risk.

Lucas, G.,  Love, J. J.,  Kelbert, A.,  Bedrosian, P. A., &  Rigler, E. J. ( 2020).  A 100‐year geoelectric hazard analysis for the U.S. high‐voltage power grid. Space Weather,  18, e2019SW002329. https://doi.org/10.1029/2019SW002329

Areas of high risk are largely attributable to the geological structures of those areas, for example the crystalline rocks of the Superior Craton in the Upper Midwest and the crystalline rocks of the Piedmont Province in the Eastern US, which trends northeast-southwest from Maine to Georgia between the Appalachian Mountains and the Atlantic Coastal Plain. These electrically resistive rocks (i.e., rocks that impede the flow of electricity) in the upper mantle generate a higher geoelectric hazard. Simply put, if the generated electricity would not be absorbed into the ground, it could cause extensive damage as it remains on the surface. The interaction of the geologic structure with the geoelectric fields and the transmission line geometry results in higher storm-induced voltages on the power grid along with a higher probability of more extensive grid damage.

Geomagnetic storms and their effects do not come without warning. The National Oceanic and Atmospheric Administration (NOAA) Space Weather Prediction Center (SWPC) reports on global magnetic deviations throughout the day, using a measure called the K-index. Working with data collection centers around the world, SWPC consolidates readings into a global Kp index every three hours. SWPC is also able to issue alerts when values surpass specific thresholds, which serves as a warning system for potential geomagnetic issues. More information about the K-index can be found here: https://www.swpc.noaa.gov/sites/default/files/images/u2/TheK-index.pdf and current and historical planetary K-indices can be found here: https://www.swpc.noaa.gov/products/planetary-k-index

Further research is ongoing, and there is certainly more to learn about this natural hazard. Ideally the data will be used by utility companies to evaluate the risks within their own geographies, identify potential solutions, and even possibly use this information to inform future transmission grid construction. Though not covered in the report, geomagnetic storms also can impact distribution lines, electricity generation facilities, and related equipment; the entities that oversee these components of the electric system should also evaluate their risks and take action where possible. Canada and Finland have taken technological steps to reduce the impact of geomagnetic storms, such as through transformer design (https://fas.org/irp/agency/dod/jason/spaceweather.pdf), that can inform approaches within the United States. 

On an individual basis, as we noted previously, there are not many options for mitigating this hazard. Some facilities may choose onsite or distributed generation as a mitigation (you can learn more about distributed energy resources here: https://avalonenergy.us/2020/04/distributed-energy-resources-give-you-options/); however, depending on the types of distributed energy resources used and the strength and geographic impact of the geomagnetic storm, distributed resources may also be susceptible to failure. Faraday cages can block electromagnetic fields, though they also can block helpful signals like radio waves, cell phone signals, and wi-fi. 

Our modern reliance on electronics makes us particularly susceptible to geomagnetic storms at this point in history. Previous storms have knocked out communication channels and caused blackouts, though the largest known storms occurred before the huge explosion in electronics we have seen in the past few decades. The Carrington Event in 1859 was the largest recorded geomagnetic storm, while a much smaller 1989 storm caused a blackout in Quebec, Canada. You can learn about these events and more on NASA’s website: https://science.nasa.gov/science-news/science-at-nasa/2008/06may_carringtonflare.

We will continue to keep an eye on this developing research, and will share any additional findings as they are published. In the meantime, we count ourselves lucky to live in a time when the scientific community understands this issue, is doing the research necessary to gauge the impact, and may find ways to mitigate the effects.

Thank you to Jeff Dowdell and Ralph Russell for their contributions to this article.

The Avalon Advantage – Visit our website at www.avalonenergy.us, call us at 888-484-8096, or email us at info@avalonenergy.us. 

Please feel free to share this article. If you do, please email or post the web link.  Unauthorized copying, retransmission, or republication is prohibited.

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Copyright 2020 by Avalon Energy® Services LLC

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Distributed Energy Resources Give You Options

By Evelyn Teel

In the earliest days of electricity, generation happened close to where the electricity was used. A small hydro facility might have been used to power a single factory, or a coal-fired generator might have electrified a small town. As demand for electricity grew and we developed the capability to move it over long distances, power plants were often built in more remote areas. This allowed us to leverage distant resources such as waterfalls, build larger plants that could not be accommodated in denser areas, and keep pollution from population centers. Generation now may be coming full circle, with increased interest in Distributed Energy Resources (DER) – that is, a source or sink of power, whether located on the electrical distribution system or behind a customer meter, that operates near the facility in which it is used.

DER can provide power to one building, a campus, or even a town. In many cases, DER are connected to the grid to ensure stable, efficient power availability. If the distributed resources are not producing all the electricity the facility needs, the facility can pull power from the grid. Likewise, if the distributed resources are producing more electricity than the facility needs, the excess, in some cases, can be sold to the grid. Some systems are able to be disconnected from the grid, or “islanded,” in the event of an emergency. This means that if the rest of the grid goes down or experiences blackouts, the facility can still operate on its own, potentially at a reduced level. In some cases, the facility is permanently islanded, and therefore is disconnected from the grid entirely. This is less common, but can be an option for facilities operating in remote locations or requiring extra security.

Types of Distributed Generation

Depending on the energy requirements of the facility, the characteristics of the surrounding environment, and any organizational preferences, distributed generation can be composed of a variety of resources. The most basic type of resource might be a generator, providing emergency power in the event of a grid outage. From there, solutions can get increasingly complex, and may include one or multiple types of generation. 

Solar, a common distributed resource, must be balanced by either grid connectivity or other resources, due to its intermittent nature. Natural gas-fueled microturbines can be used, and a combined heat and power system can enable capture of waste heat from those microturbines, for space or water heating. Combined heat and power also can be leveraged in conjunction with industrial processes that have a thermal load. 

Microgrids may incorporate battery storage in order to store excess electricity for times onsite generation is not producing. The list of possible distributed generation resources goes on: wind, hydropower, geothermal district heating, geothermal heat pumps, waste biomass conversion to renewable natural gas, waste incineration, anaerobic digestion, and more. Careful consideration should be given when developing a system to ensure that the selected type(s) of generation is/are robust, reliable, and efficient.

Benefits of Distributed Energy Resources

As the costs of DER resources fall – either through reduced equipment costs or decreases in fossil fuel prices – there can be cost savings to implementing distributed generation resources. Energy costs may also become more predictable if not tied to wholesale electricity prices. 

One hidden source of cost savings with distributed generation relates to the fact that, when transmitting power over long distances, some of the electricity is lost in the form of heat. These transmission and distribution line losses are less of an issue when power is generated close to where it is used (i.e., in distributed generation). Though consumers do not directly pay for this lost electricity (approximately 5 percent of generated utility electricity), it is wrapped into the total cost of energy. When generation happens behind the meter and close to a facility, the consumer does not end up paying for lost electricity. Less wasted energy also means less unnecessary pollution. 

Microgrids, or distributed generation that can operate separate from the utility grid, can improve reliability and be integral to disaster planning. When a facility is no longer fully reliant on the grid for power, it is less susceptible to issues like grid outages and brownouts. If a facility is equipped to draw power from distributed resources, storage, and the grid, it benefits by having a fallback in case one power source fails. It is important to note, however, that some causes of grid outages, such as severe weather, natural disasters, or an electromagnetic pulse, can simultaneously damage distributed resources and grid resources. In addition, it is important to note that utilities may add “standby” charges in order to provide fallback power.

In addition to enhancing reliability, DER can also enhance security. Especially for facilities that require 24/7 uptime, distributed resources can provide a backup in the event that utility grid service is unavailable. These distributed resources may be as simple as backup generators, or may be a complex microgrid with multiple power sources, including storage. Facilities that require the utmost security may choose to be able to island, becoming reliant exclusively on distributed resources.

Case Studies

Incentives exist to implement some types of distributed generation, though they can vary over time. For example, there are incentives to support the installation of onsite photovoltaic (PV) solar arrays, but they are changing. The federal investment tax credit (ITC) for PV solar dropped to 26% of capital cost this year; it drops to 22% in 2021 and further to 10% in 2022 and thereafter. 

Particularly taking into account incentives, the financial benefits of distributed generation can be quite compelling. Here is an example of a planned 2,000 kW onsite solar PV generation system. Electricity produced via solar PV creates solar renewable energy credits (SRECs), which can be (I) retired, (II) sold to electricity load serving entities (LSEs) that must comply with state renewable portfolio standards (RPS), or (III) sold to end users who wish to further green their supply. The sale of SRECs in this case generates income each year. In the first year, these SRECs are worth approximately $113,704. The initial investment cost is just over $3.6 million. However, after accounting for the federal investment tax credit (ITC); bonus depreciation; the SREC income; and the energy savings realized by generating power onsite, the actual first year cost of the project is just over $1.7 million – less than half the total price tag. The breakeven point – the time at which the project is expected to have paid for itself – is six years. Given that the lifespan of solar panels is approximately 25 years, this leaves plenty of time for significant cost savings. 

The value of onsite generation might be measured by more than just its financials, however. We also calculated that, over the estimated 25 year lifespan of the solar panels, the facility would save on carbon emissions equivalent to: more than 45 million pound of coal not burned; nearly 14,000 tons of waste recycled rather than landfilled; more than 4.6 million gallons of gasoline not consumed; or 679,763 tree seedlings grown for 10 years. This analysis indicates not only the financial upside of the project, but also the long-term carbon savings it enables.

Below are summary financial analyses related to three under development distributed generation (onsite solar PV) projects, including the project outlined above (Project A).

Project AProject BProject C
Onsite Solar2,000 kW1,700 kW2,000 kW
Year 1 Summary$$$
Initial Investment(3,644,028)(2,872,343)(3,717,150)
26% Federal ITC947,447746,809966,459
Depreciation Cash Value650,459512,713663,511
Energy Savings (year 1)205,732220,028263,612
SREC Income (year 1)113,704130,554367,507
Year 1 Cash Flow(1,726,686)(1,262,239)(1,456,061)
Financial Statistics
Breakeven6.04.82.9
After-Tax IRR13.6%18.9%32.8%
After-Tax NPV$2,210,468$2,995,331$3,898,417
Environmental Offset*
Pounds of coal not burned45,297,59038,502,95241,900,271
Tons of waste recycled, not landfilled13,98311,88612,934
Gallons of gasoline not consumed4,625,8503,931,9734,278,911
Tree seedlings grown for 10 years679,763577,799628,781
*Over 25 years, carbon savings equivalent to one of the above

When deciding whether to pursue distributed generation – whether through solar, combined heat and power, geothermal, biofuel, or others – it is crucial to work with an independent partner not only to understand the options that best fit your needs but also to identify the equipment or service providers that will most effectively implement your desired approach. Just as with competitive supply contracts for electricity and natural gas, the lowest priced option is not always the best, and it is important to understand all the fine print before making a decision. When implementing distributed generation, it is also important to ensure that you have appropriate contracts in place for supplemental electricity service or to enable the sale of excess electricity back to the grid.

We anticipate continued interest in distributed generation, not only for its potential fiscal benefits but also its potential reliability and security benefits and clean energy credentials. Please contact us if you are interested in learning more.

The Avalon Advantage – Visit our website at www.avalonenergy.us, call us at 888-484-8096, or email us at info@avalonenergy.us. 

Please feel free to share this article. If you do, please email or post the web link.  Unauthorized copying, retransmission, or republication is prohibited.

All images copyright 2020 Avalon Energy® Services LLC

Copyright 2020 by Avalon Energy® Services LLC

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Wind Power, Transmission Lines, and a Vision for a Better Electric Grid

By Evelyn Teel

Wind energy is an incredible resource with incredible potential. The generation costs are low, the efficiency of turbines continues to increase, and the threat to birds continues to decline. An unfortunate irony, however, is that the places with the most prolific wind energy tend to be places with relatively little demand for power.

West Texas, the Dakotas, Kansas, the Oklahoma panhandle – these are all places where the wind blows powerfully and fairly consistently. However, getting electricity generated by that wind to the population centers that most need it is challenging in the current environment. The decentralized nature of the US power grid means that moving electricity across state lines and between regions is difficult, and sometimes seemingly impossible. 

A wind farm

Several people have envisioned networks of high-voltage transmission lines that could move power from areas of abundant wind energy (as well as solar energy) to areas that could use that power. Russell Gold’s book Superpower centers on one of those people.

Michael Skelly conceptualized a series of high-voltage, direct current transmission lines radiating out from the center of the United States to points east and west. Little did he realize, however, quite how complicated it would be to implement that vision. With differing economic, political, regulatory, and cultural realities in different states, overlain by the interests and powers of the federal government, Michael Skelly’s company, Clean Line Energy Partners, would require agreement from myriad stakeholders in order to make their project a reality.

High-voltage transmission lines and supporting tower

Though Superpower focuses primarily on Michael Skelly – including earlier ventures that prepared him for the task at hand – the author incorporates a wealth of information about the history of the electric grid and the energy field. He provides fascinating background about major developments that have led to the system we have in place today, from the first factory with generator-powered electric lights to the first centralized power plants to the first “experiment” in which wind energy was fed back into the electric grid. He also illustrates the massive declines in the cost to generate wind energy, along with the growth in the size of wind farms.

The electric grid has evolved over time such that electricity is generated and used within the same general area – first, within the same building; then, the same city; and now, the same region. In order for renewable energy to provide a sizeable percentage of our electricity needs, the next step in that evolution will need to be transmission lines that allow electricity to be moved across regions. The book’s extensive discussions of the various players in this drama – utility companies, public service commissions, elected officials, landowners, federal agencies – and their interests and motivations bring clarity to the challenges facing anyone attempting to modernize the grid. It is also fascinating to learn how differently various states approach the energy industry, and how state and federal powers intersect.

Russell Gold is clearly very sympathetic to Michael Skelly and comes across at times as more cheerleader than reporter. However, looking beyond the fanfare, the reader can gain a strong understanding of the challenges facing the US as we seek to incorporate more renewable energy, update the electric grid, and increase the resilience of our power supply.

The Avalon Advantage – Visit our website at www.avalonenergy.us, call us at 888-484-8096, or email us at info@avalonenergy.us.

Please feel free to share this article.  If you do, please email or post the web link.  Unauthorized copying, retransmission, or republication is prohibited.

All images copyright 2019 Avalon Energy® Services LLC

Copyright 2019 by Avalon Energy® Services LLC

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Electricity, meet Rock

For several years, the U.S. Geological Survey (USGS) has been investigating the potential effects of intense geomagnetic storms on electric utility infrastructure.  In 2016 they concluded,

“A severe geomagnetic storm could disrupt the nation’s power grid for months, potentially leading to widespread blackouts.  Resulting damage and disruption from such an event could cost more than $1 trillion, with a full recovery time taking months to years.” (1)

Bloomberg recently noted that in an upcoming report, the USGS more specifically identifies a stretch of the Interstate 95 corridor as particularly at risk of power outages related to geomagnetic storms.

This corridor is largely underlain by Paleozoic (very old) crystalline rock that acts as an insulator, reflecting back incoming energy from the sun, thus giving that energy a second chance to damage utility infrastructure.  Damaged electrical infrastructure, particularly utility transformers, can take many months to replace.

“Through a stroke of bad luck, the worst of these rocks basically traces the path of I-95 from Richmond, Virginia, to Portland, Maine, passing through Washington, New York and Boston along the way.” (2)

Putting aside for the moment the notion that rocks can be inherently good or bad, concerning how this connection between electricity and rocks may impact the electric grid, solutions are not simple.  Some may look to off-grid self-generation and battery storage for protection.  But, if a geomagnetic storm is strong enough to impact the grid, it also may impact the electric infrastructure at individual customers’ sites.

Faraday cages are a potential solution.  Faraday cages also may provide protection against EMPs (electromagnetic pulses).  More on this in the weeks ahead.

References:

Evelyn Teel, Ralph Russell and Jeff Dowdell contributed to this article.

The Avalon Advantage – Visit our website at www.AvalonEnergy.US, email us at info@avalonenergy.us, or call us at 888-484-8096.

Please feel free to share this article.  If you do, please email or post the web link.  Unauthorized copying, retransmission, or republication is prohibited.

Copyright 2018 by Avalon Energy® Services LLC

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NCAC – 22nd Annual Washington Energy Policy Conference

ONE WEEK FROM TODAY

Secure your spot here: https://www.ncac-usaee.org/event-2845352

Energy Technologies and Innovations: A Disturbance in the [Market] Force

Thursday, April 12, 2018, 8:30 AM to 6:00 PM

The George Washington University

Keynote speakers:

Mark P. Mills, Senior Fellow, Manhattan Institute

Gil Quiniones, President and CEO, New York Power Authority

In addition to these keynote speakers, the following panels will be held:

PANEL 1: The Grid Awakens: Electricity Generation and Demand
Phil Jones, Executive Director, Alliance for Transportation Electrification
Bryce Smith, Founder and CEO, LevelTen Energy
John Zahurancik, COO, Fluence
Barney Rush, Board Member ISO New England, Rush Energy Consulting (moderator)

PANEL 2: Hydrocarbons Strike Back: Innovations to Maintain the Status Quo

John Eichberger, Executive Director, Fuels Institute
Sid Green, President, Enhanced Production Inc.
Mike Trammel, Vice President for Government, Environmental, and Regulatory Affairs, Excelerate
Rita Beale, CEO and President, Energy Unlimited (moderator)

PANEL 3: Innovation: A New Hope in Energy

Bill Farris, Associate Laboratory Director for Innovation, Partnering, and Outreach, National Renewable Energy Laboratory
Elisabeth Olson, Economist, Office of Energy Policy & Innovation, FERC
Christopher Peoples, Managing Partner, Peoples Partners and Associates
Devin Hartman, Electricity Policy Manager, R Street Institute (moderator)

PANEL 4: Return of Energy Policy

Adele Morris, Policy Director for Climate and Energy Economics, Brookings
Jason Stanek, Senior Counsel, House Energy & Commerce Committee, Subcommittee on Energy
Pat Wood, Chairman, Dynegy
Kevin Book, Managing Partner, ClearView Energy Partners (moderator)

Note: Chatham House Rules apply.

Full Agenda and to register –> http://www.ncac-usaee.org/events.php#event151

RSVP: Required

Conference Information:

Organizer: Michael Ratner, NCAC-USAEE Vice President (mratner@crs.loc.gov) / 202-707-9529
Venue: The George Washington University, The Marvin Center, 3rd floor, Continental Ballroom, 800 21st Street, NW, Washington, DC 20052

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Natural Gas and Electricity Are Parting Ways – Part 1

In recent articles, we have explored the dramatic decline in natural gas prices over the past seven years.  See These Are Days To Remember and 10,000 Maniacs Were Right.

In the US Mid-Atlantic, natural gas and electricity prices have, over time, tended to move together.  While there has by no means been a perfect correlation between the two, the relationship has been strong.

Over the past 15 years, the coefficient of determination (R2) has averaged about 67% (see yellow line).  In other words, over this time period, 2/3 of the change in electricity prices can be explained by changes in natural gas prices.  More recently, however, the strength of this relationship has weakened and continues to weaken further (see red line).  Electricity prices have declined but not as precipitously as those of natural gas.

Why has this relationship weakened?  Two significant drivers relate to (i) dispatch order and (ii) capacity prices.

Dispatch Order

In scheduling energy to serve electricity users, the grid operator, PJM, utilizes a least-cost dispatch model.  PJM develops an expectation of projected system load on an hourly basis and then seeks bids from generators to supply energy to serve this load.  After bids have been submitted, for each hour, PJM accepts the lowest cost offers first and then works their way through higher price offers until sufficient supply has been cleared to match the projected load.  (There are a number of system constraints and complications that must be incorporated into the process, but this pretty much captures it.)  For each hour, the price at which the last megawatt-hour (MWh) clears sets the price for all the supply offers that clear in that hour.

For many years, the last generating units cleared were generally natural gas-fired units.  As a result, it has been these natural gas units that have set the price for electricity, leading to the strong link between natural gas prices and electricity prices.  A common understanding was that “as natural gas prices go, so go electricity prices.”

But now, low natural gas prices are leading to lower and lower supply bids by natural gas-fired generators, causing them to more frequently fall down the dispatch order and clear before coal-fired units.  Because of this, coal fired units are now more often becoming the marginal, or price-setting, units.  And, as a result, falling natural gas prices have not driven down electricity prices to the extent they once would have.

In addition to procuring energy, electricity wholesale suppliers must also own or procure capacity.  In our next article, we will look at how capacity costs influence electricity prices.

Evelyn Teel contributed to this article.

The Avalon Advantage – Visit our website at www.AvalonEnergy.US, call us at 888-484-8096, or email us at jmcdonnell@avalonenergy.us.  Please feel free to share this article.  If you do, please email or post the web link.  Unauthorized copying, retransmission, or republication is prohibited.  Copyright 2015 by Avalon Energy® Services LLC