Furthermore, scenario planning could address the increasing intensity and frequency of extreme weather events. This would mean looking beyond historical data when revising forecasting to account for factors including increased load driven by electrification and impacts from behind-the-meter resources. Finally, operators could expand the geographical focus of their planning beyond the jurisdiction of the managed area, more conservatively anticipate what could happen in adjacent areas that could affect imports, or both. 3. Provide adequate incentives to ensure that the grid is resilient to longer-duration events. In a deep-decarbonization scenario, there would be multiday stretches when net load remained positive given high demand and low supply. A classic challenge for system planners would be a week of low wind in February in a northern region. Perhaps in those circumstances, demand for electrified heating would coincide with minimal solar output, coupled with an occasionally expected “drought” of wind power that puts the system in a bind. During these periods, the grid would require resources that have a higher energy and duration output threshold than today’s markets encourage through incentives. However, most market signals do not provide incentives for flexible capacity resources that can generate power for long periods (more than 12 hours). Utilities could share data with regulators and system operators to show load projections for deep-decarbonization scenarios and demonstrate the need for duration.
Regulators and system operators, meanwhile, could consider policies that avoid providing incentives for a single time threshold and instead reward longer-duration resources. For example, they could create mechanisms that auction capacity in tranches of duration that go beyond managing four-hour peaks. A report this year by the Pacific Northwest National Lab points to specific examples of policies like these being put in place. These include the California Public Utilities Commission mandate for procurement of long-duration energy storage, and PJM’s notice in its 2021 Federal Energy Regulatory Commission (FERC) compliance filing that energy storage assets need a minimum of ten hours of duration to receive full capacity credit. 43 Collaboration among stakeholders will be critical to develop market mechanisms to support an evolving grid. In particular, system operators, regulators such as FERC, utilities, and energy providers could work together to accurately reflect capacity needs and send the necessary signals to investors and energy companies to encourage development of flexible resources. ACTION AREA 6 Accelerating technological innovation to ensure timely deployment of new clean technologies Historically, clean technologies have come onto the grid over several decades, from initial small-scale deployment to broad commercial deployment. For example, offshore wind took 25 years to progress from the first commercial demonstration in Europe to starting to scale in the United States.
43 D. Bhatnagar et al., Compensation mechanisms for long-duration energy storage , Pacific Northwest National Laboratory, August 2022.
Accelerating the journey to net zero
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