Besides being a nice opportunity to spend three days in
sunny Orlando, Florida in the middle of December, the Power Generation Week
conference is widely known throughout the electric power industry as one of the
most important places to be all year. Last month’s PowerGen event drew more
than 20,000 attendees from 105 countries and featured more than 70 conference
sessions, including three where TRC experts presented on best practices for
connecting utility-scale solar photovoltaic systems to the grid, managing
power-plant closures, and expanding the opportunity for combined heat and power
There are few better examples of the phrase “like drinking
from a fire hose” when it comes to describing how much information you are
exposed to at an event like PowerGen. With the benefit of a few days of
reflection, though, here are six things that really stood out to us:
Energy storage systems are essentially giant racks of batteries to store excess energy typically produced by solar panels or wind turbines for use later. Yes, energy storage is posing many still-unanswered questions for utility managers and regulators about how they should be compensated and incorporated into utility rates and operations, and only a handful of utilities are moving into storage at scale. But across three days of conversations and presentations, we were struck by how extraordinarily popular energy storage when combined with solar PV is proving to commercial customers in so-called “behind-the-meter” applications. Companies installing these systems are reaping both energy savings and the opportunity to improve electric frequency control and system operations. GTM Research/ESA’s U.S. Energy Storage Monitor has estimated that behind-the-meter energy storage installations in the U.S. grew roughly seven-fold from 2014 to 2015. Based on what we saw in Orlando, we expect to see continued robust growth in BTM storage in 2016 and 2017. Demand is enormous, and early adopters are absolutely seeing and reaping the value.
As a rule, most utilities are extremely open, perhaps surprisingly open, with information about where they would encourage both solar and energy-storage developers to install systems, down to even identifying specific circuits where they’d most welcome storage and others where they don’t see it being helpful or cost-effective. (On the contrary, in the not-so-recent past, developers of new generation—like solar PV and wind turbines—sometimes learn how difficult it can be to get technical information like this from some utilities.) While details around how storage gets valued and paid for are still being worked out, utilities such as Sempra Energy’s San Diego Gas and Electric and others clearly see and welcome operational benefits of adding storage in conjunction with solar and wind to compensate for the variable output from those renewable resources.
Related to that, the days of gigawatt-scale combined-cycle gas-turbine electric generating stations appear to be essentially over, at least for now. The new “sweet spot” for the industry appears to be gas plants of 200 to 500 megawatts of generating capacity, located close to load centers to minimize transmission costs and power losses. One major reason why: As grid managers rely more and more on gas plants that can be cycled up and down rapidly to backstop solar and wind power as their output fluctuates, 200-500 MW in capacity is an ideal match for solar and wind projects of roughly comparable effective maximum output. Backstopping renewables with smaller, geographically distributed plants is simpler and more effective than ramping up and down a 1,000- or 1,500 MW gas plant hundreds of miles away. Evidence of this trend is based on the increase in distributed generation projects and microgrids that provide grid stability with rapid response times while meeting emissions requirements – all this is driving the need for a robust and flexible transmission model
General Electric and Siemens have hard-earned and deservedly strong reputations among power-generation professionals for the quality and reliability of the turbines they produce. GE and Siemens continue to improve efficiency, ramp rates and cycling capabilities into their turbines and combustion systems. Mitsubishi is offering negative interest rates for their turbine products. Essentially, Mitsubishi is passing on to its customers the negative national interest rates the Bank of Japan adopted last year in hopes of jolting the Japanese economy into faster growth. As much as generation owners and developers trust and love their GE and Siemens equipment, the promise of getting a rebate every month on their turbine loan will inspire many of them to give Mitsubishi another look, especially with their M501GAC Fast turbines which provide fast starts with excellent efficiency and capacity in the market.
Beneficial use of older power plant sites continues to be interesting. Some sites are being repowered with modern generating technology. Certain urban sites have been sold for mixed use redevelopment at significant prices.
Generally speaking, there’s a lot more optimism in the energy industry than there was this time last year, and a sense that the new administration and Congress will be more supportive of energy production and transmission projects and reduce red tape and roadblocks. Still to be seen, though, is whether coal regains a promising future. Today, the biggest challenge facing coal is no longer environmental restrictions but pure economics: The availability of gas has increased so much, and the price has fallen so much, that natural gas units are knocking coal out of the market based just on economics. Many of the people we talked to connected with coal production and coal-fired electric generation are hoping 2017 will bring more federal support for “clean coal” technology research, development, and testing but some utilities believe it is up to them to find a way to consume coal in a responsible and sustainable manner.
Power Generation Week returns in 2017 on December 5-7, this
time to the desert city, Las Vegas. We’re excited to see what this year brings
for this dynamic industry, and we’re excited to help TRC clients successfully
navigate the constantly changing technologies, policies, and practices that
drive how we get and use our power.