Intermittent Renewables in the Next-Generation Utility

Advances in digital communications and renewable energy technologies are poised to facilitate a transition to a “next-generation utility” that fully integrates both supply- and demand-side resources in a way that can enable significantly larger penetrations of intermittent renewable energy technologies than conventionally thought possible. However, as the penetration of intermittent renewable energy grows, the variability of the resource becomes of increasing concern. This paper evaluates the potential reduction in variability due to the geographical dispersion of wind resources across large geographic areas. Specifically, the analysis uses data from within the Midwest Reliability Organization (MRO), the Southwest Power Pool (SPP), and the Electric Reliability Council of Texas (ERCOT). This analysis shows that there is a significant advantage to geographically distributing wind resources, even if individual sites do not exhibit large negative covariance. One of the primary advantages is the drastic reduction in time in which there is zero power production. Furthermore, all geographic regions show a reduction in portfolio variability compared to any individual site. The implication of this finding is that choosing locations for wind development in part based on benefits to system reliability can both decrease the cost of, and likely increase the total amount of, intermittent renewables that can be integrated on to an electric grid.