BACKGROUND
In most countries, electricity and heat constitute the most important sector accounting for CO2e emissions; it ranks somewhat lower in Canada as 59% of its electricity comes from hydro sources. Yet,24 coal-fired power plants with total generating capacity of 9613 MW accounted for an average of 20.3% (115.6 Mt) of total Canadian emissions from fossil fuel burning (569.6 Mt) in 2006-2011.
The importance of coal-fired power globally cannot be overemphasized – about 80% of China’s and more than two-thirds of Australia’s and India’s power is generated by coal, while more than 40% of electricity produced in the United States and Germany comes from coal (wdi.worldbank.org/table/3.7 accessed September 18, 2014).
Despite anticipated energy conservation, future demand for electricity is expected to rise as populations grow, economies expand, and more electricity is needed to power everything from enhanced electronic equipment to electric vehicles. While some look to clean coal as a solution, carbon capture and storage (CCS) technology is expensive, risky due to potential release of CO2, and still some way off (The Economist 2009; van der Zwaan & Gerlagh 2009; Ha-Duong & Loisel 2009).
Natural gas and nuclear energy are important alternatives to coal; natural gas has recently gained the upper hand due to unconventional shale gas plays, although gas simply replaces one fossil fuel with another, albeit a cleaner burning one. Nuclear energy must overcome challenges related to high costs and public acceptance, especially after the destruction of the Fukushima plant in Japan (The Economist 2012); indeed, acceptance by the public is even less likely than with CCS (Ha-Duong & Loisel 2009). Given these constraints, it is little wonder that the focus of climate mitigation is increasingly on renewables.
Integrating renewable generating facilities into an existing grid
Unsymmetric demand structual
The electrical load that the system operator must satisfy varies a great deal throughout the day – from low demand at night to peak demand during the late afternoon and evening – and throughout the year.
Power demand at night is some 50% to 80% below daytime peak demand (based on data for the Texas, Ontario and Alberta grids). In most jurisdictions, base-load demands are met by combined-cycle gas turbines (CCGT), coal or nuclear power. Because it is difficult and costly to adjust output from baseload plants, it is necessary at peak demand times to have generation sources (e.g., open-cycle gas plants, hydroelectricity) that can adjust output very quickly. Alternatively, power can be purchased from other jurisdictions via high-voltage transmission interties.
Unstable supply structure
The supply structure has implications for the integration of renewable power from intermittent sources such as wind (Hirst & Hild 2004; Lund 2005; Kennedy 2005; van Kooten 2010). The wind often blows at night when the demand is met entirely by the base-load plants. At that point in the demand cycle, price is often below the marginal cost of production and the system operator must take some generating facilities off-line.
Due to ramping considerations and the high costs of operating at less than optimal capacity, the output of base-load power plants is generally reduced very little and plants are rarely taken off line (Nordel’s Grid Group 2000; Lund 2005; Scorah et al. 2012). Rather, hydro and/or wind output is reduced, because it is simple and cheap to do so. This problem can be mitigated, for example, if intermittent electricity can be stored in a reservoir (Benitez et al. 2008; Scorah et al. 2012).
The successful integration of electricity from renewable sources depends on the legislation under which a system operator functions. If the operator is able to dispatch intermittent wind, costs will be much lower than if wind is non-dispatchable – accepted regardless of the impact on other generating facilities. Researchers have investigated the problems associated with non-dispatchable wind and combined heat and power (CHP) (Liik et al. 2003; White 2004; Lund 2005). They found that grids are difficult to manage when output from large-scale wind farms reaches a maximum (often at night when CHP output also peaks) and load is minimal, while output from base-load facilities remains high. Unless electricity can be ‘dumped’ into another jurisdiction during these times, the adjustment costs imposed on extant generators might be large (AESO 2008).
inefficiency
Successful integration of wind energy depends on the generating mix of the extant system (Maddaloni et al. 2008b; Prescott & van Kooten 2009). High penetration rates of intermittent power sources has an impact on system CO2 emissions –reduced emissions from wind power do not replace emissions from thermal power plants one-for-one, for example. If a coal-fired power plant needs to lower output to accommodate wind, this leads to inefficiencies in fuel use resulting from operating below optimal capacity.
Storage
Storage of wind-generated electricity offers a way out, but storage also enables coal plants to operate more efficiently, thereby saving fuel and potentially reducing CO2 emissions. For example, Alberta sells coal-fired power to BC at night, buying back hydroelectricity at peak times during the day – de facto storage.
The primary obstacle
Lack of intertie transmission capacity is the primary obstacle to greater profiteering from such exchanges (Gross et al. 2003, 2007; DeCarolis & Keith 2006; but see Oswald et al. 2008). Even though a jurisdiction with plentiful hydro capacity could meet its power needs without purchasing outside power, it could become more profitable by trading power; by cooperating, the jurisdiction with storage capacity and its neighbor could simultaneously be made better off. There are clear benefits from more closely linking disparate operating systems. It remains an empirical question as to whether the benefits of such links exceed the costs of building the required transmission infrastructure (Gagnon et al. 2002).
The biomass energy
Finally, biomass energy has recently resurged in recent decades. Wood waste from sawmills and black liquor from pulp mills are now used on site for space heating or power generation, often accompanied by the sale of electricity to the grid. Roadside and other harvest wastes are promoted for generating electricity (Kumar 2009; Kumar et al. 2008). As a result of subsidies and mandates to reduce reliance on fossil fuels, wood pellet production capacity in western Canada has expanded to supply markets as far away as Europe as wood pellets can easily be co-fired with coal.
However, there are obstacles to the use of biomass: biomass energy is not entirely emissions neutral (van Kooten 2013, pp.338-347), greater demand for biomass energy increases supply costs and distorts land use (Niquidet et al. 2012), and increases prices of wood residuals harms the traditional wood manufacturing and pulping sectors (Stennes et al. 2010).