From an integration viewpoint, as higher penetrations of renewable energy are deployed onto the grid, the value of forecasting increases, as the costs associated with ancillary services and suboptimal market set up is amplified. This happens because additional intermittent resources are added and need to be balanced in real-time or mitigated by storage processes. Moreover, as the comparative uncertainty of solar power output during peak hours is higher than the uncertainty of wind and hydropower output, the value of solar forecasting is typically higher.
Typically, third-party studies underestimate the total value of high fidelity forecasts as they focus primarily at forecasting from a day ahead, market integration perspective. Currently available commercial state-of-the-art forecasting services are inadequate for addressing short (intra-hour) and very short (<5 minute) time horizons and were not included in most studies and analyses. For example, there are numerous total life cycle costs associated with suboptimal forecasting for solar generators such as penalties and tariffs from grid regulators (ISOs, LSEs); the need to purchase spot market energy at premium pricing when forecasted generation is below PPA amounts; and higher insurance premiums to cover against PPA shortfalls. While the value of high fidelity forecasting has not been quantified against these life cycle costs, these benefits are particularly significant to reduce the overall cost and increase penetration of utility scale solar generation.
Additionally, intra-hour forecasting is especially valuable for utility scale renewable generation to control fast ramp rate events. In the case of solar, fast ramp rate event changes in power production can exceed 60%-80% over one-minute time horizons. This presents numerous challenges for integrating high levels of utility scale solar generation onto the grid in terms of power and frequency stability, such as increased curtailment and generation costs, scheduling and dispatch of additional energy resources. High fidelity forecasting can mitigate these problems through integration of short and medium term horizons to prospectively determine optimal ramp rate strategies.
For utility scale power generators, forecast-driven critical ramp rate strategies can provide the backbone to a robust, automated energy management system that increases operational efficiencies though optimized scheduling and dispatch, management of reserves and, most importantly, lucrative participation in energy markets.
Managing critical ramp rates are also of critical importance to ISOs for planning and operations, with variations in short term solar output adversely impacting power and frequency stability of the grid. While substantial adjustment tolerance is already built in to most power networks, voltage and frequency fluctuations are amplified as higher penetrations of intermittent generation are brought online, increasing the potential for grid instability.
Do we need to improve forecasting for supply resources that will be integrated into CAISO energy markets?
Technological improvements, reductions to the levelized costs of energy for renewable energy, and State mandated Renewable Portfolio Standards (RPS) have lead to a sharp increase in the amount of Solar and Wind projects completed or under development. While providing environmental benefits and introducing new sources of energy, higher penetrations of variable generation present new challenges to planners and operators of the electricity grid.
As higher penetrations of intermittent energy are produced and connected onto the grid, the need for high fidelity forecasting to optimally manage fast ramp rate events and provide firmed scheduling becomes increasingly critical in order to mitigate the rising costs associated with curtailment and ancillary services needed to improve power quality and maintain grid stability. High fidelity operational forecasting services that cover a wide range of temporal horizons are a cost effective way to improve energy security, power quality, and maximize return on capital investment through efficient operation and energy market participation.
The necessity and cost effectiveness of high fidelity forecasting is being realized throughout the industry, as IPP’s are requiring ‘forecasting’ within their Request For Proposals (RFP’s) from EPC firms. It is also becoming common for LSE’s to require dynamic scheduling and forecasting within Power Purchase Agreements (PPA’s). Moreover, in 2011, SB 2X was passed, amending California’s RPS law to include more renewable electricity generated out-of-state, if firm scheduling (i.e. forecasting) is provided.
And as of April 1, 2014, changes in the CAISOs Participating Intermittent Resource Program mean that renewable generators in CAISO territory are now required to provide 15 minute forecasts.
In addition, resources such as Demand Response (DR) and Distributed Energy Storage Systems (DESS) provide powerful and flexible ways for balancing authorities to optimally manage grid resources. Moving forward, the importance of and reliance on DR/DESS programs will continue to increase as balancing authorities look to new way to maintain the stability and reliability of the grid as higher penetrations of variable generation are integrated. The additional application of forecasting techniques and technologies to these new supply side resources can significantly improve the energy quality and reliability outcomes from renewable systems.
Key to this effort will be the utilization of highly accurate short and long term forecasting tools that incorporate vast improvements in spatial and temporal resolution. The lack of accuracy, spatial and temporal resolution available with currently employed supply side forecasting systems presents major challenges to balancing authorities.
Improvements in field-ready forecasting systems are critically needed to integrate supply resources into the CAISO energy market in a more efficient manner. We believe that improvements in forecasting will provide a cost effective way for balancing authorities to manage the added complexities of incorporating DR/DESS programs into transmission planning and real-time operations and manage the increasing effect of intermittency on many aspects of the grid.
Forecast Energy, Inc. is