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Introduction

Policymakers, regulators, and system operators use a variety of tools and methodologies to evaluate and approve plans for new power system resources to reliably meet future electricity demand.

Traditional, least-cost power system planning considers the performance and costs of supply-side, demand-side, and transmission and distribution resources in order to plan the procurement and construction of new resources—and retirement of old resources—across several possible future scenarios. Power system planners typically develop a long-term road map, often called an Integrated Resource Plan (IRP), which outlines specific actions for achieving a preferred resource portfolio anywhere from 20 to 50 years into the future. Planners use many tools and analyses to develop and choose a future resource portfolio. Capacity expansion studies use system modeling tools to determine the long-term economic and operational performance of generation and transmission expansion options. The results of capacity expansion modeling inform the selection of a preferred resource portfolio.  Financial models are used to evaluate the impacts of different resource portfolios on revenue requirements for utilities and impacts on electricity rates for end users. Production cost models use advanced power system simulation tools to evaluate the operational constraints and costs associated with different future resource portfolios. These tools and others inform an evidence-based IRP.

To better plan for higher levels of variable renewable energy (RE) generation, traditional methods and models for generation and transmission planning can be revised to consider these steps: 

  • Assessment of the temporal and geographic variability of wind and solar resources
  • Analysis of flexibility from existing and planned generation resources, as well as potential demand response and storage options
  • Assessment of transmission expansion options that help balance supply and demand while increasing access to the best RE resources
  • Identification of reliability challenges under various possible future scenarios.

New steps in power system planning can complement traditional methods to facilitate higher levels of variable RE while maintaining system reliability and cost-effectiveness.

Example Interventions

  1. Integrate power system flexibility considerations into the IRP process, for example, by:
    • Defining system-specific flexibility metrics of interest (e.g., RE curtailment, ramp magnitude and frequency, minimum plant generation levels)
    • Using short-term dispatch (i.e., production cost) simulations to evaluate the flexibility of future power systems
    • Incorporating location-specific metrics of variable RE contribution to firm capacity to ensure that system expansion modeling maintains sufficient capacity to reliably meet future demand.
  2. Identify opportunities for planning approaches such as Renewable Energy Zones that can improve access to the most cost-effective locations for RE development through transmission expansion or upgrade.
  3. Employ best practices for optimizing the site selection of new RE resources. This may involve an iterative modeling approach to identify an optimal RE siting strategy that balances trade-offs between geographic dispersion and concentration in areas with optimal RE resources.  
  4. Integrate considerations of distributed RE effects on the distribution grid into planning models:
    • Identify peak mid-day output to anticipate potential issues related to intermittent reverse power flow
    • Identify need for advanced grid controls and automation rapid fluctuations in frequency and voltage.


Reading List and Case Studies

Renewable Energy Zone (REZ) Transmission Planning Process: A Guidebook for Practitioners

National Renewable Energy Laboratory, 2017

Achieving clean energy goals may require new investments in transmission, especially if planners anticipate economic growth and increased demand for electricity. The renewable energy zone (REZ) transmission planning process can help policymakers ensure their infrastructure investments achieve national goals in the most economical manner. Policymakers, planners, and system operators around the world have used variations of the REZ process to chart the expansion of their transmission networks and overcome the barriers of traditional transmission planning. This guidebook seeks to help power system planners, key decision makers, and stakeholders understand and use the REZ process to integrate transmission expansion planning and renewable energy generation planning. The guidebook presents a general organizational structure and details each step of the REZ process.

 

Planning for the Renewable Future: Long-Term Modelling and Tools to Expand Variable Renewable Power in Emerging Economies

International Renewable Energy Agency (IRENA), 2017

This step-by-step guide provides a comprehensive overview of power system planning and describes the key planning implications related to variable RE deployment and integration, with a particular focus on implications for emerging economics. The second part of the report describes the considerations needed to accurately represent variable RE in energy models and suggests several cross-cutting solutions to improve capacity expansion modeling.

 

The Future of Electricity Resource Planning

Laurence Berkeley National Laboratory, 2016

This report examines the future of electricity resource planning in the context of a changing electricity industry. The report examines emerging issues and evolving practices in five key areas that will shape the future of resource planning: (1) central-scale generation, (2) distributed generation, (3) demand-side resources, (4) transmission, and (5) uncertainty and risk management. The analysis draws on a review of recent resource plans for 10 utilities that reflect some of the U.S. electricity industry’s extensive diversity.

 

Electricity Capacity Expansion Modeling, Analysis, and Visualization: A Summary of Selected High-Renewable Modeling Experiences

National Renewable Energy Laboratory, 2015

Capacity expansion modeling is a fundamental tool for planning the future power system.  Capacity expansion models can provide insights on possible pathways for the power system under different assumptions about technology innovation, transmission expansion, demand changes, and policies. This report summarizes the experience of capacity expansion modeling at the National Renewable Energy Laboratory (NREL).  The authors address in detail NREL’s approach to key questions that arise when modeling future capacity expansion, with a particular emphasis on modeling significant levels of variable RE deployment.  

 

Best Practices in Electric Utility Integrated Resource Planning

Regulatory Assistance Project (RAP), 2013

This report presents a brief introduction to the IRP process as it has been implemented in the United States and describes the purpose and use of the IRP process. The report presents several case studies of IRPs and summarizes how they differ in terms of planning horizon, frequency of updates, representation of existing resources and planned retirements, and relationship with long-term procurement processes. The case studies include examples of best-practices for including renewable energy and energy efficiency considerations in the IRP process.

 

Mexico’s Regulatory Engagement in Bulk Electric Power System Planning: An Overview of U.S. Practices and Tools

National Renewable Energy Laboratory, 2016

This report, written as a summary for power system regulators and operators of Mexico, examines key practices of different U.S. jurisdictions for evaluating and approving generation and transmission expansion projects. The report includes a discussion about cost-benefit analysis to inform decision–making and a discussion about reliability standards and how to model reliability in the bulk electric power system in the context of increased adoption of variable renewable resources. Section 3.3 reviews approaches to modeling dispatch, capacity expansion, and power flow, with an emphasis on accurate representation of variable renewable resources, and Table 3 provides samples of power system models in use in North America.

 

Multistate Decision Making for Renewable Energy and Transmission: An Overview

University of Colorado Law Review, 2010

This article provides an overview of the traditional power system planning process in the United States, summarizes how legal authority for transmission planning is allocated between states and the U.S. government, and evaluates the challenges and solutions that state regulators have encountered with planning new transmission for renewable energy development. In addition to a discussion about the important merits of increased balancing area cooperation for system operations and transmission planning, the article includes a detailed review of the Renewable Energy Zones transmission planning process as implemented in Texas’ Competitive Renewable Energy Zones (CREZ) approach. 

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