Flexible Generation

Conventional generation and reservoir-based hydropower provide important sources of flexibility within a power system, complementing flexibility from system operations, demand response, storage, and transmission. This flexibility helps system operators manage normal fluctuations in supply and address increased variability and uncertainty from the large-scale integration of variable renewable energy (RE).

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Conventional generation and reservoir-based hydropower provide important sources of flexibility within a power system, complementing flexibility from system operationsdemand responsestorage, and transmission.

Although many conventional generation and hydropower plants provide baseload power, they can be equipped with enhanced technologies and run with improved operational practices that allow for more flexible use of these plants. Accessing this potential flexibility enables system operators to help manage normal fluctuations in supply, and also to address the increased variability and uncertainty associated with the large-scale integration of variable renewable energy (RE). Plant flexibility can take many forms, including the ability to start up and shut down over short periods of time, be run at a low minimum load, rapidly change generation output, and offer ancillary services to support system reliability.

Analyzing the costs and benefits of enhancing flexibility from conventional generation is a critical step for power system planners and operators. In some cases, employing conventional generation for flexibility could be less expensive than acquiring capacity via the construction of new plants. For example, studies of high variable RE penetration in power systems in the United States indicate that, at a system level, the increases in cycling costs due to increased operation and maintenance needs (e.g., for increased cycling) are more than offset by the reductions in operational costs due to avoided fuel costs (Lew 2013).

At high penetrations, variable RE generation can displace conventional generation, leading to less frequent dispatch and fewer generating hours for conventional generators. Scaling up variable RE penetration can also lower the price of electricity due to increased competition. These factors may lead to insufficient revenue for conventional generators. Contributing flexibility to the power system can enable conventional generators to sustain economical operation, though doing so may not fully offset reduced income from bulk power sales.

Some system operators are beginning to classify flexibility services from conventional generators as a unique type of reserve (for example, the California Independent System Operator plans to operationalize a “flexibility ramping product” that will create a five-minute market for flexible ramping capacity) (CAISO 2015b). This flexibility reserve operates on a timescale longer than regulating reserves and is used to help manage variability of wind and solar generation. Flexibility reserves can make use of existing online capacity, depending on load and system conditions.

Example Interventions

The following operational, technical, and market practices could be used to garner additional flexibility from existing conventional thermal and hydropower plants.

  • Operational and regulatory improvements

    • Allow for lower minimum generation levels to accommodate high variable RE generation and/or low load periods.

    • Consider using pumped hydropower optimized to flexibility needs instead of its traditional use as a peak/off-peak resource.

    • Upgrade hydropower plants to be able to serve both lower loads and higher peaks and replace equipment including turbine runners, generator winding, excitation systems, governors, and control panels to increase efficiency, improve reliability, and provide greater flexibility and reduce operating costs.
  • Planning improvements

    • Design electricity markets in such a way that systems can be incentivized to provide flexibility; this includes forward flexibility markets in which generators sell future flexibility that a power plant can provide for specific services over given timeframes.

Key Tool

 FAST Tool and Exercise: Sustainable Energy Training

International Energy Agency, 2013

These slides describe the Flexibility Assessment Tool (FAST), which can be used to assess the flexibility of a power system. This assessment can help operators address the added variability and uncertainty associated with large-scale variable RE penetration on the grid. The tool specifically enables the examination of flexible generation, interconnection, storage, and demand-side management. Although these slides are intended to describe the FAST tool, they can also be used as a general guide for key steps to assess system flexibility

Reading List and Case Studies

Status of Power System Transformation 2018: Advanced Power Plant Flexibility

International Energy Agency, 2018

This report provides a comprehensive overview of the capabilities of different power plant technologies to provide system flexibility. The authors provide an updated framework to categorize flexibility at the power plant level, moving away from historic definitions of "baseload" and "peaking" plants towards a more system-focused categorization based on "energy volume" and "energy option" contributions. The report also details various options to enable power plants to provide more flexibility to the power system, both through physical retrofits and through regulatory and market interventions. Additionally, the authors provide detailed information about how to take stock of power system flexibility in order to inform investment decisions. The report concludes with a discussion of policy options for policymakers to improve power plant flexibility under different market contexts. 

Impact of Flexibility Options on Grid Economic Carrying Capacity of Solar and Wind: Three Case Studies

National Renewable Energy Laboratory, 2016

This paper quantifies the benefits of various options for increasing power system flexibility. The authors evaluate the benefits of flexibility using two primary metrics: economic carrying capacity and system costs. Results indicate that flexibility can increase the economic carrying capacity of wind and solar energy and reduce system costs. Multiple combinations of flexibility options are evaluated, including combinations of demand response, energy storage, enhanced cooperation among balancing areas, lower minimum generation requirements for gas and coal generators, among others. 

Flexible Coal: Evolution from Baseload to Peaking Plant

21st Century Power Partnership, 2014

This study explores the technical details of cycling coal plants, including the problems that can emerge from operating coal plants as intermediate and peaking plants, and which types of technical and operating modifications are needed to enhance flexibility. The document includes a review of the implications of costs and emissions and the replicability of the measures employed at the case study plant.

Quantifying the Value of Hydropower in the Electric Grid: Final Report

Electric Power Research Institute, 2013

This report summarizes a three-year, U.S. Department of Energy commissioned study that assesses the value of hydropower to the U.S. power system for both pumped and traditional plants. The report includes an assessment of the current market structures and costs and ways to increase the value of hydropower.

Potential of Small Hydro Power Plants for Delivering Ancillary Services in Germany

CIRED Workshop, 2012

This case study discusses the potential of small, run-of-river hydropower to provide network frequency and voltage control. Included are estimates of the ability of small hydropower to provide ancillary services. The report finds that failure-free and redundant communication equipment to pool and operate hydropower plants are necessary.

Flexible Generation: Backing up Renewables

Eurelectric, 2011

In this report, the authors explore whether conventional thermal power plants in Europe are flexible enough to support power ramps from wind. The report suggests a system approach to enabling the appropriate mix and levels of flexibility to address various possible scenarios.

Co-optimizing Energy and Ancillary Services from Energy Limited Hydro and Pumped Storage Plants

HydroVision, 2012

This document explores the benefits of expanding co-optimization of energy and ancillary services to hydropower. The author builds off of practices currently enacted for conventional generators and demonstrates that co-optimization improves the economics of hydropower plants.

Power Plant Cycling Costs

Intertek, 2012

The report reviews cycling costs for power pants, including those related to operating generation at varying load levels (on/off load following) and minimal operation levels. The authors provide the typical cycling costs for “flexible” generation, an overview of the systems and components commonly affected by cycling, and mitigation strategies that minimize cycling costs. The costs are based on Intertek’s APTECH database.

Beyond Capacity Markets - Delivering Capability Resources to Europe's Decarbonised Power System

Regulatory Assistance Project and Trilemma 2012

The design of capacity markets is examined in order to provide recommendations for how Europe can best design these markets to encourage flexibility to address high penetration of variable RE. The authors offer several market design recommendations.

Hydropower in Europe: Powering Renewables

Eurelectric, 2011

The report includes both a broader look at the European hydropower market as well as detailed flexibility case studies in the Nordic power system, Austria, Poland, Norway, Germany, Switzerland and Ireland. 

Quantifying the Value of Hydropower in the Electric Grid: Role of Hydropower in Existing Markets

Sandia National Laboratories, 2011

This report examines the broader role of hydropower in the U.S. power system in terms of both energy and ancillary services, and how these roles vary across regions, especially under the context of greater variable RE. The report looks at the drivers and barriers to hydropower generation within these markets.

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