Pathways to decarbonization: ZECs, DERs, and inertia

Ross Baldick Consulting

Brad Jones (left) and Ross Baldick at the Austin Electricity Conference.

Decarbonization was the theme of the seventh annual Austin Electricity Conference, held April 20 and 21 by the UT McCombs School of Business, Cockrell School of Engineering, LBJ School of Public Policy, and School of Law.

As the name implies, decarbonization entails shifting the fossil fuel mix toward less intense producers of carbon dioxide together with reduced reliance on fossil fuels for electric generation over time. Our questions: How to implement a zero-carbon grid from a legal and policy perspective? How to achieve it from a technical perspective?

It was my pleasure to introduce keynote speaker Brad Jones, who has been an electricity industry executive for more than three decades. I first began to know Brad closely when he was Vice President for Generation Development at TXU. We  disagreed on whether to implement the nodal market, and I remember his graciousness and intelligence during that debate. He then became Vice President for Government Affairs at Luminant, the successor generation firm of TXU. He joined ERCOT as COO in 2013 and in 2015 became President and CEO of the New York ISO (NYISO), which operates the state’s wholesale electricity market and is responsible for its bulk electric system reliability.

Lower carbon dioxide emissions, green technology, and renewables, Jones said, have become front and center in New York, even making it into the headlines of The New York Times. At the NYISO, priorities include decarbonization, integration of high levels of renewables, and creating a two-way grid. The state is introducing a requirement for electrical load-serving entities to purchase zero emissions credits (ZECs) in proportion to their statewide load, with proceeds going to eligible nuclear power plants. This provides market-compatible support for nuclear generators that values their zero carbon emissions, complementing analogous schemes for renewable resources. He emphasized that ZECs are designed to be a bridge to the future, and that New York is not expecting that ZECs will be needed forever. The state, in other words, is acknowledging the social cost of carbon.

Jones also discussed distributed energy resources (DERs). We need, he said, to value the contributions of DERs, by: 1) facilitating compensation through transparent pricing and metering, and 2) offering financial credit for reducing the load on distribution systems.

Jones concluded by emphasizing the need to internalize a carbon price into the wholesale market. That price will help to do two things. First, to guide operational decisions toward existing low-carbon resources. Second, to guide capital decisions — such as building more low-carbon generation in New York and building new transmission to bring Canadian hydro power to the state.

RossBaldick.com

Brad Jones (left) and Ross Baldick at the Austin Electricity Conference.

On my panel, “Managing the Decarbonized Grid,” we discussed the technical challenges of operating an electricity grid with low or zero emissions. I emphasized that these challenges depend on the mix of resources used. (Click here to download my introduction and the panelists’ introductory remarks.)

For example, our main path to decarbonization in recent years has involved renewable resources such as wind and solar, which are generally connected to the grid via power electronic converters. Power electronics interfaces have a crucial difference with traditional grid-connected rotating machinery in that they do not “natively” provide inertia. Inertia has been essential in the control of the electricity system since its inception, because it enables stable synchronization of the electric waveforms in the grid and serves to limit the rapidity of changes after a disturbance. In order to decarbonize with renewables, we need to deal with this reduction or elimination of inertia.

One solution is to utilize the renewable resources to “synthesize” inertia using the flexibility of their power electronic converters; however, the drawback here is that some of the renewable production is sacrificed. A second solution, being developed and tested by panelist Brian Johnson of the National Renewable Energy Laboratory in Golden, Colorado, explores controls for power electronic converters that do not rely on inertia to provide synchronization.

Click here to access all four of the conference panels.

About Ross Baldick

Electricity is an increasingly complex industry in the midst of transition to renewables and decarbonization. Using my 25 years’ experience as an engineer, policy analyst, and academic, I help my consulting clients think through their toughest technical challenges and formulate their best business strategies.
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