Understanding the Grid Value Proposition of Marine Energy: An Analytical Approach
The US Department of Energy’s Water Power Technologies Office (WPTO) has tasked two national laboratories, Pacific Northwest National Laboratory (PNNL) and National Renewable Energy Laboratory (NREL), to develop an understanding of the grid value proposition for marine renewable energy (MRE): how harnessing the energy of waves, tides, and ocean currents could be a meaningful and competitive source of renewable energy in the future grid.
This work will provide insights to the conditions under which MRE technologies offer unique benefits for the electricity system. PNNL and NREL will conduct a project to comprehensively review the grid value for marine renewable energy development at scale on an intermediate- to long-term horizon. The project will dovetail with nationally-accelerating valuation efforts to characterize and quantify specific services from energy resources and assess the value of those services over time. It will capitalize on the emerging concept of locational value, especially for distributed energy resources (DER), referencing adopted frameworks and related laboratory analysis. And it will take advantage of laboratory expertise in a variety of disciplines – ocean physics, mechanical and electrical engineering, energy economics – chained together in order to ensure that benefits and services assessed are realistic for MRE technologies and ocean energy resources.
The purpose of the immediate analytical approach is to outline the landscape of MRE attributes and their potential value and, at a high-level, discuss methods to quantify these values. For purposes of this investigation, the words grid value should be broadly construed. The term is meant to include, but not be limited to, provision of a defined grid service, measurable benefit to grid performance, avoided costs to system investments or operations, revenue capture, and contribution to desired grid qualities (e.g. reliability or low carbon intensity). Value can also accrue to a range of entities.
The authors intend to consider use cases and system benefits where MRE may have a competitive or unique role; and where there is a distinct and measurable value additional to energy production. To do this, the authors look beyond the typical values of energy production (a payment of cents per kilowatt-hour produced) and instead to “grid services,” those services required for the grid to operate and deliver energy to customers (i.e. unit scheduling and dispatch, reactive power and voltage control, and frequency control). Certain grid services are captured in the traditional suite of ancillary services that may be directly compensated in an organized market, and as a result many of these benefits already have highly competitive contributing generators or other electricity system assets. Therefore, in this initial exercise of considering competitive and unique benefits, the authors are less concerned with the energy (or grid service) production itself but the timing, the location, or the system condition that form measurable and distinct value.
Revised: November 1, 2019 | Published: September 2, 2019