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Integrating large amounts of renewables into the grid often requires utilities to cycle (i.e., ramp up or down) fossil-fueled plants in order to accommodate the energy resources' intermittent nature. That costs money. However, a new study suggests that a boost in wind and solar power across the Western Interconnection, including 13 U.S. states and some parts of Canada and Mexico, would ultimately save the region's utilities billions of dollars per year in avoided fuel costs.

For the study, the Energy Department's National Renewable Energy Laboratory (NREL) modeled the potential impacts of increasing wind and solar power generation to make up 33% of the western U.S.' load in 2020. The report says that figure translates to a nominal 26% penetration across the entire Western Interconnection.

According to NREL's scenario, the high levels of wind and solar power would lead to cycling costs of $35 million to $157 million annually in the Western Interconnection. For the average fossil-fueled plant, this results in an increase in operations and maintenance costs of $0.47 to $1.28 per megawatt-hour of fossil-fueled generation. That said, the report suggests those costs would be outweighed by a $7 billion reduction in fuel expenses per year across the region.

“Grid operators have always cycled power plants to accommodate fluctuations in electricity demand as well as abrupt outages at conventional power plants, and grid operators use the same tool to accommodate high levels of wind and solar generation,” says Debra Lew, NREL project manager for the study.

“Increased cycling to accommodate high levels of wind and solar generation increases operating costs by two percent to five percent for the average fossil-fueled plant. However, our simulations show that from a system perspective, avoided fuel costs are far greater than the increased cycling costs for fossil-fueled plants.”

In addition, the report says that the carbon emissions induced by more frequent cycling are negligible (<0.2%) compared with the carbon reductions (about 33%) achieved through the wind and solar power generation evaluated.

According to NREL, the study assumes a future average natural gas price of $4.60/MMBtu, significant cooperation between balancing authorities, and optimal usage of transmission capacity (i.e., not reserving transmission for contractual obligations).

The report also notes that it does not consider other factors, such as capital costs of construction for wind, solar, fossil-fueled power plants, or transmission. NREL says those costs are significant, but outside the scope of the study, which focuses on operations.

On average, the report finds 4 MWh of renewables displace 1 MWh of coal generation and 3 MWh of natural gas.

The full report is available here.

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