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Resource Planning 101: Challenges of Serving Electricity Demand

Resource Planning 101: Challenges of Serving Electricity Demand. Karl E. Kohlrus, P. E. Power Affiliates Program May 4, 2012. Electricity Demand Characteristics. Electricity demand is driven by Weather Time of year Time of day Economic factors Electricity demand is price inelastic.

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Resource Planning 101: Challenges of Serving Electricity Demand

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  1. Resource Planning 101:Challenges of Serving Electricity Demand Karl E. Kohlrus, P. E. Power Affiliates Program May 4, 2012

  2. Electricity Demand Characteristics • Electricity demand is driven by • Weather • Time of year • Time of day • Economic factors • Electricity demand is price inelastic. • Demand can be altered somewhat by Demand Side Management (DSM).

  3. Electricity Supply and Demand • Electricity must be supplied at the same instant it is demanded. • Unlike other commodities (oil, gas, coal), electricity cannot be easily stored. • Pumped storage hydro is best for large-scale electricity storage, but sites are limited. • Batteries, flywheels and even compressed air can be used for storage.

  4. Electricity Supply • Conventional Generation Resources (Fossil, Nuclear, Hydro) are generally classified as • Base • Intermediate • Peak • Conventional resources can generally be dispatched as needed except when they are on forced or scheduled outage.

  5. Electricity Supply • Renewable resources such as wind and solar both have an energy value and a capacity value. • Solar resources have a high capacity value as they are highly coincident with the summer air conditioning peak demand. • Wind resources are primarily energy resources and have a capacity value of only 5-20% since wind is usually non-coincident with summer peak demand.

  6. Electricity Markets • In many regions organized markets have replaced bilateral transactions between utilities. • Markets are usually Day Ahead or Real-Time. • Prices are Locational Marginal Prices (LMP) based on generation offers and load bids. • LMP = Energy Cost + Congestion Cost + Losses • Prices are based on the marginal energy price and location in the market.

  7. Electricity Markets • Generators offer units at various prices; loads are usually price-takers, but may bid a price where they will curtail load. • The market clearing price is where generation meets the load demand. • All loads pay the price of the highest marginal price unit picked, even if it supplies only a small portion of the total load.

  8. Conclusions • No single technology can meet all of our power and energy needs. • Each technology has its advantages and disadvantages. • It takes a mix of technologies to supply the ever-varying need for electricity.

  9. Questions?

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