Today, the current regulatory practice for solar and wind-generated electricity favors maximizing production at all times. The companies that operate these facilities seek to sell all their output at the highest prices, so curtailing output is seen as a revenue loss.
That old operational idea inhibits the transition to relying on solar and wind as firm, on-demand sources, since all their output is used only when it is available. This approach also keeps renewable energy at the margin.
How would a grid with overbuilt solar and wind resources work in practice? Let’s say the operator of a regional electricity grid needs X megawatt-hours/day to meet demand. Today the solar farms in that region can meet or exceed this demand only on days of the highest production, such as clear days in the summer. On other days, the production gaps are met by storage.
By contrast, when the solar resource is oversized, that solar generator can meet the X MWh/day demand more days of the year and there are fewer gaps – hence there are fewer times that energy storage is need to fill the gaps.
Once firmed up through a combination of overprovisioning and storage, variable renewable energy resources become effectively dispatchable – able to provide power when as needed – and functionally equivalent to traditional power plants. In this way, renewables can replace these generators without major grid reengineering.
Our team has modeled a high-solar and overbuilt solution for the not particularly sunny state of Minnesota. The goal was to determine the least costly combination of grid-connected solar, wind and storage necessary to provide round-the-clock, year-round energy services.
The study demonstrates that overcoming the natural variability of solar and wind can be accomplished at costs below current grid costs (so-called “grid parity”) by overbuilding solar and wind resources and adopting a grid operating strategy of allowing about 20% to 40% curtailment of excess energy generation. Energy storage is also used in our model, but the superior economics directly result from substituting excess curtailable generation for more expensive storage.