Maintaining reliability in a 100% decarbonized power sector: The interrelated role of flexible resources

Abstract

Reliability will remain a key requirement for decarbonized power sectors, but also a concern with the high penetration of variable renewable energy (VRE). The traditional approach for reliability is by producing enough energy and adapting rapidly to changes in load with the dispatch of fossil fuel power plants, especially natural gas power plants. However, this will have to evolve as decarbonization progresses. Can various flexibility resources such as transmission, storage and demand response provide the same reliability benefits? This paper uses a detailed, capacity expansion and hourly operation model to investigate the possibility and the cost of reaching different levels of planning reserve margins (PRM), in the multi-regional context of the North American Northeast. We find that while it is possible to entirely avoid natural gas power plants or nuclear ones to obtain high PRM, it would come at a very high cost and would require high levels of transmission, storage and demand response. We also detail why these three flexibility resources are needed in combination. The implications for energy policies are significant: in order for power system's cost to remain reasonable, reliability must count on some carbon-neutral natural gas or nuclear generation, along with interties with neighboring systems, storage and high levels of demand response.