Optimal replacement of coal with wind and battery energy storage

Abstract

Electric utilities are considering replacing their coal power plants with renewables and energy storage to reduce emissions. However, they have also expressed concerns about operational changes and system reliability brought by these replacements. Utilities in remote rural areas face more challenges as they also face energy insecurity while having limited interconnections to wider systems and reliance on imported fuels. Therefore, it is critical for remote utilities to understand different coal replacement approaches and their impacts on system expansion, operation and energy security. In this paper, we define and investigate three approaches to replace coal using wind and batteries: (1) replacing exact coal generation, (2) replacing at least coal generation, and (3) replacing total energy provided by coal. We develop a case study inspired by the small remote grid in Fairbanks, Alaska, which has a single limited interconnection with the grid south of it. We utilize a power system expansion and economic dispatch model that co-optimizes the capacities of wind and batteries required for each approach and the hourly dispatch of energy and reserves for one year. We further analyze the operational cost variability under fixed and fluctuating fuel prices. We find that replacing the exact coal generation requires minimal operational changes, but also significantly more wind and battery capacities. In contrast, replacing total energy provided by coal induces more cycling in other resources, challenging grids with limited flexibility-providing resources. However, replacing total energy provided by coal allows more generation variability in response to fuel price fluctuations, enhancing energy security.

Keywords

• renewable energy
• energy storage
• power system planning
• energy security
• remote electricity grids