CAN EXISTING MULTI-PURPOSE HYDROELECTRIC ASSETS SMOOTH UTILITYSCALE WIND VARIABILITY? Alisha R. Fernandez, The Pennsylvania State University, (206) 491-0392, [email protected] Seth Blumsack, The Pennsylvania State University, (814) 863-7597, [email protected] Patrick Reed, The Pennsylvania State University, (814) 863-2940, [email protected] Overview The integration of large-scale wind energy in the United States will require controllable assets to provide more supplemental energy to maintain electrical reliability. Previous work has identified hydropower as an advantageous asset, due to its flexibility and low emissions production. While many dams currently provide energy and environmental services in the United States and globally, we find that multi-use hydropower facilities would face policy conflicts if asked to store and release water to accommodate wind integration. Methods Specifically, we develop a model simulating hydroelectric operational decisions along a multi-use river system when the electric facility is able to provide wind integration services through a mechanism that we term ‘flex reserves’. We use Kerr Dam in the Roanoke River Basin of North Carolina as a case study, simulating operations under two alternative reservoir policies, one reflecting current policies and the other regulating flow levels to promote downstream ecosystem conservation. Results We find that the magnitude and timing of fill-in power needed to balance the error in the wind power forecast stresses already constrained multi-use reservoirs. Even under perfect information, Kerr Dam faces policy conflicts in providing any substantial levels of ‘flex reserves’ while maintaining release levels consistent with other river management goals. These policy conflicts are exacerbated during periods of low flow. Increasing payments for provision of flex reserves does not solve the policy conflict. Conclusions Our conclusions differ from those of NREL (2012) by suggesting that fundamental water management policy changes for reservoir releases, in addition to pricing reform in ancillary services markets will be necessary to successfully integrate wind and hydroelectric power (see also (16)). Current regulation prices appear to provide little incentive for Kerr to accommodate a large amount of the wind power supply forecast errors. Even if prices are increased substantially, the greater challenge of managing conflicts between energy and water management policies for multi-use dams will not be resolved. The combination of severe drought conditions and strict water management policies based on the business-as-usual and ecosystem services guide curves highly constrain Kerr’s ability to provide substantial amounts of capacity to correct for the wind forecast error. Adjustments to either guide curve will likely need cooperative policy making to reach a compromise policy solution that benefits the multiple constituents involved with Kerr Dam. Results from this study provide the best case scenario for similar multi-purpose dams balancing distinct water and energy policy goals while operating within federal laws that control a reservoir’s operations and services. We suggest that the energy sector should consider the future uncertainty of surface water supplies because it will likely impact the long-term ability for hydropower to provide both base load and supplement energy (such as flex reserves). It is likely that historic water management policies will need to revise individual reservoirs policies in order to use hydropower to compensate for the variability of wind generation across the electrical grid. 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