7/15/2014
What is Energy?
• ENERGY: The ability
to do work
• Electricity bill measurement:
KILOWATT-HOUR (kWh)
– Work: exerting a force
on another system
over some distance
– Can be
transferred/transforme
d but never created
nor destroyed
– Standard (SI)
measurement: joule
• 1 kWh = 3.6 million joules
(megajoules)
• 3412 BTUs in one kWh
– 1 BTU (British Thermal Unit) is
the heat from one match
• Gas bill measurement:
THERMS or cubic foot
– 100,000 BTUs in one Therm
Many forms of energy
– Radiant (e.g. sunlight)
– Chemical (stored in chemical bonds – e.g.
plants, fossil fuels)
– Nuclear (stored in bonds of nucleus – e.g.
nuclear power)
– Thermal (heat)
– Mechanical (e.g. machines)
– Electrical (electrons moving along
conductor)
Energy Transformations
Electrical energy
How is Energy Measured on
Your Utility Bill
Thermal Energy
Energy Transformations
Radiant Energy
Chemical Energy
Energy Sources
• PRIMARY ENERGY SOURCE: Energy
in the form that it is first accounted for
before transformation to other forms of
energy
– What we typically say when we talk about
“energy”
• Fossil fuels (coal, natural gas, petroleum)
• Uranium
• Renewable sources (biomass, wind, solar,
hydroelectric, geothermal, etc.)
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Power
• POWER: Rate (measured in energy and
time) of energy transfer
– Standard (SI) measurement:
Watt (W) = 1 joule per second
– Power = Energy/Time
• Energy = Power x Time
Energy vs. Power
Graphic Source: The WATT? An Energy 101 Primer from Focus the Nation, 2012
Energy vs. Power – Electricity
Consumption
• Toaster consumes a constant rate of
~1000 watts, or 1 kilowatt (1 kW) of
electrical power when running
– If I leave toaster running for 1 hour, I’ve
consumed 1 kilowatt-hour (kWh) of
electric energy
• 1 kilowatt x 1 hour = 1 kilowatt-hour (kWh)
• Same amount of energy as using ten 100watt light bulbs for 1 hour
• Same amount of energy as using one 100watt light bulb for 10 hours
Orders of Magnitude
Order of
Energy
Magnitude
1
Watt-hours (Wh)
Power
1 thousand Kilowatt-hours (kWh)
Kilowatts (kW)
1 million
Megawatt-hours (MWh)
Megawatts (MW)
1 billion
Gigawatt-hours (GWh)
Gigawatt (GW)
1 trillion
Terawatt-hours (TWh)
Terawatt (TW)
Watts (W)
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Energy vs. Power – Electricity
Generation
• CAPACITY: (nameplate capacity,
installed capacity) The maximum (fullload) output of power that a power plant
can deliver under ideal conditions
– Actual power delivered can be different
• Depends on weather conditions,
economics/market dynamics, demand,
maintenance/repair, flexibility of power plant
(able to ramp up and down power output)
iClicker Question
• Which of these power plants is most
likely to run near their capacity (max
output) most of the time (~90%)
– A) Natural gas
– B) Wind turbine
– C) Nuclear
– D) Solar PV
Capacity Examples
Power Plant
Capacity
Toasters
Households
Point Beach
Nuclear Plant –
2 reactors
~1 gigawatt (GW)
(1 billion watts)
1 million
toasters
800,000 households
West-Campus
Cogeneration –
2 gas turbines
~150 megawatts (MW)
(150 million watts)
150,000
toasters
120,000 households
Epic’s Galactic
Wind Farm –
6 turbines
~10 megawatts (MW)
(10 million watts)
10,000
toasters
8,000 households
Solar Array on
Wisconsin
Energy Institute
Roof
~20 kilowatts (kW)
(20 thousand watts)
20 toasters
16 households
Energy vs. Power
• GENERATION: amount of electric energy
a power plant produces over a period of
time
• CAPACITY FACTOR: the ratio of the actual
output of a power plant over a period of
time and its potential output if it had
operated at full capacity the entire time
– The closer to 100%, the closer it is to running
at full power all the time
Why Capacity Factor Matters
Load and Demand
• Power plants with low fuel costs
(traditionally coal & nuclear) are more
efficient to run all the time and generate a
lot of electric energy (high capacity factor,
above 70%)
• Power plants with higher fuel costs or more
flexibility (traditionally gas) run less often
(lower capacity factor)
• Wind and solar power vary based on
weather/sunlight conditions (lower capacity
factor)
• LOAD: device or customer that receives
power from the electric system.
• DEMAND: the measure of power that a
load receives or requires
• Often used interchangeably
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Load and Demand
Household Electricity
Peak: ~7 kW
• Demand must always be instantaneously
met by supply
• Limited storage means power plants vary
their output to meet demand
• BASE LOAD DEMAND: average minimum
customer electricity demand level
• PEAK LOAD DEMAND: customer
electricity demand level that is significantly
above base load demand
Base, Intermediate, Peak
Conversion Efficiency
• Energy is lost
(usually as heat)
when converting
from one form to
another
• CONVERSION
EFFICIENCY: Ratio
of useful output and
energy input
Avg. demand: ~0.5 kW
Base demand: <.25 kW
Dispatchable/Variable
Top line: power
demand at any
point in time
(MW)
Colored
area under
graph: total
energy
consumed
(MW x
hours, or
MWh)
Daily energy
consumption:
~12 kWh
• DISPATCHABILITY: the ability of a
generating unit to increase or decrease
generation, or to be brought on line or shut
down at the request of a utility's system
operator
• Wind and solar not considered
dispatchable in current framework, though
output can be forecast based on weather
• Variability of wind and solar can be met
with storage or dispatching of other power
plants
iClicker Question
• In a typical coal plant, about how much
energy is lost as heat when burning coal
to generate electricity?
– A) 1/4 of energy is lost as heat
– B) 1/3 of energy is lost as heat
– C) 1/2 of energy is lost as heat
– D) 2/3 of energy is lost as heat
– E) 3/4 of energy is lost as heat
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Conversion Efficiency
Generator
Conversion Steps
Typical
Efficiency
Coal Power Plant
Chemical>Thermal>
Mechanical>Electrical
35%
Natural Gas Combined
Cycle Power Plant
Chemical>Thermal>
Mechanical>Electrical
60%
Solar Photovoltaic Cell
Radiant>Electrical
20%
Consumer
Conversion Steps
Typical
Efficiency
Incandescent Bulb
Electrical>Radiant
5%
Electric Motor
Electrical>Mechanical
80-90%
Electric Power Generation,
Transmission, and Distribution
• GENERATION—process of creating
electrical energy from other forms of
energy
• TRANSMISSION—the bulk transfer of
high‐voltage electrical energy from its
source at generating plants to substations
• DISTRIBUTION—the transfer of high
voltage electrical energy from substations
to the end customer
Current Electricity
CURRENT: Flow of electrons along a pathway
(conductor, e.g. copper wire)
Graphic Source: The WATT? An Energy 101 Primer from Focus the Nation, 2012
Electrical Current Discoveries
Electrons flow from negative electrode
(anode) to positive electrode (cathode)
• 1800 Alessandro Volta of
Pavia develops the first
“voltaic battery.”
• 1807 Sir Humphrey Davy
improved and expanded
on Volta’s design, and
developed the first arc
light to run off
of his battery.
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Electromagnetism
Shake Flashlight
• Q: How does shake flashlight
create electricity without a
battery?
• A: Induction: moving a magnet
through a conductor (coiled
copper wire) induces a current
(causes electrons to flow)
– Also works the other way around
• Discovered by Michael Faraday
in 1831
– Basis of most electrical
generators and electric motors
Generator
GENERATOR: Converts one form of energy
(e.g. mechanical) to electrical energy
Source: Energy Flows, The NEED Project
• Q: What turns the
generator?
• A: TURBINE: a machine for
generating rotary mechanical
power from a fluid flow (air,
steam, water)
–
–
–
–
Steam turbine (Coal, nuclear)
Gas turbine (Natural gas)
Wind turbine
Hydroelectric turbine
(waterwheel)
– COMBINED CYCLE: Steam
and gas turbine (natural gas)
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7/15/2014
Current and Voltage
• CURRENT: The number of electrons
pushed through the circuit is the current
– measured in amperes (amps)
• VOLTAGE: The “pressure” that pushes
these electrons through the circuit is the
voltage – measured in volts
• Power = Current x Voltage
– (1 watt = 1 amp x 1 volt)
iClicker Question
• Which of these won the “war of currents”
to become the dominant means of
delivering electricity?
– A) Alternating Current
– B) Direct Current
Transmission and Distribution
AC vs. DC
• AC=alternating current
• DC=direct current
• In DC, the current always
flows in one direction
• In AC, the current flows
back and forth
• It reverses direction 120
times per second, or 60
full cycles per second (60
Hz)
Why AC?
• It is easy to change the
voltage of AC, and we
lose less power if we
transmit electricity at high
voltage
• So we:
– Generate electricity at low
voltage
– Step it up for transmission
(> 120,000 Volts)
– Step it down for
distribution (1,000 Volts)
– Step it down before it gets
to our home (120 V)
Transformers (like pictured)
“step up” or “step down”
voltage using induction
AC Issues
• All generators are synchronized at 60 Hz
– When wide area blackouts occur, systems
must go through BLACK START: the
process of restoring a power plant to
operation without synchronizing from the
external transmission network
• Once a “black start” generator is operating,
others must synchronize with it
• At same time, demand must be brought back
online (requires tight coordination)
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7/15/2014
Natural Monopoly
ECONOMIES OF
SCALE: Average
cost per unit goes
down as you
increase production
AC allows electricity
providers to build
large plants and
spread costs over
larger set of
customers, thus
reducing average
cost per unit of
electricity
Utility Regulation History
• Early utilities consolidated
• Economies of scale – natural monopoly
– Large fixed costs relative to variable costs
– Large capital investments paid off over decades
• Electricity considered a “public utility”
• Regulators step in to ensure fair price,
reliability
– WI Railroad Commission becomes first state to
regulate electricity in 1907 (later becomes Public
Service Commission)
Regulatory Compact
– Utility is granted exclusive service territory
– Utility can set rates to recover costs and
earn rate of return for investors
– Regulators must approve rates and have
access to utility “books”
– Utility is obligated to provide low-cost,
reliable power to all within territory
Traditional Cost-of-Service
Regulation
• State Commission reviews rates and
approves new construction projects
• Rate case: semi-judicial hearing to
determine rates
• Rates set to recover costs on capital
investments and operating expenses
– “Used and useful,” “Prudent investment”
concepts
– “Allowed rate of return”
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Electricity Prices/Demand
Golden Era for
Electricity:
Increasing
use,
decreasing
prices
What’s changed?
• Thermal efficiency of plants reaching
practical limit given current
technology
• Small natural gas turbines could
compete
• Demand for electricity has slowed
• Concerns about pollution/climate –
costs being recognized
• Averch-Johnson effect: rate
regulation incentivizes “gold plating”
(Statistical Yearbook of the
Electric Utility Industry 1971
Edison Electric Institute )
Slowing Electricity Demand
Moves toward
Deregulation/Restructuring
• Traditional vertically integrated utility
(generation, transmission, distribution,
retail) no longer considered a monopoly
in all areas
– Greater interconnection along transmission
lines
– Generation and retail opened up to
competition
• Opened up in high-priced states
– Transmission and distribution (“wires”) still
considered monopoly
– Utilities take different forms (“wires only,”
“retail only,” etc.)
Changes in Regulation
State Restructuring
• Public Utilities Regulatory Policies Act
(PURPA) – 1978
– Encouraged independent power producers
(IPPs) and combined heat and power to sell
to utilities
• Energy Policy Act of 1992
– Encouraged wholesale power competition
• State-by-state restructuring/deregulation
– Opens retail up to competition
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7/15/2014
FERC Orders – Wholesale
Market Competition
• Orders 888 and 889
– Required transmission owners to provide
nondiscriminatory access to transmission
lines
• Order 2000
– Established framework for regional
transmission organizations (RTOs)
RTO/ISO Regions
RTOs/ISOs
• Ensure non-discriminatory access to the
grid
• Monitors operation of grid (but does not
own it)
• Administers wholesale markets (dispatch
and scheduling)
• Engages in long-term transmission
planning
• Voluntary
MISO & PJM
• MISO: Midcontinent Independent
System Operator
– Covers much of Midwest (including
Wisconsin)
– Some states restructured
• PJM Interconnection
– East Atlantic states (OH, PA, NJ, MD, VA,
WV, DE)
– Many states restructured
• Both operate wholesale markets, slightly
different rules
Wholesale Markets
Power System Decision Time
Scales
• Long-term contracts
• Day ahead market (when most
generation is scheduled)
• Real-time market (5 minute)
• Financial Transmission Rights (FTRs)
• Ancillary services
• Capacity market (PJM)
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Day-Ahead Market Operation
• RTO forecasts generation needed for
next day
• Generators bid into market
– Provide X number of MWh at $X
• Once capacity reached, the last
generator that bids (marginal)
determines the “clearing price”
• All generators paid clearing price
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