Kevin Geraghty, VP power generation, NV Energy

The art of balancing is nothing new to energy utilities. We continually balance the needs of customers with environmental sensitivities, with regulatory oversight, and with shareholder interests. However, our well-honed traditional equilibrium skills will need to be razor-sharp in this exciting era of growing renewable-energy portfolios.

Balance is especially important in the Desert Southwest, and specifically in the state of Nevada, as we need to strategically assess the benefits of utilizing different types, sizes, and varieties of renewable-energy projects that will benefit customers. NV Energy, for example, has 23 geothermal projects, eight solar projects, five biomass projects, five small-hydro projects, two large wind projects and one waste-heat-recovery project that are either in production or under development. No project in our current 1.2-GW renewable energy portfolio is easy, but each one will benefit our customers, the environment, and our shareholders.

While the benefits seem so apparent, the development of renewable projects is not as easy as we might expect. Balancing the needs of all stakeholders in the siting process is difficult. A state mandate to grow our customer’s renewable-energy supply does not tip the scales in the favor of developers and proponents as many might expect. Careful planning and managing the opposition by groups that oppose all forms of utility-scale energy projects is a balancing act without a safety net.

One of the most significant balance-beam issues, of course, relates to legislated requirements for Renewable Portfolio Standards (RPS) and their related cost impacts. While I firmly believe that the cost of renewable energy will become more and more competitive, most electricity customers throughout the nation don’t fully appreciate the impact that “free wind” and “free sunshine” will have on their individual utility bills.

Obviously, there is a very fine line that companies such as ours must walk—to make sure customers are prepared for higher renewable-energy costs—without our company somehow being perceived as being resistant to renewable-energy growth. Again, another balancing act must be performed.

Other significant situations that require careful analysis and astute balancing skills can be summed up in these questions:

• How much of our renewable energy portfolio should be secured through power- purchase agreements and how much should we build ourselves?

• What is the ideal mixture of wind energy, geothermal energy, solar thermal, solar photovoltaic, biomass, waste heat recovery, and small hydro for our customers and service territory?
• Considering the fact that we have an increasing RPS to meet and that many renewable projects can be delayed, cancelled, or have under-production problems, how much renewable energy should we over-subscribe to assure that we meet the annual stair-stepping RPS requirements?
• Should we take a leadership or a “fast-follower” approach to cutting-edge renewable- energy designs for such opportunities as solar thermal projects with storage capacity, or new methods for integrating solar thermal into our combined-cycle natural gas plants?
• How do we resolve the “chicken and the egg” question about when to build transmission lines to accommodate renewables.
• What is the proper balance between utility-scale renewable-energy projects and home solar or wind applications for individual customers?

Even after we master the issues associated with these types of questions, the largest elephant in the room may be the unanticipated consequences of injecting large amounts of intermittent energy into our local systems or our regional grid. “Balance” will take on a deeper meaning. How can we maintain system balance without cannibalizing our traditional generating assets and reducing efficiencies? In other words, if we start changing the role of base-load units to become renewable-energy responsive load-following assets, what will that do to our maintenance costs? What will be the impact to the plant’s life cycle? Will there be significant losses in operational efficiency? Are there plant safety implications?

The solutions to these and other questions will not come easy. It will take a combination of many solutions to resolve this challenge.  And, it will require cooperation, partnerships and concessions as an industry. The multifaceted solutions undoubtedly include:

• Modifying our existing generation resources to be more flexible to renewable intermittency;
• Seeking greater regional cooperation among individual balancing authorities; and
• Implementing smart-grid technologies—still in the incubation stage—to facilitate seamless integration of renewables in the future.

Albert Einstein once said that “life is like riding a bicycle—to keep your balance, you must keep moving.”  Such is the case with today’s unbalanced challenges surrounding renewable energy. We simply “must keep moving.”

Kevin Geraghty

VP Generation, NV Energy