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What is Energy?

• ENERGY: The ability to do work

– Work: exerting a force on another system over some distance

– Can be transferred/transformed but never created nor destroyed

– Standard (SI) measurement: joule

How is Energy Measured on

Your Utility Bill • Electricity bill measurement:

KILOWATT-HOUR (kWh) • 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

Radiant Energy Chemical Energy

Energy Transformations

Electrical energy Thermal 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 100-watt light bulbs for 1 hour

• Same amount of energy as using one 100-watt light bulb for 10 hours

Orders of Magnitude

Order of

Magnitude

Energy Power

1 Watt-hours (Wh) Watts (W)

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)

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Energy vs. Power – Electricity

Generation • CAPACITY: (nameplate capacity,

installed capacity) The maximum (full-

load) 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)

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

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

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

• 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 and Demand

• 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

• 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

Household Electricity

Peak: ~7 kW

Base demand: <.25 kW

Avg. demand: ~0.5 kW

Daily energy

consumption:

~12 kWh

Base, Intermediate, Peak

Top line: power

demand at any

point in time

(MW)

Colored

area under

graph: total

energy

consumed

(MW x

hours, or

MWh)

Dispatchable/Variable

• 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

Conversion Efficiency

• Energy is lost

(usually as heat)

when converting

from one form to

another

• CONVERSION

EFFICIENCY: Ratio

of useful output and

energy input

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

Graphic Source: The WATT? An Energy 101 Primer from Focus the Nation, 2012

CURRENT: Flow of electrons along a pathway

(conductor, e.g. copper wire)

Electrical Current Discoveries

• 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.

Electrons flow from negative electrode

(anode) to positive electrode (cathode)

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Electromagnetism

• 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

Shake Flashlight

Source: Energy Flows, The NEED Project

Generator

GENERATOR: Converts one form of energy

(e.g. mechanical) to electrical energy

• 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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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)

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)

iClicker Question

• Which of these won the “war of currents”

to become the dominant means of

delivering electricity?

– A) Alternating Current

– B) Direct Current

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

Transmission and Distribution 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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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

(Statistical Yearbook of the

Electric Utility Industry 1971

Edison Electric Institute )

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”

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

• 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

State Restructuring

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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)

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

RTO/ISO Regions 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

• 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)

Power System Decision Time

Scales

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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