IEEE Power & Energy Magazine - November/December 2021 - 44

types of conventional generation and storage resources. The
flexibility, adaptability, and control capabilities these complementary
systems provide enable hybrid resources to effectively
offer another form of risk hedging. If a hybrid resource's
capabilities and services become less valued, the asset can
be upgraded at a modest cost (often with software changes,
additional storage, and alterations within the resource itself)
to emulate a different source that is more highly valued. This
flexibility is unique in power systems and perhaps indicative
of what we would expect to see as digitalization through
power electronics, digital controls, digital communications,
and advanced software analytics becomes pervasive on both
the supply and demand sides of energy delivery.
Changes in the electricity sector are increasing the
value of being able to reprogram, reconfigure, and upgrade
a hybrid resource to adapt to new services and revenue
streams, even those that cannot be identified today. This
flexibility reduces the risk that an investment in any given
technology could become stranded and devalued. While the
added cost of hybrids may appear to be somewhat " nonoptimal "
under current optimization methods, a slightly longerterm
and more circumspect view of the changing landscape
in the electricity sector may lead to a more favorable view.
Companies that develop, invest, and contract for energy
and services from large-scale power plants appear to be
making this calculation and committing to this value
proposition with their choices of contracting and building
hybrid resources. Their investments may be due to a welldefined
financial hedging analysis or the attraction of viewing
hybrid resources containing storage and variable RE
technologies as a better " near-firm renewables " product. It
may be their belief that current models and projections are
not able to fully analyze long-term risk during a period of
unprecedented grid transformation. While difficult to anticipate,
it is likely that all these factors play a role and that
different investors and contracting parties value some more
than others. But as is often said, the customer is always right,
so the huge investments allocated to hybrid resources must
be viewed and considered very seriously.
Concluding Thoughts
The activities of the power sector are a microcosm of the " real
world " in that we all bemoan the inefficiencies and imperfections.
We do not know the future, and it is prudent to value
optionality. Whether viewed from the context of engineering,
economics, policy, government, social equity, or any other
lens, inefficiencies, compromises, and imperfections emerge.
Some may view the natural world as the archetype of how
complex interacting systems could be more holistic, but when
examined more closely, even nature is filled with pragmatic
" good enough " choices and evolutionary quirks that work but
may seem somewhat inefficient.
So, as our complex power systems evolve, why should
we expect anything different? The choices of societies and
44
ieee power & energy magazine
the policies of governments may not be perfect, but they are
pragmatically transforming our energy systems. The models
we use for planning and simulating future scenarios are
wonders of mathematical optimization and will continue to
advance and be useful tools, but they are based on assumptions
and simplifications (including about participant behaviors
and choices) that are, at best, incomplete. The traditional
views of system operations are struggling in the face
of much larger and diversified portfolios of resources with
individualistic behaviors.
The rapid emergence of various forms of virtual power
plants that focus on a less centralized concept of energy
resources may be a logical outcome of evolutionary pressures
in light of changing technologies and societal expectations.
The hybrid resources discussed in this article are a
simple version of the virtual power plant idea, where the
generation, storage, power electronics, and controls reside
at a single physical location with one point of interconnection
to the transmission grid. The most prevalent of these
consists of PV solar panels as generation, lithium-ion batteries
as storage, inverters and power electronics, and software
(and its accompanying analytics) as the high-level controls.
This combination is just one instance of hybrid resources,
and they are just one instance of virtual power plants, but the
successful use of such resources provides an important pathway
to more general cases that will be increasingly prevalent
in future power systems.
For Further Reading
R. Wiser et al., " Hybrid power plants: Status of installed and
proposed projects, " Lawrence Berkeley National Laboratory,
Berkeley, 2020. [Online]. Available: https://eta-publications.lbl
.gov/sites/default/files/hybrid_plant_development_2020.pdf
" Digital decarbonization: Promoting digital innovations
to advance clean energy systems, " Council on Foreign Relations,
New York, 2018. [Online]. Available: https://www.cfr
.org/report/digital-decarbonization
Biographies
Mark Ahlstrom is with NextEra Energy, St. Paul, Minnesota,
55108, USA.
Jacob Mays is with Cornell University, Ithaca, New York,
14853, USA.
Eric Gimon is with Energy Innovation, San Francisco,
California, 94111, USA.
Andrew Gelston is with Ascend Analytics, Boulder,
Colorado, 80302, USA.
Caitlin Murphy is with NREL, Golden, Colorado,
80401, USA.
Paul Denholm is with NREL, Golden, Colorado, 80401, USA.
Greg Nemet is with the University of Wisconsin, Madison,
Wisconsin, 53706, USA.
p&e
november/december 2021
https://www.eta-publications.lbl.gov/sites/default/files/hybrid_plant_development_2020.pdf https://www.eta-publications.lbl.gov/sites/default/files/hybrid_plant_development_2020.pdf https://www.cfr.org/report/digital-decarbonization https://www.cfr.org/report/digital-decarbonization
IEEE Power & Energy Magazine - November/December 2021

Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - November/December 2021
