 Good afternoon everybody. This is your host Guillermo Salvatier on Perspectives on Energy. Welcome to the show. Today we'll be discussing megawatt hours versus megawatts and how that can be sometimes misleading and confusing, but hopefully we'll clear it up. So again, welcome once again. Again, I am the Director of International Services for HSI, the Health and Safety Institute. And in here, we have entire programs that train the electric grid operators and amongst other different parts of the electric utility industry. This week I am working out of California for some of the utilities here. So I am coming as you live from back of the California. So okay, so today, there have been a few videos out, some of them on ThinkTech as well, and I really enjoyed them. One of them, they were discussing the general output or the demands of energy and how much surface area that would take for electrifying the entire island with solar and then supplementing that with wind and then of course with energy storage and hydrogen. And one of the things that is a great presentation and one of the things that I noticed however was that the way they were presenting the units of energy, it's a very important distinction we need to make regarding the difference between megawatts and megawatt hours or kilowatts and kilowatt hours or terawatts and terawatt hours like the sort of thing or gigawatts and gigawatt hours. So those are all different units, multiples of a thousand higher from each other, but the distinction there is the whole hour term, right, which is really it's the the instantaneous number times whatever unit of time normally we decide to extend that over an hour. And that's how we get the entire area under under a curve. And that gives us the energy hour kilowatt hour, megawatt hour, gigawatt hour feature. Of course you can imagine right if we say instantaneous 100 megawatts that's instantaneous there's no place to store that there's no place to put that away that's happening right now and it could be God the next instant. Whereas if you're consuming that over an hour now you're getting built or you can take account for that whole thing over a span of one hour. So if you're looking at that for 24 hours now you're looking at quite a lot of megawatt hours right now it'll be say it's 100 times 24 you're looking at you know 2400 megawatt hours not just 100 megawatts every hour. So that's the important distinction so when you hear megawatt hours you're going to hear a number many orders of magnitude higher than the instantaneous measurement. So let's go and look at the first slide of a typical load curve of generation versus load right. And on there you see for example and this is of course old school back in the olden days before we had all of that solar and wind in our system as a typical load curve you know for a typical summer day in the system. And as you can imagine right that goes over a span of 24 hours right. So as you as you're imagining there I've got two curves right so one superimposed top of the other or the one in blue is a load which is how much people are consuming or demanding the other red one is basically what your generators are making and then in there you're accounting for a 500 megawatt purchase right over over every hour for 24 hours the entire day right. Okay not that important but we would have but that it matters right as you figure out what is the instantaneous requirement right to be able to meet that load. So at any given point in any given hour at any given minute at any given second right you have to be able to supply the number on any point on that blue line. And that is how you demand for the your instantaneous demand right that's megawatts. So it can be as you can imagine at four or five in the morning that that would be the lowest point while you're looking at maybe 6000 or 5500 megawatts of instantaneous generation at that point that is what you're supplying. Thank you so much. So right there is just but just beneath 6000 megawatts right at four in the morning it's the lowest point of the lowest point of a 24-hour period. Now granted right that is the lowest point and then of course after that it begins to slowly increase right and it continually changes every hour through the next 24 hours and the cycle repeats itself every day. Now if this was a flat line and you take an average of that line over that 24 hours it becomes very easy to calculate and that would be wonderful if the demand was not variable but of course we all know we all sleep we all wake up we all turn things off and on we all have the work cycles we all have different points we're traveling to different parts so you know we start our work day at six seven a.m. everybody begins to wake up and they begrudgingly go go get up and go take a shower turn things on they start going getting their day started and then they maybe cook some breakfast turning lights on and then eventually they'll find out where to work at that point you know things begin to heat up and as things begin to heat up during the day then air conditioning runs turning lights on in the offices or wherever they're at or even if they're at homework from home they're using energy so at every at every time they turn on a light switch they turn on something they turn on a motor turn on a pump or any industrial process they are then of course the the demand for electricity is increasing right and that's the instantaneous demand so but if you notice you're looking already I guess at time index 8 a.m. or 9 a.m. if you zoom into that where are we at that point I think we're looking at maybe 10,000 megawatts instantaneous right so at 10 10 a.m. we're already up to the graph of a six seven eight nine almost 10,000 megawatts at that point right so one thing I want to point out right that everything in the area under those curves right it is the integrated value you're looking at an area under under a curve which is of course any point in that curve times you know whatever time has already elapsed so and that is usually what gets billed or measured or metered and then that that's part of the utility revenue or where they count as you know at megawatt hours produced or kilowatt hours produced right and that is what I often hear right as like hey we are it's it's it's not about the nameplate rating of a unit so if a power plant can produce for example 100 megawatts nameplate rating instantaneous that is its capacity it cannot make more than that it can probably make less but it cannot make more than that and then of course if we then say or boast hey this thing ran for 24 hours and then we say oh we've made 2400 megawatt hours so that is where it becomes misleading it sounds like it's a lot more than it is in reality it can only produce 100 megawatts at any given point in time at any given minute any given second that is a maximum it can put out so when they say when they say capacity right it is important to understand that we call it a mega instantaneous mega watts of capacity when they say installed capacity right it doesn't mean it's always going to run which is what bothers me because if you have a lot of solar resources on an island and it isn't available 24 hours a day you cannot say that you know you have the capacity of x number of megawatt hours because it's not you can say it has capacity of x number of megawatts from anytime between between sunrise and sunset perhaps right and that's probably a more it's not such a disingenuous way of promoting what it is you're trying to accomplish now how's this any different or why does it matter right okay so let's go to the next slide we illustrate the two different analogies right and here you're looking at a one-hour road trip okay so say you have a lot of different say you have two vehicles right and i'm going to call this the odometer as a consumption that's your mega watt hours or kilowatt hours right the man I guess is your speed is the rate at which you can put power out at any any any given point and of course you got a little station wagon and you have the on one side you have the race car on the other so for that little like slower vehicle running at 10 miles per hour a 10 hour road trip it's going to cover 100 miles same odometer same distance it just took a lot longer right now if you look at the race car traveling at 100 miles per hour that same hundred miles can be covered in one hour and that is a difference I'm trying to point out right where it's like kilowatts was kilowatt hours not that that that that description of it as a capacity or the ability to actually like explain what the capability of it is at any instantaneous point it's not exactly accurate and it's important that we when we when we discuss or promote for example the use of renewable resources or actually any resource or any consumption or we explain for example how much was produced now if we talk about production that makes absolutely perfect sense you produce as much or with as much as this much time but it is misleading because when you want to understand you want to understand how much can you support at any given time the instantaneous demand of the megawatts becomes important so if you have for example the peak load of any given day right well if you have a peak load of 20,000 megawatts for your for that season well and you only have 18,000 megawatts available and guess what you will be deficient 2000 megawatts and you will have to shed 2000 megawatts of load because you just don't have enough and that is the important thing you may say you have 20 40,000 megawatt hours available you know but but it's not that the case at that point in time for that minute or that half hour you cannot do it because you just don't have enough online or capacity to be able to satisfy that need so once again this I want to stress the fact that it is important that we clarify the difference between capacity versus consumption or how much energy was delivered or how much energy you can deliver the other thing is as well as that there's always the assumption made that this entire load is flat or has no variability or has for example no change and that is a problem because nothing nothing in this industry really stays flat unless it's baseload and even that lady has been moving so another thing I want to point out right is when we have the situation where we are looking at generation that normally is never dispatched very much like nuclear plants right and in larger in larger utilities and in the mainland there was a time where they would sit at their at baseload which means usually they're they're optimal 95 percent to 100 percent output they would stay there for 18 months and they will come down only if they had an emergency or if they had a a need to come down to refuel and do like the 18 month maintenance outreach so but now I'm seeing certain utilities actually have a day ahead next day dispatch where they will dispatch depending on what the load is and to be able to accommodate what the renewable outputs are for that given day so what does that mean that in this case you're now displacing some generation that is really rather cost effective and and reliable and replacing it with variable solar energy which is wonderful it's it's it's great once a capital expenditure is put in however you are now displacing reliable generation just to accommodate for it and that and then once you shut units off or you dispatch for example large baseload units it is very difficult and expensive to actually have to regulate and move and and do load following in this case so what's the solution for this right so one of the things that I'm noticing is that there have been as we install more and more solar capacity in utility scale solar capacity on the grid we're seeing more and more utility scale solar curtailments where they are basically it's it's an inverter based resource so the they they call the the owner or the producer the utilities call them and they tell us where we cannot absorb any more power and they get to the point where they almost shut off all of their generation to accommodate all the solar and in most parts right you are now at a point where yes we're running completely on solar for about four or five hours the problem is you put yourself in a rather really dangerously unreliable risky posture because now you have to then cut back on the amount of solar so in other words you're basically throwing away or you're you you you have an asset that's being underutilized and you have a great deal of capital expenditure already behind you where you spent all this money on these facilities and now you are not maximizing that asset because there's nowhere to put that power there's no transmission lines to move it anywhere and you don't have enough load to to supply that and then to type out all off there's distributed energy resources which are solar panels and batteries at the customer's house at the residential level which is also cutting down on demand so where is all this headed right well I think the next best thing to do and as utilities and consumers can actually probably work in better partnership overall is to perhaps give well as every single new solar project that I've seen coming online now there's usually a token battery on there not not enough to really make a significant impact but there is a token battery requirement they're fulfilling my expectation is that my hope is that as more and more of them come online they have more batteries already in place and that's hopefully used to be able to absorb that variability right or that excess eventually those batteries are going to get full and they have to push out and into the grid again so we'll see what happens there the other challenge there is the is the distributed energy resources a lot of utilities and a lot of next protestors commissions are changing the tariffs in which some of them are getting away or getting are doing away with that metering because there's nowhere to put that solar energy so now now you don't have enough loads to be able to like absorb those utility scale solar sites and a lot of the residential distributed energy resources are pretty much supplying their own load by using their own solar panels which is great right but the problem is now you don't have load you don't have any so you have to shut that all this generation and if you have anything happen and you have to or a lot of variability and you have to turn generation back on it doesn't happen in a drop of a hat it's not like a light switch it takes 15 20 minutes to bring on a generator so this becomes a problem right so ideally batteries would would be an ideal source however you know there were still quite a ways away from making a lot of them commercially viable and many of them don't run for more than a few hours anyway and so that's another challenge on the system so what's happening here is that we're noticing a shift away from this or slowing down and perhaps more accountability as to what the true cost of these resources are and a few weeks ago I did another episode on what's happening with the regulatory environment so as you probably remember NERC on its own has a NERC of course in the industry have changed some of the regulations and they lower the threshold as to what is now subject to regulation and it's going to be in effect quite soon so as independent power producers or rather sites that own solar generation facilities right they will now be subject to the NERC regulation and that on its own for some of them has been quite discouraging but it's only because they don't possibly understand what the scope of NERC regulation is it shouldn't be anything really intimidating and it's really not hard not hard to comply with that it's just a matter of making sure that they don't create a reliability risk in the system so um so we have different challenges but when I think with the right kind of like uh step design that we can implement whenever we're putting into resources we probably are going to have to figure out a way to um either store a lot of this excess energy or have some of the utilities in partnership with the customers and some of these like independent power producers go ahead and figure out a way to better manage these resources otherwise you're going to have all of these like independent power producers which are usually private privately owned generators not owned by the utilities right and then they're going to go ahead and place these things in service and they will not be getting paid for megawatts right because they will be producing megawatts because they will be asked as a as a reliability requirement to curtail their output and as more and more of them come on you're going to get to the point where there's way more generation and there is low altogether so not only are you are you replacing the utility with these resources for certain parts of the day now it gets to the point where there's nowhere to put these megawatts at so that it's in itself is becoming a problem so what do you think will happen next right so ultimately so if you invest all this money in an asset that you're not allowed to run because nobody can buy your resources because there's nowhere to nowhere to place it then eventually you will get out of that business and my fear is that it becomes less and less attractive for investors to go ahead and install these like solar facilities at the utility scale and it's already becoming a problem for some of these like really of some of these distributed energy resources for rooftop solar companies to actually make it profitable in California for example there's I think there's legislation in place or it's become going to be in place pretty soon where multifamily housing units or if you're a landlord or what's happening is case in point if you're a renter of a single family home and a single family home has solar panels you as the renter cannot benefit from that solar solar power production of your of that roof it's owned by the landlord and the landlord sells that to the utility and then you get to buy a retail price retail price energy for your consumption so that sort of it that sort of challenge is interesting because now that puts a dent and it makes daily solar panels less attractive specifically for the renters the other problem you're going to encounter of course is a it's a disparity in equity right so now it's you know only homeowners can get to enjoy the benefits of solar panels landlords get to enjoy so you know the benefits of solar or distributed energy resources or solar panels on the rooftops and you can probably imagine what's where that's going to lead at some point right so a lot of challenges here where I think we can we can probably overcome them with a little bit better planning better coordination but again a lot of that is really in effect need to understand what demand is we need to understand what load is we need to understand what capacity is and of course we need to understand that you cannot generate power right now more than what you need unless you're storing it somewhere right that's the other thing that's an interesting so you can only go to zero zero you can only run generation that you need for your load otherwise has to go somewhere else and when you over generate generation you have problems in frequency voltage when you under generate which a lot of that variable resource introduces problems like that into the system you will of course have under frequency under voltage when you under generate so hopefully this will clear up some items I think that I really applaud some of the efforts made especially with Hawaii and how they're installing a lot of this rooftop solar and utilities go solar but we also need to be very careful one thing I wanted to point out is that there are geothermal facilities in Hawaii already that are only running at maybe 30 40 capacity so part of that problem is because there's nowhere for that power to go there's no submarine cables connecting all these different islands to all these different loads that they could serve so ideally just these two plants alone will probably serve most of the islands together but again there there's there's nowhere to put them and I think those facilities were built with under the notion that there was going to be a submarine cable installed at some point several cables were still at some point interconnecting all the islands but that didn't happen forget the fact that there's already lots of undersea cables already in place for communications and other purposes but somehow there's always a challenge to get that approved and built and then have somebody commit to that kind of like an investment against hopefully that one day it happens and I think that that's a great resource to have geothermal it's also a great idea to have diversity in your portfolio and I'm off for hydrogen hydrogen production hydrogen power just to make it just well I want to make sure that it's commercially viable I know that the next era energy and fpnl is already in december they are going to actually go commercial on their first site which I'm pretty excited to see and I'm hopeful that you with that that is a good benchmark and you'll see that throughout the industry so I'm looking forward to that and hopefully we can all learn from that all right well so thank you all again for tuning in I know this was a shorter episode than usual and I have a lot of information on this rather like narrow topic but if you have any questions please feel free to write them in the comments and once again thank you thank you for tuning in and have a wonderful day