Assessment of the North

American Bulk Power System A Reliability Perspective on Future Needs and Challenges

John Moura, Director – Reliability Assessment

Electricity Security Action Plan (ESAP) Workshop October 01, 2013

RELIABILITY | ACCOUNTABILITY 2

About NERC: Mission

• Develop and enforce reliability standards

• Assess current and future reliability

• Analyze system events and recommend improved practices

• Encourage active participation by all stakeholders

• Accountable as ERO to regulators in the United States (FERC) and Canada (NEB and provincial governments)

To ensure the reliability of the North American bulk power system

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BPS vs Distribution

Generation Transmission Distribution

Over 5,000 plants

Over 20,000 EGUs

Over 460,000 miles

>100kV Over 1,000,000 miles

65% of average customer

monthly bill

5% of average customer

monthly bill

30% of average customer

monthly bill

Employs approximately

120,000 people

Employs approximately

15,000 people

Employs approximately

400,000 people

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NERC Overview: Assessments Areas

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Background

• Peak demand forecasts

• Resource adequacy

• Transmission adequacy

• Key issues - emerging trends trends

Technical challenges

Evolving market practices

System elements/dynamics

Potential legislation/regulation

• Regional self-assessment

• Ad-hoc special Assessments

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Risk Assessment for Emerging & Standing Issues

6

Emerging Issues Risk Evolution:

Consequence

Lik

elih

oo

d

High

HighLow

Environmental Regulations

Natural Gas Dependency

Transmission Siting

Change in Resource Mix

Demand-Side Management

Nuclear Generation

Economy Issues

1-5 Years 6-10 Years

Variable Generation

Models

Lik

elih

ood

Consequence Lower

Higher

Higher

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• Significant Loss of Fossil-Fired Generation Capacity ~70 GW of confirmed retirements/derates (2012-2023)

• Increases in Variable Generation ~20 GW of on-peak capacity (2023); wind and solar

• ERCOT (Texas) below Target Reserve Margin throughout

• Demand-Side Management to offset 80 GW of 2023 peak demand Penetration levels highest in PJM and MISO, ~12% of peak demand

• Nuclear Generation Retirements

• Increasing Dependency on Gas-fired Generation 70-100 GW to be added; Total of nearly 500 GW by 2023

2013 Long-Term Reliability Assessment Preliminary Key Findings

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Uncertainty in the Future Calls for More Probabilistic-Based Analysis

• Common-mode failures and contingencies (beyond N-1)

Increasing variable generation and system dynamics

Interruption of gas deliver / catastrophic failure of pipeline transportation (force majeure curtailments)

• Transmission limit representations

• Fundamental changes in generation characteristics

• Stakeholder consensus for Reserve Margin targets

Paradigm shift recognizing limitations and potentially misleading deterministic planning targets

Potential increases in energy-limited systems

• Consistent definitions of reliability planning criteria:

Loss-of-Load and “1 in 10”

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Probabilistic Risk Assessment: Resource and Transmission Planning

• Generation & Transmission Reliability Planning Models Task Force (GTRPMTF) was organized in January 2009 to develop composite G&T modeling methodology for assessing resource adequacy

• Successful execution of a long-term probabilistic-based reliability assessment is a significant step forward in determining future reliability of the bulk power system in North America

Provide a common set of probabilistic reliability indices

Recommend probabilistic-based work products

Completed the very first continent-wide probabilistic assessment (2013)

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Key Finding: Fossil-Fired Generation Retirements

Significant Fossil-Fired Generator Retirements Over Next Five Years

• Cumulative retirements between 2012 and 2022

• Slightly larger impacts than our 2011 generator retirement study

6 13

18 23

37 42 42 43 43 44 44 45

1

4

5

9

12

22 23 24 25 25 26

0

10

20

30

40

50

60

70

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Gig

aw

att

s (

GW

)

Confirmed Unconfirmed

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Key Finding: Change in Resource Mix

New Renewable/Variable Resources Introduce New System Planning and Operational Challenges

0 2 4 6 8

10 12 14 16 18 20 22

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Gig

awat

ts (

GW

)

Growth in Expected On-Peak

Capacity

Hydro

Pumped Storage

Geothermal Wind

Biomass

Solar

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The Need For Flexibility: A Future, Not a Scenario

Slide 12

Lo

ad

& N

et

Lo

ad

(M

W)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

14,000

16,000

18,000

20,000

22,000

24,000

26,000

28,000

30,000

32,000

34,000

Load, Wind & Solar Profiles --- Base Scenario January 2020

Net_Load Load Wind Total Solar

Win

d &

So

lar

(MW

)

6,700 MW in

3-hours

7,000 MW in

3-hours

12,700 MW

in 3-hours

Net Load = Load - Wind - Solar

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Accommodating High-Levels of Variable Generation

Reliably integrating these resources into the bulk power system will require significant changes to traditional methods used for system

planning and operation

Forecasting

• Variable Fuels Must Be Used When Available

• Forecast is only information; operator must make informed decisions

• “It’s the ramps, not the ripples”

• Methods for calculating expected on-peak capacity

Flexibility

• More Ancillary Services

• Larger Balancing Authorities

• Flexible Resources

• Storage

• PHEV

• Leverage fuel diversity of other variable resources

• Distribution; Ride-through Capability

Transmission

• Interconnect variable energy resources in remote areas

• Construct/site/permit transmission to deliver power across long distances

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Wind Generation Forecasting

• Challenge

A forecast is only information

Operators need tools to react

to forecast

Sufficient lead-time needed

for preventive and

corrective actions

Improved measurement, forecasting of

variable generation output is needed

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Enhanced Flexibility is Needed

Additional flexible resources, such as

demand response, plug-in hybrid electric

vehicles, and energy storage may help

balance steep “ramps”

Deploying complementary types of

variable generation (e.g. wind and solar),

leveraging fuel diversity over large

geographic regions, and advanced control

technologies show promise in managing

unique operating characteristics

Greater access to larger pools of

generation and demand may facilitate the

large-scale integration of variable resources

Increased reliance on gas generation

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• Four characteristics of conventional generation that VERs should also provide:

Capability to provide reactive power support;

Capability to increase or reduce energy output automatically, in response to system frequency;

Ability to limit power production as needed for the promotion of reliability; and

Capability to provide inertial response.

All Generators Must Contribute to Reliability

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Next Steps:

• Interconnection Standards

• Low-voltage ride through (disturbances)

• Protection and Relay

• Active/Reactive Power Control

• Communication

• Telemetry

• Control

• Data and Information

• Standard non-proprietary models

• Forecasting and availability

• Meteorological data

• Plant output

• Resource status

• Turbine capability

• Other information

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Market Enhancements Help the Integration of Variable Resources

Market Enhancements – California ISO

– Active flexible capacity procurement

– Dynamic transfers

– Lower bid floor to incentivize economic curtailment

– Pay-for-performance regulation

– FERC 764, intra-hour scheduling

– Proposed enhancements to the California Public Utilities

Commission’s (CPUC) resource adequacy program

– Energy Imbalance Market (Regional Coordination)

– Dispatchable VERs

Slide 18

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Key Finding: Transmission

Overall Growth of Transmission Infrastructure Responding to Increased Plans to Integrate and Deliver New Resources

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

10,000 11,000 12,000 13,000 14,000 15,000 16,000 17,000 18,000 19,000 20,000 21,000

Cir

cuit

Mile

s

5 Year Outlook Actual Miles Added Over 5-Year Period

Historical average of transmission built within any given

consecutive 5-year period between 1990

and 2012 is approximately 7,000

miles

Industry continues to meet higher-than-average 5-year plans

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All of the Above

Generation Storage

Demand Response

Dispatchable

Quick Start

Wider Operating Range (lower Pmin)

Load Shift

Over Generation Mitigation

Voltage Support

Peak Load Reduction

Dispatchable Wind/Solar

Fast Ramping

Regulation

Frequency Response

Slide 20

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More Information?

• NERC Reports on Accommodating High Levels of Variable Generation:

DRAFT Joint NERC-CAISO Special Reliability Assessment: Maintaining Bulk Power System Reliability While Integrating Variable Energy Resources to Meet Renewable Portfolio Standards

Interconnection Requirements for Variable Generation, NERC, September 2012

Potential Bulk System Reliability Impacts of Distributed Resources

Methods to Model and Calculate Capacity Contributions of Variable Generation for Resource Adequacy Planning

Ancillary Service and Balancing Authority Area Solutions to Integrate Variable Generation

Operating Practices, Procedures, and Tools

Potential Reliability Impacts of Emerging Flexible Resources

Variable Generation Power Forecasting for Operations

Standard Models for Variable Generation

Flexibility Requirements and Potential Metrics for Variable Generation

• NERC Reports on Accommodating and Increased Dependency on Natural Gas

Primer (Phase I)

Vulnerability Assessment (Phase II)

• NERC Reliability Assessments (Long-Term and Seasonal)

http://www.nerc.com/pa/RAPA/ra/Pages/default.aspx