Holistic Transmission and Resource Planning - For the Good ... · Holistic Transmission and...

Holistic Transmission and Resource Planning- For the Good of the Whole

Stephen LeeSenior Technical ExecutivePower System Planning and OperationMarch 3, 2008

IEEE Power and Energy Magazine, Sept/Oct 2007

Presented to IEEE Power Engineering SocietySan Francisco Chapter

Hosted by California PUC, San Francisco

2© 2007 Electric Power Research Institute, Inc. All rights reserved.

Outline

• Electricity – Central Planning or Free Market• What is Holistic Planning?• Integrated Planning Revisited• Reliability Assessment of Whole Operating Space• Holistic Transmission Planning• Holistic Resource Planning• Concept of Unity in Diversity• Optimal Holistic Resource Mix with CO2 Cost• Costs and Benefits Distribution• Demonstration of the CAR software


Electricity – Central Planning or Free Market

• Decades of the regulatory model or “Central Planning”– Problems of cost-overrun and/or over-capacity– Central planning does not handle uncertainties well

• Power markets– California market meltdown and bankruptcy of Enron– Free markets tend to be short-sighted and not social

conscious• Lessons learned

– Both systems have problems


Need for New Approach

• With restructuring and greater market activities, the power grid is being used in ways not in the original designs

• Increased reliability risk to grid operation• Increased burden on greater situational awareness by

operators• It is time to revisit the way we plan the power grid• The power grid should again be designed to be operated

in the new ways it will be used, and perhaps even in unanticipated uses

• Key words: HOLISTIC, ROBUST, FLEXIBLE


What is Holistic Planning?

• Holistic Planning is to develop a whole or a part of the electric power system, with full consideration of all its parts, responsive to the public, modeling all reasonably probable scenarios of uncertainties affecting planning as well as future power system operating conditions, with additional tests to assess the robustness of the system when exposed to “unlikely” but potentially devastating disturbances or other events, in order to achieve a system which has:– Economic efficiency– Adequate reliability– Acceptable environmental impacts


Principles of Holistic Planning

• To compare alternative plans, a comprehensive and quantitative metric which corresponds to the maximization of public benefits for the whole system.

• Probabilistic reliability criteria in lieu of deterministic criteria; otherwise, transmission investments could be driven equally by contingencies that have widely different probabilities, resulting in non-optimal resource allocation.

• The scope of the whole system extends beyond the power system toinclude the local, regional and global environment.

• Fair and equitable method for allocating costs and benefits having a causal and proportional relationship between the use of the assets and the costs or benefits to be borne by the parties.

• The rules of the road for each party should be such that its incentive does not induce decisions against the global objective of the whole system. Instead, each party would stand to gain if the whole system achieves more and more global optimality. By following individual and diverse incentives, unity in global objective should be achieved.


Integrated Planning Revisited

• The ideological platform is “optimal resource allocation”• A balanced evaluation of the supply side and the demand

side in which all energy supply alternatives and all conversion of energy into energy services are subject to evaluation on a level playing field.

• Involves individuals as well as collective preferences• For example, on the individual side, customers want full

control of choices which they make based on the options presented to them; on the collective side, customers do accept affiliation to a group and therefore admit to assume their share of a collective responsibility

• Integrated planning can be viewed as a process for balancing individual as well as collective preferences.


Reliability Assessment of Whole Operating Space

• We assess reliability for limited operating conditions, e.g.,– Annual peak load– All transmission lines in service

• What about? – Other load levels or other hours– Maintenance schedules of transmission and

generation– External or market transactions


Boundary Conditions

Transmission and GeneratorConnectivity and Topology

Power Flows –

MW

Load

and

Vol

tage

Pro

file

OperatingState – “You are here”

Inside Boundary Conditions

System OperatingLimits

Outside BoundaryConditions

Transmission and GeneratorConnectivity and Topology

Power Flows –

MW

Load

and

Vol

tage

Pro

file

OperatingState – “You are here”

Inside Boundary Conditions

System OperatingLimits

Outside BoundaryConditions

Load

Genera

tion Disp

atch


G1 >0

G2 >0

G3 >0

A1 A2

A3 A4

CCommunityommunity

AActivityctivity

RRoomoom

G3=3000

G3=2000

G3= -3000

G3= -2000

G3= 0

A 4-Area Interconnection

A floor plan is a two-dimensional nomogram.

G1 is net export out of area A1, when positive.G2 is net export out of area A2, when positive.G3 is net export out of area A3, when positive.G4 = - G1 - G2 - G3, is automatically given, when G1, G2, and G3 are specified.

The Constraints on Any Combinationof Net Exports (G1, G2, G3 and G4)

are walls of this 3-D “CAR”


G1 >0

G2 >0

G3 >0

G3=3000

G3= -3000

G3= 0


N-1

Boundary = N-1 Contingency Criteria


Boundary = N-2 Contingency Criteria

N-1 criteria enforce possibly uneven reliability


CAR Provides Statistics of Contingency Constraints to TNB (Malaysia)


Bar Chart for a Month


Holistic Transmission Planning

• White space is the inside of the CAR (community Activity Room) where operation is reliable

• Future growth requires operating outside the white space

• How do we expand the grid to fit all future operating conditions (described by the ellipse?)

• CAR gives the holistic answer by moving all necessary walls the right amount (increase capacities of line 1-4 by 2500 MW and 2-4 by 1200 MW)

Line 2-4

Line 1-4


Load Level

Dur

atio

n

Variation of CAR with Different Load Levels


Relate Monthly Load Duration Curves to Scheduled Outages

Monthly Load Duration Curves

0 5000 10000 15000 20000 25000

Hou

rs

Load (MW)


No. of Simultaneous Scheduled and Unscheduled Line Outages (Within Same Day) Over 12 Months of a Year (Maximum, Average and Minimum)

Simultaneous Line Outages (All)

0.0

5.0

10.0

15.0

20.0

1 2 3 4 5 6 7 8 9 10 11 12

Month

No.

of L

ines

Max Outages / Day Min Outages / Day Average Outages / Day


Holistic Resource Planning

• How to achieve results of integrated planning in today’s non-vertical utility structure?

• Parts of the whole maximizing their separate incentives may work against achieving the good of the whole


Unity in Diversity

• Diversity means the exercise of an individual’s right of free choices.

• Unity in Diversity means creating unity while preservingdiversity, or allowing diversity to achieve unity.

• Hypothesis –– Align an individual’s selfish incentive more with the

socially optimal objective– Then the creative energy of individuals would achieve

the social objective.


Tier 1 Costs(Direct Costs)

Total Cost = Tier 1 Cost + Tier 2 Cost

* Best Decision

Tier 2 Costs (Public Good)

Decision is not optimal if Tier 2 costs are ignored

Optimal Decisions


Common Property of the Human Race?

• Tier 2 assets (e.g., air, water, land) with PROPERTY RIGHTS belonging to the inhabitants

• Create a Tier 2 class of ownership• Distribute Tier 2 revenues and benefits to all Tier 2 owners

through Public Benefits Funds (PBF)• People will then behave in accordance with the objectives of

minimizing the total Cost (direct Tier 1 + Tier 2 costs)

“It is a position not to be controverted that the earth, in its natural, cultivated state was, and ever would have continued to be, the common property of the human race.” -- Thomas Paine, Agrarian Justice


Basic Principles of UDi-ism (Unity in Diversity)

• Tier 2 Assets and Prices to capture externalities• Tier 2 Ownership and Property Rights

What if the price of a hamburger includes a medical cost due to health effect?

What benefits will it bring to the consumer and to the country?

What new and healthier food will become good businesses?


Levelized Annual Cost for Six Power Plant Types with CO2 Cost = $40/ton

0

100

200

300

400

500

600

700

800

900

1000

0 1000 2000 3000 4000 5000 6000 7000 8000

Hours per Year Operation

$/kW

/yr

NuclearCOALComb CycleIGCCCTWind/Solar w Storage


CO2 Price Sensitivity of Electric Generation Market Shares with Oil Price at 60 $/bbl, Coal Price at 4 $/MBTU and

Wind/Solar w Storage at 5000 $/kW

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

$- $5

$10

$15

$20

$25

$30

$35

$40

$45

$50

$55

$60

$65

$70

$75

$80

CO2 Cost ($/ton)

Mar

ket S

hare

Wind/Solar w StorageCTIGCCComb CycleCOALNuclear


Oil Price = $60 / bbl


Oil Price = $90 / bbl


Flow of Money for Cap and Trade System

Green Power Plant Non-compliant Power Plant

Exchange

$

Allowance Certificates

$

Electricity ConsumersElectricity

$$

Electricity


Exchange

$

Allowance Certificates

$


$$

Electricity


Flow of Money with CO2 Public Benefits Fund


Trustee ofCO2 Charge

0 or Low $ High $


$$

Accountable to International Agreements

Electricity

Rebate incentives and Electricity subsidies


Trustee ofCO2 Charge

0 or Low $ High $


$$

Accountable to International Agreements

Electricity

Rebate incentives and Electricity subsidies


Costs and Benefits Distribution

• Economics should be based on costs and not on prices• Rational decisions by non-public entities are based on

financial incentives (selfish) + other factors of persuasion• If costs and benefits are not distributed equitably, rational

decisions may not be compatible with optimal resource allocation for the Good of the Whole

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