Anjali Sheffrin, Ph.D.Chief Economist & Director, Market Design & Product Development

Integration of Wind Resources in CAISO Markets and Grid

Operation

APEx 2007 ProgramOctober 15-16, 2007

2 Anjali Sheffrin

Individual States take lead in fight against global warming

“Today California will be a leader in the fight against global warming,” said Governor Schwarzenegger. (United Nations' World Environment Day conference in San Francisco, June 1, 2007)

Renewable Portfolio Standards

4 Anjali Sheffrin

CAISO Renewables Integration Program

ISO Corporate Goal: Support the integration of renewable resources on the California power grid in support of the State of California’s policy regarding renewables.

Project encompasses the integration of renewable resources into CAISO’s Transmission planning Markets, and Grid Operations

Objective is to support the State’s goal of 20% of customer load being served by renewable resources by the end of 2010 and 33% by 2020.

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Summer 2006Solar 0.4%

Small Hydro 1.4%

Wind 2.4%BioMass 1.5%

Other Generation Resources

91.0%

Renewables Provided 9% of the Energy to Serve Customer Loadfor the period May through September

Geothermal 3.3%

Current Level of Renewable Generation in California

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Existing California Renewable Generationand Possible Additions to meet the 20% RPS Goal by 2010*

1,977

465

1,214

228

4,577

1,300

845

2690

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Geothermal Biomass Wind Solar

MW Additional

Existing3,191 MW

1,073 MW

7,267 MW

1,765 MW

* Data on additional renewable resource is based on a current CEC studies on renewables. Potential retirements of existing resources and repowering projects are not included.

13,296 MW Total Renewables 7,319 MW Additonal 5,977 MW Existing

20% Renewables

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Large amounts of renewable generation are needed to meet state requirements.

0

5000

10000

15000

20000

25000

2007 2010 2020

Year

Me

ga

wa

tts

Wind Geothermal Biomass Solar

Current

20%

33%

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Altamont Pass

Solano County

Tehachapi/ Mojave Desert

San Gorgonio Pass

California’s abundant wind resources have a key role to play.

Pacheco Pass

Lassen

Shasta

Salton Sea Imperial Valley

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What are the Major Challenges of Integrating Intermittent Resources ?

Barriers to Efficient Interconnection and Transmission Planning Funding challenges for transmission to remote locations and

existing transmission policies distinguishing reliability and economic upgrades

Operating Issues Frequency regulation, load following, and operating reserves; 

Ramping problems; over generation control

Importance of forecasting of renewable energy;

Application of WECC standards for wind generators

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Removing Barriersto Efficient Interconnection Policies

Problem: Current Interconnection Policies Creating a Barrier Long standing FERC policy offers two approaches for financing transmission upgrades:

• Network transmission facilities rolled into Transmission Access Charge

• “Tie-line” facilities paid for by power plant owners

CAISO proposed solution: Distinct new category of transmission serving multiple power plants in areas where the energy sources cannot be transported

Facilitate capturing economies of scale associated with renewable energy development

Promote overall development of diverse renewable resource opportunities

Key elements of new interconnection policy for locationally constrained resource areas

Financing Mechanism Allows Appropriate Sizing

• Lines paid for by transmission owners

Risk of Stranded Costs Systematically Mitigated

• California Energy Commission designation as a significant resource area

• Multiple projects in the area

• CAISO must find the project to be cost-effective

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Eligibility Criteria for Transmission to Locationally Constrained Resource Areas

Must be non-network

Must provide access to an area with significant potential for development of locationally constrained resources (i.e., renewables) as designated by the CEC

Must be turned over to ISO control

Transmission to serve multiple facilities

Cannot exceed 15% of the sum total of the high-voltage network plant included in the Transmission Access Charge

Must meet a commercial interest test - i.e. sufficient generator interest through Large Generator Interconnection Process

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Removing Barriers to Effective Transmission Planning

Problem: Planning for reliability upgrades only and economic upgrades to be market driven

ISO proposed solution:

New transmission planning process for reliability and economic projects

• Regional planning with all transmission providers in California

• Established Transmission Economic Assessment Methodology (TEAM) as standard measure for establishing economic need for major transmission projects

Proactive transmission planning for future clusters of renewable generation

• Tehachapi Transmission Plan

» Approved on January 24, 2007

» First use of clustering approach

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Transmission Study Results

The Tehachapi Transmission Plan is sound and there are no serious transient stability or voltage control problems

Key conclusions

Power factor control is critical - New wind generators must meet WECC criteria for ±0.95 power factor control

Low Voltage Ride Through Standard – all new units must meet WECC LVRT Standard.

New wind generators should be Type 3 or Type 4 units

Existing Type 1 Wind Generators in Tehachapi area do not meet LVRT standards and will probably be lost in event of voltage collapse

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Ramping issues

Forecasted Hourly Ramps due to Additional Wind Generation

• In California, the wind generation energy production tends to be inversely correlated with the daily load curve. The wind energy production peaks during the night and falls off during the morning load pick up. The net result will be morning ramps of 2000 to 4000 MW per hour for 3 hours – a total of 6000 to 12,000 MW over 3 hours.

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Total California Generation

0

200

400

600

800

1000

1200

0:01

1:01

2:01

3:01

4:01

5:01

6:01

7:01

8:01

9:01

10:0

1

11:0

1

12:0

1

13:0

1

14:0

1

15:0

1

16:0

1

17:0

1

18:0

1

19:0

1

20:0

1

21:0

1

22:0

1

23:0

1

MW

TOTAL

Pacheco

Solano

Tehachapi

Altamont

San Gorgonio

Total California Generation

0

200

400

600

800

1000

1200

0:01

1:01

2:01

3:01

4:01

5:01

6:01

7:01

8:01

9:01

10:0

1

11:0

1

12:0

1

13:0

1

14:0

1

15:0

1

16:0

1

17:0

1

18:0

1

19:0

1

20:0

1

21:0

1

22:0

1

23:0

1

MW

TOTAL

Pacheco

Solano

Tehachapi

Altamont

San Gorgonio

Wind Generation Output may Change Quickly

Will Affect Ramp Rates, Regulation Requirements,

Load Following, Etc.

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January 6, 2005 California Wind Generation

0

50

100

150

200

250

300

350

400

0:00

:00

1:00

:00

2:00

:00

3:00

:00

4:00

:00

5:00

:00

6:00

:00

7:00

:00

8:00

:00

9:00

:00

10:0

0:00

11:0

0:00

12:0

0:00

13:0

0:00

14:0

0:00

15:0

0:00

16:0

0:00

17:0

0:00

18:0

0:00

19:0

0:00

20:0

0:00

21:0

0:00

22:0

0:00

23:0

0:00

MW

20000

22000

24000

26000

28000

30000

32000

34000

TOTAL Load, MW

Wind Generation Output may Peak During Off-peak Periods

May Lead to Cycling of Base Load Generation

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Operational challenges to incorporating the 20% RPS Target

Increases the amount of regulation resources Add 170 MW to 500 MW of regulation resources to accommodate rapid changes in wind

and other variables.

• Amount required varies with the season (winter, spring, summer, fall)

• Estimated cost of additional regulation is $30 million annually

Ramping requirement increases Fast ramping increases by ±15 MW/min to ±25MW/min

Regulation by hydro units will be most important

Supplemental energy dispatches will increase Morning ramp up will increase by 1000 to 2000 MW per hour

Evening ramp down will increase by 1000 to 1800 MW per hour

Potential Over Generation problems will increase for light load periods

Pro rata cuts of up to 800 MW of wind generation production may be required for an estimated 100 hours per year

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Enhanced Resource Adequacy requirements and market prices will drive integration of renewables

GenerationPortfolio Storage

DemandResponse

Resources Required for Renewables Integration

Quick Start Units

Fast Ramping

Wider Operating Range

Regulation capability

Shift Energy from off-peak to on-peak

Mitigate Over Generation

Voltage Support

Regulation capability

Price sensitive load

Responsive to ISO dispatches

Frequency Responsive

Responsive to Wind Generation Production

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How to make the 20% RPS Target work

Build the planned transmission facilities for Tehachapi

Sunrise Power Link

Require all new wind generators to be Type 3 or Type 4 that meet Low Voltage Ride Through (LVRT) Standards

Add SVC’s for dynamic VAR regulation

Change Resource Adequacy requirements for generation facilities for more fast start units, increased ramping, and larger operating ranges.

Integrate wind energy production with changes in hydro dispatch for meet the need for rapid energy ramps

Increase storage options – 3rd pump operation at Helms, Leaps, Compressed Air Storage, H.S. Flywheels for regulation and Hydrogen Storage.

Increase Demand Response options

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Conclusions

The increasing cost of natural gas for fossil fired plants and declining cost of wind generation makes wind generation an attractive source of energy.

We need new methods to control the wind generation ramps if we are going to accommodate 6000 to 8000 MWs of wind generation.

New technology at the turbines site can provide for response for frequency control.

The regulation and load following burden to accommodate wind generation is not trivial but can be managed with good forecasting techniques and mix of fast ramping generation resources .