Utilities are increasingly seeking to impose additional integration charges on wind and solar generators to compensate for variability and uncertainty. Renewable Reserve Sharing Groups may provide a way to help reduce or eliminate those charges.

There are two distinct ways that wind and solar generation can impact utility balancing requirements:

• Minute-to-minute variability of wind and solar generator output adds to load variability and increases Balancing Area regulation requirements.
• Large, but rare, drops in wind or solar output, under adverse weather and load conditions and during limited availability of conventional generation, can exceed the ramping capability of online generators to follow the changes in output.

While minute-to-minute variability of wind and solar generator output tends to be minimal and is reduced through diversity as the renewable generation fleet grows, the potential for large but infrequent drops in solar and wind generation has been identified in some resource adequacy studies as a justification for addition reserves and the basis for increased variable renewable generation charges. However, an increased reserve requirement and increased costs may be based on a few minutes of insufficient ramping capacity over ten years. The studies model the power system under thousands of sets of conditions covering decades of potential weather conditions, multiple economic load growth and fuel availability forecasts, and a range of other conditions. In some cases, insufficient ramping capacity from the utility’s online conventional generators during a single five-minute interval in ten years of simulation leads to an increased reserve requirement and increased costs. Moreover, these charges are often proposed in cases where the wind and solar generation fleet is expected to grow significantly but where actual operating data at high levels of renewables does not yet exist, and the benefits of geographic diversity and aggregation in reducing ramping requirements have not yet been experienced by that utility.

While sudden drops in wind or solar generation output are similar to conventional generation contingencies in that they are rare events but potentially serious because of their size, they are unlike conventional contingencies – and do not qualify to make use of contingency reserves – because they are ramping events, taking tens of minutes to unfold, in contrast to the instantaneous tripping of large generators that create conventional contingencies. Within the traditional utility balancing framework, these potential large drops in wind and solar generation are often compensated with increased minute-to-minute regulation and ramping reserves; consequently, the calculated added reserve costs, and the added renewables integration charge, can be large.

Potential Use of Renewable Generation Reserve Sharing Groups

Renewable Generation Reserve Sharing Groups may provide a way for wind and solar generators to address high integration costs. Since generator failures are rare—it is unlikely that two generators in two different Balancing Authorities will fail at the same time—utilities reduce their conventional contingency reserve requirements by joining Contingency Reserve Sharing Groups. The North American Electric Reliability Corporation (NERC) allows Balancing Authorities to pool their contingency reserves and carry only enough reserves to cover the largest credible contingency within the combined area. This greatly reduces the amount of contingency reserves that each utility has to supply.

This reserve sharing concept could be extended to cover wind and solar reserve requirements. Recognizing that wind or solar generation is unlikely to suddenly decline in multiple balancing areas simultaneously, if only because clouds and weather fronts are finite in size and geographically can’t simultaneously cover a large area, reserves could be shared among Balancing Authorities. As with contingency reserve sharing, this would reduce the reserve requirements, and costs, for each of the participating Balancing Authorities.

Three Types of Reserve Sharing Groups Currently Recognized by NERC

At this time, NERC recognizes three kinds of Reserve Sharing Groups: Contingency Reserve Sharing Groups, Frequency Response Reserve Sharing Groups, and Regulation Reserve Sharing Groups.   Contingency Reserve Sharing Groups (simply called Reserve Sharing Groups or RSGs in NERC standards) are the oldest and most common of the three types of Reserve Sharing Groups. Multiple Balancing Authorities reduce their individual contingency reserve obligations by sharing resources. This works because individual generators in the multiple Balancing Areas are unlikely to fail simultaneously. The entire group needs only to have enough contingency reserves to cover a single failure at a time. NERC lists 11 Contingency Reserve Sharing Groups.

NERC reliability standards recognize Frequency Response Sharing Groups where members pool resources to meet their frequency response obligations. The Western Frequency Response Sharing Group (WFRSG) is currently the only FRSG recognized by NERC.

NERC reliability standards also recognize Regulation Reserve Sharing Groups for the pooling of minute-to-minute regulation reserves and meeting a collective regulation requirement. Again, diversity in minute-to-minute variability among the individual Balancing Area members reduces the overall regulation requirement. There are currently no active Regulation Reserve Sharing Groups recognized by NERC.

Renewable Reserve Sharing Groups are very similar to Contingency Reserve Sharing Groups, though operating over a slightly longer time frame. There does not appear to be any technical reason that NERC would not allow RRSGs to form.

Forming Renewable Reserve Sharing Groups

NERC approval of the concept and establishment of implementation rules is first required.

Two routes are possible, using existing groups and forming new ones. Existing contingency reserve sharing groups could easily expand their services to offer Renewable Reserve Sharing. This would involve expanding the reserve resources since they could not utilize the contingency reserves; however, the same entities that supply the contingency reserves likely have additional responsive reserves they could offer to the pool.

Alternatively, wind and solar generators could form Renewable Reserve Sharing Groups, obtaining responsive reserves either through ownership or through contracts. Potential resources could include fast-start generation, on-line generation, demand response, and storage. Response from the Renewable Reserve Sharing Group would then be offered to each of the host utilities in lieu of paying the renewable integration charge.

In Summary

Contingency reserve sharing groups have worked extremely well at reducing the cost of reliably responding to large, infrequent, conventional generator failures by spreading the risk over multiple participants. A similar approach could work for wind and solar generators. If existing reserve sharing groups are unwilling or unable to expand their services to cover rare wind and solar ramping events (with additional resources), it may be possible for wind and solar generation owners to create Renewable Generation Reserve Sharing Groups as an alternative approach.

Brendan Kirby, P.E.
GridLab Consultant