We all know that our electric power system is changing, and that reliability of the grid must be carefully considered during this transition, but I’ve been surprised by recent actions by the Federal Energy Regulatory Commission (FERC). Let’s walk through this story and talk about the important implications.
Starting with the electric power system, the most obvious transition is from coal generation to more use of natural gas, wind, solar, demand response and distributed energy resources. Wind energy and solar energy are becoming the low cost choices for new generation and free fuel is a game changer for operations and markets. These are disruptive changes indeed!
Less obvious, but evolving even more rapidly, are the changes to ensure reliability. In the last issue, Charlie Smith wrote about the capabilities of wind and solar plants to provide ancillary services. He closed his article with a call to action for new interconnection requirements so that all new resources will have capabilities to support grid reliability. In this issue, I’m already able to confirm that these changes are well underway.
The North American Electric Reliability Corporation (NERC) recently released Essential Reliability Services reports to highlight the role of voltage support, frequency support and ramping capability. In addition to balancing generation and load using “real power,” the grid also requires reactive power, primary frequency response and other features during normal operations and (even more so) during grid disturbances. NERC’s working group will continue to quantify the necessary amounts of such services over the next two years.
But how should we obtain such services? The same services could be obtained through interconnection requirements, standards, direct procurement, or new market products. Interconnection requirements, just to pick on one of these options, can be done through interconnection studies for individual plants, interconnection agreements for specific regions, or through FERC’s pro forma interconnection agreements. There are many tradeoffs in terms of costs, motivations and opportunities.
It gets even more complex when you look at how much is “enough” and what it is worth. As we have seen with related ancillary service products (such as regulation), these services are likely to have very high value when we don’t have enough but very little value when we exceed a certain level of need. So on the one hand, new market products or competitive procurements are attractive options so that we can assign a value to these products and obtain them from the low-cost sources. On the other hand, we really don’t want to end up with a shortage of necessary services at some point in the future, so requiring the capability for providing these services as a condition of interconnection or through a standard may also be prudent. When there are operating costs incurred to supply the services to the grid, however, it can become very expensive and wasteful to have more than we need.
We must also get smarter about the capabilities of our resources, how they differ in subtle ways, and how they interact. Inverter-based resources, including wind and solar, can provide impressive capabilities using their computer-driven control systems. Battery storage is another inverter-based resource with impressive features that are different from what we are used to seeing from conventional resources. Changes to interconnection, operating and market rules are needed because battery storage can provide a wide range of generator and transmission services, but it doesn’t fit conventional assumptions about what it means to be a generator.
Getting back to FERC, they surprised many folks with recent actions on reliability services. A proposed rule change to the FERC pro forma interconnection agreements would require voltage support capabilities to be installed for all new generation resources. A similar change to require frequency response capabilities may be on the agenda for their next meeting. Because system operators must adapt their own interconnection agreements to comply with FERC’s default agreements, FERC’s actions could effectively create a “grid code” for all devices that are connected to the bulk power system in a way that is similar to European grid codes.
But such a grid code is still only part of the picture. Ensuring sufficient capability is prudent, but determining how that capability will be used is a more complex task that will involve standards, operating practices and market design on many levels. This will lead to spirited discussions at UVIG meetings and user groups as we work together to craft the rules for the future power system.
Mark Ahlstrom
WindLogics/NextEra Energy
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