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NERC Reality vs. AWEA’s Goggin: Chasing a Ghost in Windland

By Kevon Martis -- March 5, 2014

“It is simply dishonest to state that very high levels of renewables can be accommodated with little problem, while NERC states that until we figure out who pays for all the substantial operational and reliability challenges those VERs bring to the system, higher penetrations (above 20%) become problematic.”

Last fall I entered into a debate in the comment section of a post on The Energy Collective with AWEA’s Michael Goggin. As is his style, Mr. Goggin posted a long series of statements about wind energy suggesting that it is neither more difficult to integrate high percentages of wind into the grid than conventional generators nor does it create significant additional expense for grid operators or ratepayers.

I responded with a post stating that a recent paper by NERC entitled “Maintaining Bulk Power System Reliability While Integrating Variable Energy Resources – CAISO Approach” contradicted nearly everything he stated in his post. He then suggested that I needed to explain to him precisely how it did.

A plain reading of the NERC document did not require much interpretation to see that NERC and CAISO both see significant and expensive technical obstacles when it comes to integrating 20% or more of Variable Energy Resources (wind and solar) into California’s grid. So I ignored his pleas for me to show him precisely how the NERC report did exactly that. To me, and I think to most informed readers, it is self-evident. But since Mr. Goggin has persisted in pushing his point that I cannot support my statements, I have drafter this response today.


Dear Michael:

Absent the financial support from industry that you possess, I have only so much time to respond to you. We are busy enough in MI, OH, IN, KY, PA and AL as it is.

You have again asked why I do not respond to your requests that I show you how the NERC CAISO paper rebuts your statements in the article below:


I did not answer you on Energy Collective because, as I said, the NERC report- on its face- is a devastating rebuttal of almost every one of your major talking points. It is almost insulting to ask me to spoon feed you the entire report to show you how it does so. Nevertheless, I will do so here.

Let’s consider a few of your statements on Energy Collective to illustrate the silliness:

You said:

“Adding wind energy to the grid does not cause any need for new power plant capacity, and actually significantly reduces the total need for power plants. Every wind integration study has found that there is more than enough flexibility on the power system today to accommodate very high levels of wind energy.”

And you also said: “Wind energy curtailment has only occurred due to localized transmission constraints, and never because the amount of wind output exceeded total demand on the power system.”

And: “Energy storage is not needed for wind energy. The U.S. has added 60 GW of wind, and Europe even more, with zero need to add energy storage. As explained above, there is plenty of flexibility on the existing power system.”

Also: “Regarding the false claim about a need to add inefficient power plants, Spain is able to obtain around 20% of its electricity from wind while accommodating any incremental variability using a gas generating fleet entirely made up of highly efficient combined cycle power plants.”

My reply to these statements was that NERC’s review of CAISO contradicts these points. And it does.

Consider these quotes from the document itself:

“Integrating large quantities of variable energy resources (VERs) (predominantly wind and photovoltaic (PV) solar) into the North American bulk power system (BPS) requires significant changes to electricity system planning and operations to ensure continued reliability of the grid.”


“Electricity supply traditionally has been provided by fossil-fueled, large-scale hydro and nuclear resources synchronously connected to the grid. Industry has established reliability expectations with these generating technologies through knowledge accumulated over many years of experience. These traditional generation resources have predictable operating performance with well-understood reliability characteristics.

VERs have different characteristics and respond differently on the system. System operators have much less knowledge and experience with such resources on a large scale. As larger amounts of variable generation are added to the system, they will displace the traditional large, rotating machines and the operating characteristics those machines provided.”


“Operationally, an increase in wind and solar resources continues to challenge operators with the inherent swings, or ramps, in power output. In certain areas where large concentrations of wind resources have been added, system planners accommodate added variability by increasing the amount of available regulating reserves and potentially carrying additional operating reserves. Because weather plays a key factor in determining wind and solar output, enhancing regional wind and solar forecasting systems can provide more accurate generation projections. Other methods include curtailment and limitation procedures used when generation exceeds the available regulating resources.”


“By 2020, an additional 11,000 MW of VERs are expected to be connected to the CAISO grid, which is anticipated to add to the uncertainty and variability of the future resource mix. As this report will explain, CAISO projects that more flexibility in accessing essential reliability services will be needed to reliably meet net load, manage approximately 3,000 MW of intrahour load-following needs, and provide nearly 13,000 MW of continuous up-ramping capability within a three-hour time period.”


“Active Power Control: NERC’s findings show that with large amounts of VERs, active power control may be needed to maintain reliability. VERs should have the capability to receive and respond to automated dispatch instructions as well as maintain an ability to limit active power output, should there be a reliability need.

Plants should be designed with consideration of more flexible ramp rate limit requirements. Requirements for certain operating conditions could possibly be removed. Variable generation plants should not be required to limit power decreases due to declines in wind speed or solar irradiation (i.e., down-ramp rate limits). However, limits on decreases in power output due to other reasons, including curtailment commands, shut-down sequences, and responses to market conditions, can be reasonably required. In addition, when a fuel source returns, VERs should have the capability to ramp up in controlled increments.”


“Dispatched resources are expected to move to their new operating target every five minutes, while resources not receiving a dispatch instruction are expected to remain at their target (as they were not instructed to move). VERs such as wind and solar generation contribute to uninstructed deviation (i.e., negative flexibility) because their production levels can change significantly within five-minute dispatch intervals.”


“Predispatch practices used for conventional resources cannot effectively accommodate the variability of wind and solar generation according to hourly schedules because of potentially limited capabilities (i.e., fast ramping capabilities). This becomes more challenging as wind and solar products increase beyond the 20 percent RPS milestone. It creates a potential need for increased regulation reserve.”


“Existing real-time market applications cannot predict and use the deviations from VER forecasts, although deviations will be minimized when the real-time variable forecasts are integrated into the real-time market software applications. This variability could cause short-term ramping shortages that result in dynamic market prices and fluctuating dispatch instructions to units in the real-time supplemental energy market.”


“The uncontrolled but relatively predictable output of VERs often results in large intraday ramps. As more VERs are added to the electric system, steeper ramps are likely and therefore require flexible resources that can follow those steep ramps. Two key components are required to ensure net load can be met: an accurate forecast and a resource pool with the capability to provide flexible, fast-acting response.”


Overgeneration occurs when there are more internal generation and imports into a Balancing Area than load and exports. Typically, before an overgeneration event occurs, the system operator will exhaust all efforts to send dispatchable resources to their minimum operating levels and will use all the decremental energy bids available in the imbalance energy market. Via the real-time unit commitment, CAISO may also decommit resources. The system operators will also make arrangements to sell excess energy out of market if bids to balance the system are exhausted. Additionally, with a high ACE, the energy management system will dispatch regulation resources to the bottom of their operating range.

When expecting overgeneration, the system operator sends out a market notice and requests scheduling coordinators to provide more decremental energy bids. If no decremental energy bids are received (or insufficient ones are received), the system operator may declare an overgeneration condition if it can no longer control the ACE and the associated high system frequency. During overgeneration conditions, the typical realtime imbalance energy price is negative, meaning that CAISO will pay entities to take their excess power. There are compelling reliability and market reasons to avoid overgeneration situations.

Currently, the capacity of nondispatchable resources serving load within the CAISO Balancing Area varies between 12,000 MW and 14,000 MW based on the maximum capability of the resources within each category. CAISO plans on exploring ways to incentivize Qualifying Capacity (QFs)9 to curtail production during low net load demand periods in order to minimize the magnitude of potential overgeneration. CAISO also plans on partnering with storage and incenting load shifting during the hours of low net load demand. Nondispatchable capacity can be significantly higher in years with high rainfall or snowpack, especially during the spring months, when temperatures are high and can result in early snow melt and hydro spill conditions. During these operating conditions, hydro resources tend to operate close to their maximum capability to maximize production.”

And most interestingly:

“As the penetration of variable generation increases, additional system flexibility and essential reliability service requirements will also increase. This flexibility manifests itself in terms of the need for dispatchable resources to meet increased ramping, load-following, and regulation capability—this applies to both expected and unexpected net load changes. This flexibility will need to be accounted for in system planning studies to ensure system reliability. System planning and VER integration studies focus both on the reliability and economic optimization of the power system—here the emphasis is on reliability.”


“Empirical analysis from CAISO’s 20-percent RPS study10 demonstrated a shortage of five minutes of net load-following capability in the downward direction when resources were self-scheduled, compared to scenarios where actual physical capabilities were offered for economic dispatch. These results were further substantiated by using a production simulation application. The 20-percent RPS study made it clear that CAISO must pursue incentives or mechanisms to reduce the level of self-scheduled resources or increase the operating flexibility of otherwise dispatchable resources. CAISO is pursuing incentives and mechanisms to either reduce the level of self-scheduled resources, or increase the operating flexibility of otherwise dispatchable resources.”


“System operators must rely on ramping capability to balance the less predictable energy production patterns of VERs like wind and solar resources. The underforecasting of demand and underdelivering of scheduled supply in production requires dispatching flexible resources at higher levels. The alternative case results in overforecasting delivery. System operators must accurately follow load and minimize inadvertent energy flows. This calls for ramping capacity in both speed and quantity, which is dictated by how fast and how much the production patterns of VERs change. To meet this operational challenge, system operators need enough flexible resources with sufficient ramping capability to balance the system within the operating hour. As shown in Figure 6, the typical CAISO load (blue curve) has ramps that are of small capacity and long duration. However, with high penetration of renewable resources, the net load11 (red curve) is the trajectory conventional resources would have to follow. It is comprised of a series of ramps of significant magnitude and shorter duration. It should also be noted that neither wind nor solar peak production coincides with the system peak load.”


“Also, to meet the double peak shown, CAISO may have to cycle resources on and off more than once a day. At times this may not be an option, because the down time between shut-down and start-up of a resource may be too long, which would prevent the resource from being restarted in time for system peak.


“CAISO has identified the need for flexible resources that are committed with sufficient ramping capability to balance the system within the operating hour and between hours for scheduled interchange ramps. To help manage this challenge, CAISO is implementing a ramping tool to predict and alert system operators of the load-following capacity and ramping requirements needed on the system in real time. CAISO is also introducing a flexible ramp product to ensure enough dispatchable capacity will be available on a five-minute dispatch basis in the real-time market.”

And (I am sure you want this cost added to wind’s LCOE):

“The increased supply variability associated with a significant penetration of variable resources will cause more frequent dispatches and the starting and stopping of flexible, gas-fired generators, which will potentially incur more wear and tear. Lower-capacity factors for dispatchable generation combined with potential reduced energy prices also result in decreased energy market revenues for the gas-fired fleet in all hours and seasons. This condition raises concerns regarding revenue adequacy, as well as challenges in supporting gas-fired generation resources that are necessary for dispatch flexibility and reliability. Through technical studies, CAISO has determined that gas-fired generators will be operated at lower capacity factors and will experience more frequent start–stop and cycling instructions that could increase wear and tear on these units. Consequently, increased wear and tear can reduce mean time to failure on generation components and potentially lead to increased forced outage rates, which ultimately results in a need for additional ancillary services.”


“Compared to conventional generation, VERs are less effective in providing the system with sufficient inertia to arrest frequency decline. Similarly, VERs may not create adequate governor-like response to stabilize system frequency following the loss of a large generator. Frequency excursions caused by overgeneration are possible during periods of high VER production and low system demand. If dispatchable resources are already operating at minimum load levels and regulation down capacity has been exhausted, higher-than-scheduled or higher-than-expected VER production levels can result in overgeneration and, ultimately, overfrequency conditions.”


“The crucial difference between the variability of renewable generation and demand is predictability. Demand can be anticipated to within a few percent points based on history, weather forecasts, and timing of major events such as television programs. Renewable generation depends primarily on weather, which does not occur in regular patterns and is not correlated to diurnal patterns of demand. Ramping up or down dispatchable power sources (such as natural gas turbines or hydroelectric power) to follow variable generation is a fundamental reliability challenge.”


“Forecasts must improve to accommodate the two high-priority challenges in generation variability: up-ramps at times of low demand and down-ramps at times of high demand. In the former case, conventional reserves may already be turned off so that accommodating the up-ramp may require turning down base-load conventional generation or curtailing renewable generation. Both options can be inefficient and expensive. In the latter case, most conventional reserves may already be turned on, leaving few options for compensating the power lost in the renewable down-ramp. In the February 26, 2008 ERCOT event, service to certain customers had to be curtailed because of an earlier-than-expected wind down-ramp.”


“Wind and solar energy production is dependent on localized weather information. The electrical grid has evolved to the point at which operators need to know what the weather will be within a one-square-mile area in the next two hours or less.

Since 2004, CAISO has received hourly energy forecasts for wind farms participating in its market from an external forecast service provider. However, two-hour-old forecasts are highly weighted on the current weather condition. Because of the lack of upstream, or ahead-of-the-air-mass observation points, the forecasts tend to be accurate but too late (as shown in Figure 8) to predict the actual wind farm production. This is referred to as the forecast being “out of phase.””


“California currently has a 33 percent RPS and the California Global Warming Solutions Act (see AB 32), which calls for reductions in greenhouse gas emissions. These two policy initiatives may seemingly be at odds with: 1) the increased variability resulting from a large portion of the renewables portfolio, which indicates the need for additional flexible resources (expected to be predominantly provided in the near term from conventional generation)”


“Market enhancements are intended to provide an orderly transition that offers an opportunity for a variety of solutions, including demand-side resources, storage, regional coordination, VER control, and flexible conventional generation to develop and be considered to meet the operational needs.”


“A significant operational challenge for CAISO is to reliably maintain continuous system balance given the variability of the energy output of VERs, which is caused by the variable nature of their fuel source (e.g., solar irradiance and wind speed). Increased variability in the output of the supply portfolio will result in less predictability and, therefore, greater operational uncertainty. CAISO must anticipate and manage this variability to balance supply and demand as well as to meet reliability criteria. Greater uncertainty indicates the need for additional resources to provide dependability at an appropriate level of confidence (i.e., to provide adequate certainty).”


“The flexible ramp product will complement the existing flexible ramp constraint to create an actual product that ensures sufficient upward and downward ramping capability is available in real time and that resources are appropriately compensated for providing the service. The flexi-ramp constraint—enforced since December 2011—only addresses the upward ramping capacity. Yet, with large amounts of self-scheduling renewable generation coming on-line, studies indicate that overgeneration is likely to occur. Addressing this operational concern will require downward ramping capability.


The current bid floor level of negative US$30/MWh does not provide a sufficient economic signal for variable renewable resources to curtail output, because such resources often receive additional revenues from outside the CAISO market for their energy production. That revenue prevents these resources from submitting economical decremental bids. Given this constraint, CAISO proposes to move the bid floor in two stages with an effective date of April 1, 2014.48 First, CAISO will move the bid floor to negative US$150/MWh, then to negative US$300/MWh. CAISO will evaluate the impact of reducing the bid floor to negative US$150/MWh based on a full year’s data. If there are no significant, unanticipated negative effects, then CAISO will initiate a stakeholder process to lower the bid floor to negative US$300/MWh and file the appropriate tariff amendments.”


“This special assessment provides insight into CAISO’s approach on renewables integration. A primary conclusion from this review is that when thresholds are reached at the level CAISO is experiencing (i.e., the 20–30 percent level), constraints are experienced on a system that was designed with a different class of equipment in mind. Policymakers should give due consideration to the impacts and potential reduction of essential reliability services (system inertia, frequency and voltage control, power factors, ride-through capability, etc.). The operating characteristics of VERs—not just the energy or capacity being provided—will fundamentally change the basic composition of essential reliability services. The system must continue to work reliably.

As shown by CAISO’s actions, there are solutions. Whether through market rules, technology tools, or regulatory requirements, various approaches exist to address concerns. This report offers recommendations and considerations related to standards that are associated with reactive power control, active power control, inertia, and frequency response, as well as steady-state, short-circuit, and dynamic generic model development.

And most damningly for AWEA:

“Finally, NERC recognizes that the question of “who pays” still exists. If this question is not resolved, it will impede further progress.” [I think AWEA should pay. It was your successful lobbying that induced these costs for ratepayers.]

But Mr. Goggin said:

“Adding wind energy to the grid does not cause any need for new power plant capacity, and actually significantly reduces the total need for power plants. Every wind integration study has found that there is more than enough flexibility on the power system today to accommodate very high levels of wind energy. “

Yet it is simply dishonest to state that very high levels of renewables can be accommodated with little problem, while NERC states that until we figure out who pays for all the substantial operational and reliability challenges those VERs bring to the system, higher penetrations (above 20%) become problematic.

Of course GE recently said the same thing to the Obama Administration: if CO2 emissions limits are set too low, renewable energy development will be limited because of the need for wind to be balanced by CT and CCGT.

As I said on EC, I would rather not read the thing to you.

But I did anyway, in between construction estimates.

One Comment for “NERC Reality vs. AWEA’s Goggin: Chasing a Ghost in Windland”

  1. NERC Reality vs. AWEA’s Goggin: Chasing a Ghost in Windland » coalitionoffreedom.com  

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