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Reliable Power Reliable Markets Reliable People Implementation of Market & Operational Framework for Wind Integration Stakeholder Information Session Monday,

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Presentation on theme: "Reliable Power Reliable Markets Reliable People Implementation of Market & Operational Framework for Wind Integration Stakeholder Information Session Monday,"— Presentation transcript:

1 Reliable Power Reliable Markets Reliable People Implementation of Market & Operational Framework for Wind Integration Stakeholder Information Session Monday, March 23, 2009 Metropolitan Centre, Calgary

2 2 Agenda Welcome and Purpose of Session Role of the AESO Challenges with Large Scale Wind Integration MOF Background Recommendation Paper  WP Forecasting  WP Management  Supply Surplus Implementation and Key Initiatives  Transmission Update Summary and Next Steps

3 3 Purpose of today’s session Provide stakeholders an opportunity to ask questions, clarify information in order to submit formal comments to MOF Implementation Recommendation Paper by April 3 deadline Review key recommendations in MOF Implementation Paper  WP Forecasting  WP Management  Supply Surplus Provide a brief update on key initiatives related to wind integration Review next steps in process

4 4 Stakeholder consultation principles The AESO’s consultation process offers all stakeholders an opportunity for meaningful input All stakeholders have the right to comment on the AESO's plans, decisions and actions The experience and expertise offered by stakeholders through the consultation process improves the quality and implementation of decisions The AESO's consultation process and rationale for decisions are transparent All stakeholders have the right to be informed of the AESO’s direction, plans, the status of issues, and decisions in a timely manner The AESO measures the effectiveness of its consultation process in order to improve future performance

5 5 Alberta’s electric industry 9,806 MW peak and 80% LF 12,159 MW total generation Over 280 generating units Wholesale market with about 200 market participants > 21,000 km of transmission Interties BC (up to 780 MW) & Sask. (up to 150 MW) BC Alta Sask 5,893 MW 4,686MW (Other renewables) 214 MW (Wind) 497 MW 869 MW Over 12,000 MW of Wind Power Interest

6 6 AESO - Our core business Markets: develop and operate Alberta’s real-time wholesale energy market to facilitate fair, efficient and open competition Transmission System Development: plan and develop the transmission system to ensure continued reliability and facilitate the competitive market and investment in new supply Transmission System Access: provide system access for both generation and load customers System Operations: direct the reliable operation of Alberta’s power grid

7 7 Grid and Market Operations – Key functions Operate the AIES in a secure and reliable state  Forecast and anticipate future operations (1-24 hours)  Manage and monitor AIES (flows/volts) – within limits and standards  Manage and dispatch transmission must run requirements  Manage congestion on the system  Manage interchange/transfers on interconnections  Coordinate TFO operation & coordinate maintenance (GFO and TFO)  Integrate new transmission facilities to interconnect generation and load  Manage and direct power system restoration and emergency operations  Conduct short term adequacy assessments Operate the Alberta market according to AESO Rules and FEOC  Use merit orders to meet the supply/demand balance and ancillary services requirements  Comply with Rules for reliability and system performance (spinning and operating reserves)  Consider constraints and characteristics of individual units  Ensure fair, efficient and openly competitive operation of the electricity markets

8 8 Operational and market uncertainty Load varies by seconds, minutes, hours, by day type, and with weather  Operators are experienced and familiar with load patterns and it can be forecasted within reasonable accuracy (within few percent) Dispatchable generation can vary - typically within 1% of dispatch order  Some uncertainty with conventional supply but high capacity factors, outages are coordinated and availability is known  Supply resources may not be available or limited in capacity due to outages or de- rates Pool price affects supply and demand (price sensitive load) Significant integration of wind generation can alter familiar operational “patterns”  Semi-dispatchable resource (only when there is fuel)  More challenging to forecast (may be out by several hours and 100% magnitude)  Capacity factors vary by weather, season and time of day Operational plans are based on best available forecasts of needs and available resources  There is always error and uncertainty in our business - we are good at managing it!

9 9 Challenges to integrating large scale wind Supply-demand balancing is more challenging with wind power – wind can be unpredictable, increase or decrease rapidly and patterns can be correlated or counter to load Limits to how much wind a system can accommodate – need access to flexible resources considering physical limits (ramping and start up times) Reliability issues > 900 MW – need mitigating measures, resources and the scale/costs can escalate Market Impacts – can increase variability and uncertainty Need Transmission – upgrades in southern part of the province and recognizing diversity SupplyDemand

10 10 Need dispatchable resources to accommodate wind Baseload Generation $0 Offers Market Capability Above Baseload Amount of dispatchable generation varies according to market conditions

11 11 Wind power diversity and ramps In Alberta there are times when there is diversity amongst wind power facilities There are times when there is little to no diversity amongst wind power facilities

12 12 Correlation between pool price and wind power Wind generation offers into the market at zero dollars Pool price tends to be lower when there is a significant amount of wind generation Three factors influencing wind project development 1.Pool price 2.Federal incentives 3.Environmental attributes 2007 Data

13 13 Wind power capacity factors Over 1,400 GWh of electric energy and annual capacity factor of about 35 % in 2007 Capacity factors of wind power  exceed 50 % during some periods or  minimal capacity on some days (summer and winter peaks) due to prevailing weather conditions AESO and Market participants:  Must become familiar with characteristics and  Factor it into day-day operating practices, decision making processes and offer strategies Spain Wind Power Distribution (2001 – 2005)

14 14 AESO’s wind integration journey Study 1200 MW of Wind Power New Standard specific for Wind Power Facilities Phase 1 Study Study up to 2000 MW Confirms need for Mitigating Measures PH II Study and Temporary Threshold Confirm effectiveness of Mitigating Measures Market and Operational Framework (MOF) introduced AESO- CANWEA collaboration Initiate Wind Power Forecasting Pilot 2008 Workgroups on Supply Surplus and Wind Power Management Finalize Forecasting Pilot 2009 Implement MOF Recommendations Workgroup findings incorporated into paper CanWEA Award UWIG Award

15 15 The AESO’s commitment “Our ultimate objective… is to refocus the dialogue with industry to integrate as much wind into the Alberta system as feasible without compromising system reliability or the fair, efficient, and openly competitive operation of the market.”

16 16 How to add more wind? To integrate more wind the operator needs to “know what to do” and “have the necessary resources/tools” Current resources/tools  The energy merit order  Regulating reserves New resources/tools  Wind power forecasting  Additional regulating reserves  Supply / load following service, (i.e. the service would accommodate pumped storage, batteries, others)  Power and/or ramp-rate limiting of wind power facilities

17 17 Challenges and solutions CHALLENGESMOF SOLUTIONS Flexible Resources for wind power EMO, AS, load products and Load-Supply following Wind variability, supply surplus, ramping events Predictability of wind power Wind power forecasting rules and requirements Wind power management, forecasting & Supply Surplus Protocol Transmission development Transmission plans, NID’s and forecasts of wind projects Wind interconnection projects Queue management Cost Allocation Load Transmission & Ancillary Services Wind Facility Owners Forecasting and Power management

18 18 Wind power development ( ) Additional Regulating Reserves Wind Power Forecasting, Wind Power Management Supply Surplus, DDST

19 19 MOF Recommendation Paper Next major step in the implementation of the Market and Operational Framework (MOF)  Represents the culmination of valuable work done through industry work groups.  Provides an overview of the MOF  Describes current system resources and mechanisms used to manage variability and ramps (load and supply) on the power system and challenges with large scale integration Provides a set of recommendations regarding enhancements to rules, practices and procedures and requirements needed to implement the MOF:  Wind power forecasting requirements  Wind power curtailment protocol  Supply surplus protocol

20 Reliable Power Reliable Markets Reliable People Wind Power Forecasting John Kehler

21 21 Wind Forecasting is a Foundation To integrate more wind the operator needs to “know what to do” and “have the necessary resources/tools” over all timeframes An wind power forecast (including uncertainty) enhances AESO ability to maintain system reliability In order to maintain reliability we must learn how to deal with  Forecast errors: timing and magnitude  Forecast uncertainty Forecasting enables the efficient use of resources

22 22 Forecasting The biggest challenge to forecasting is to predict when ramping starts and ends The benefit, if done well, will allow us to make efficient use of resources to manage the ramps 2 hour ahead forecast

23 23 Ramp Statistics In the pilot project the AESO applied a 20% per hour wind capacity criteria to define a wind power ramping event  Pilot Project Results ramp up/down events This metric is not a concern at 545 MW of wind generation At higher levels of wind penetration (i.e MW +) an event where 20 % of installed wind capacity/hour is ramping will become a significant event depending on when it occurs  A 400 MW/hour in opposition to a typical load ramp will be a significant event

24 24 Wind forecasting Pilot project  3 vendors – ‘AWS Truewind (USA)’, ‘WEPROG (Denmark)’ and ‘energy and meteo (Germany)’– contracted to study wind characteristics and develop methodologies that work for Alberta: –Ramping – how to detect large ramps –Uncertainty – how to determine level of uncertainty in forecast –Facility Owner – define requirements for wind power facility operators –Regulating Reserves – how to use forecasts to support AS procurement –Information to Industry – how to provide forecasts to market participants  Plan to have wind power forecasting operational by December 2009

25 25 What we learned from the pilot Learning = Opportunity Alberta difficult to forecast wind with the forecast errors higher than other jurisdictions  Mountains plus Pacific Ocean to west add complexity and limit upwind data density  Complex weather: Chinooks Forecasts need to be tuned for system operator needs  Ramping events – some significant ramp events missed. Of missed events, the down ramps were the most challenging

26 26 Wind power forecasting recommendations Recommendation 1 Centralized forecasting approach Recommendation 2 RFP forecasting service provider should proceed as soon as practicable Recommendation 3 Commence consultation on rules, procedures, standards and technical requirements regarding submission of wind generator forecast data/information including  data requirement such as turbine availability and on-site meteorological data as described above,  communication protocols, and  data quality required from wind generation facilities (or individual forecasters) to deliver forecasts to the AESO

27 27 Wind power forecasting recommendations (cont) Recommendation 4 Determine the capability, resources, systems and time required to perform the data management function.  In parallel, the AESO will include data management as an optional requirement in the wind forecasting RFP Recommendation 5 Monitor forecasting, market and operational results and develop measures of forecasting accuracy.  The AESO intends to leverage available data and forecasting resources toward this end Recommendation 6 Aggregate wind forecasts should be transparent and made available to all market participants, particularly near term to real time.

28 28 Recommendation for centralized forecasting WPF AESO Wind Power Forecast Service Provider Meteorological data, MW output and turbine availability from each WPF Data from Numerical Weather Prediction models (i.e. from Environment Canada) Wind Power Forecast data and information to the AESO Centralized meaning “one wind power forecasting service provider for all WPFs”

29 29 WPF forecast data and information Options discussed for WPF data are: 1)WPF data to Third Party then to Forecaster then to AESO 2)WPF data to AESO then to Forecaster 3)WPF data to Forecaster then to AESO Preferred options are 2) and 3) Power Curve for each WPF

30 30 Possible cost and allocation to WPF owners Based on cost experience during the wind power forecasting pilot project, provision of a forecasting services and data management could be less than $500k annually.  Costs borne at a WPF for met towers, data loggers and communication are not considered in this cost.  With 1000 MW of wind power this would be less than $0.20 per MWh of wind power generators

31 Reliable Power Reliable Markets Reliable People Wind Power Management John Kehler

32 32 The operational issues There may be times that the system cannot absorb all the wind generation The AESO would first consider the forecast demand, the wind power conditions, forecast wind power and what is available in the energy market for dispatch before resorting to wind power management  To help the system controllers recognize and manage these situations, the AESO is developing a Dispatch Decision Support Tool The following conditions could trigger the use of wind power management:  Forecast loss of wind and insufficient ancillary services or ramping services  Supply surplus conditions  Insufficient ancillary services  Unforeseen (i.e. not forecasted) wind conditions  Disturbance and emergency conditions During over frequency conditions wind power facilities will need to participate in frequency control

33 33 Wind power management System Operation There may be times when wind power is forecast to ramp down and dispatching EMMO up may require pre-curtailment of wind generation to ensure supply- demand balance There may be times when wind power is forecast or is ramping up and limiting wind generation may be required until such time the EMMO can catch up

34 34 The operational issue Day ahead forecasts miss the event 2 hour ahead forecast miss the event System Operator would determine how much wind MW the system can accommodate. Then issue a power limit Actual MW Forecast MW Unforeseen Wind Power Event

35 35 WPM recommendations Pro-rata allocation of system wide wind curtailments; Use of Potential MW Capability to allocate wind power curtailments; and, Curtailments should be re-assessed and re-allocated: –every 20 minutes if the limit for any one WPF has changed by greater than 5 MW

36 36 Description of potential MW capability Measured wind speed and direction Local computer calculates Potential MW from the turbine WPF SCADA System collects and sums the Potential MW from all turbines at the WPF Utility SCADA system sends data to the AESO

37 37 Illustrative Example of WPM Start of System Wind Limit event WPF limits based on current wind power conditions at the time limit is issued WPF limits re- allocated as Potential MW Capability changes Potential MW CapabilityWind Power generated End of System Wind Limit event

38 Reliable Power Reliable Markets Reliable People Supply and Surplus Anita Lee, P. Eng. Manager, Operating Policies and Procedures

39 39 Supply and surplus Wind generators and co-generation are currently exempt from OPP 103 (Dispatching Multiple $0 Offers) for managing supply surplus conditions The MOF clearly indicated that, with higher levels of wind generation, the existing supply surplus management protocol needed to be reviewed

40 40 Supply and surplus WG recommendation: Market be first given an opportunity to take voluntary actions when $0 SMP is anticipated or is occurring Required changes:  Provide market indication of potential supply surplus conditions, similar to Short Term Adequacy (STA) assessments for supply shortfall

41 41 Supply and surplus WG recommendation: all supply facilities should participate in reducing MW generation during supply surplus conditions subject to a new “Minimum Operating Level (MOL)” Required changes:  Define MOL as:  A physical, not an economic constraint, and is  The lowest generation level for a generator as limited by the following requirements: legal/regulatory, environmental, health and safety, equipment reliability, operating level required to serve dispatched ancillary services, or operating level required to prevent damages to third party equipment

42 42 Supply and surplus Required changes (cont’):  Define a mechanism/process for pool participants to declare and submit the MOL  Revise the "inflexible block" current definition to permit partial dispatch of a $0 inflexible offer  Wind generators: MOL = 0 MW and is flexible

43 43 Supply and surplus WG recommendation: $0 SMP Management Protocol 1.Curtail import transactions 2.Considering transmission system operating and reliability constraints (area TMR requirements, etc), apply the following, if effective*: Curtail flexible $0 blocks, by pro-rata** Curtail one or more inflexible $0 blocks to the asset’s MOL*** 3.Curtail one or more assets to 0 MW (go off line), considering the asset’s minimum off time

44 44 Supply and surplus *Consideration for “effectiveness”:  If curtailment allocation by pro-rata results in small volumes of curtailment to a large number of generating assets, it may not be effective.  This issue will be explored in the development of the related OPP.

45 45 Supply and surplus **Consideration for “fairness”:  Flexible blocks and inflexible blocks should be used in the protocol in a fair manner (i.e. one type should not be treated preferentially than the other)

46 46 Supply and surplus ***Consideration for impact to a co-gen’s DTS contract:  If the generation at a co-gen facility is curtailed (e.g. to its MOL), the co-gen facility may have to import more supply from the AIES causing ratcheting of its contracted DTS level  This requires further evaluation and if there are inappropriate consequences, the AESO may consider amendments to the AESO tariff

47 Reliable Power Reliable Markets Reliable People Technical Requirements/Standards John Kehler

48 48 Technical requirement standards Interconnection Standards  In Nov 2004, AESO developed and implemented an interconnection standard specific for wind power facilities  Standard includes voltage ride through (low and high voltage), static and dynamic reactive power and voltage regulation  Standards will be updated to include: –Wind Power Management (ramp rate limiting, power limiting and over frequency governing) –SCADA and Communication requirements for Wind Power Management –Requirements for Wind Power Forecasting

49 49 Over frequency control Over frequency conditions can occur in Alberta when;  Our interconnections trip during a heavy export  Disturbances within WECC Arresting the over frequency condition requires governor control systems on the generator units To ensure that wind power facilities contribute to arresting an over frequency condition, a virtual governor (over frequency control) is to be added to the wind power facilities. Significant over frequency conditions (greater than 60.1 Hz) can occur a couple times per year This requirement was identified in the 2004 standard

50 50 Over frequency control Reduce the MW output to ‘over frequency’ conditions

51 51 Over frequency control System frequency can momentarily go above Hz  2008 data suggests – 5% probability between Hz and 60.1 Hz – 0.01% above 60.1 Hz  Based on the proposed droop characteristic for WPFs this would have been less than 0.02% production in 2008.

52 Reliable Power Reliable Markets Reliable People System Operator Tools John Kehler

53 53 Supply-demand balancing input What is changing? How good is the load forecast today? What is the wind power forecast? What is the ramp rate? What are the Interconnection schedules? What is the load forecast change? What is the ramp rate? How good is the wind power forecast today? Net Change Ramp rate requirement Is the merit order changing? What generators are still ramping from the last dispatch? How much energy is still to come?

54 54 Supply-demand balancing Dispatch decision What are the Regulating Reserve units doing? What is the ramp rate capability in the merit order over the next 10, 20, 30 minutes? How much capacity to dispatch to get the required ramp rate ? Do I need to dispatch more ancillary services? Will I need to activate any Wind Power Management procedures? Dispatch Decision Will I need to activate Supply Surplus / Shortfall procedures?

55 55 Repeat when necessary

56 56 System operator tools Dispatch Decision Support Tool (NEW)  Provide visibility of capacity and ramping capability of the energy market  Incorporate wind power forecasting  Provide hourly and 6 hour outlook on market conditions (including wind)  Prototyping/testing with operators Wind Power Forecasting Tool (NEW)  Incorporate requirements from the wind power forecasting pilot project Wind Power Management Tool (NEW)  Automate the wind power management protocol and procedures (limits or ramp rate limiting) Supply Surplus Tool (update existing tools)  Automate the supply surplus protocol and procedures Short Term Adequacy Tool (update existing tools)

57 57 Functionality of DDST Resources Energy Market Merit Order Generator ramping characteristics Regulating reserve merit order Load Supply Following (future) Wind Power Management (new) What Is Going to Change System Change Load forecast Actual and forecast Interchange Schedules 3 Modes for Wind power forecast Input External Wind Power Forecast Persistence Forecast Persistence Ramp Forecast System Considerations ATC Limits Uncertainty Analysis Where We Are At System Status What supply has been dispatched What is the Actual generator output Heart of DDST Provide 1 hr forecast of supply demand balance and a 6 hr outlook What If? System Control can toggle up and down the merit order to see the impact of the dispatch on the forecast imbalance

58 Reliable Power Reliable Markets Reliable People Update on Key Initiatives and Next Steps Warren Frost, P. Eng. Vice President, Operations & Reliability

59 59 Transmission is a key enabler Transmission and intertie capacity are critical enablers for the development of wind generation resources in order to  Interconnect variable energy resources located in remote regions of the province  Deliver ramping and ancillary services from inside and outside Alberta to balance supply and demand  Exchange any surplus energy with other jurisdictions. Direction is consistent with the PES (announced in December 2008), which sets the context for comprehensive upgrades to the transmission system  Develop transmission to areas of renewable and low-emission energy  Ddevelop additional interties to ensure access to adequate electricity supply and to provide great export opportunities for producers AESO has advanced plans for the south region of the province to accommodate the large scale development of wind generation

60 60 Wind capacity and generation scenarios

61 61 Transmission development to interconnect wind generation SW Facilities Application AUC approved AltaLink’s application March kV Pincher Creek to Lethbridge Interconnect 1000 MW of wind South NID AUC filed Notice of Hearing March kV loop to interconnect up to 2,700 MW of wind over next 10 years East Central Alberta (Hanna area) Consultation on need underway (10 Open Houses recently completed) Interconnect 1,400 MW of wind Interconnection Queue Management Strong interest in wind development – over 12,000 MW in the queue Queue Management Business Practice and associated project milestones ensure that projects are progressing

62 62 Summary and next steps Recommendation Paper & Comment Matrix posted to AESO website – March 5 Stakeholder Consultation Session – March 23 Deadline for stakeholder comments on the paper – April 3 AESO publishes stakeholder comments received to website – April 17 Final Recommendation Paper posted to AESO website (includes stakeholder comments & AESO responses) – Q First Phase of System Operator Tools Operational – Q Wind Power Forecasting RFP Issued – 2Q 2009 Consultation on proposed ISO and OPP Rule changes indicated in the Final Recommendation Paper  Forecasting Obligations  Wind Power Management  Supply Surplus Protocol File with AUC, rules, operating policies and procedures that govern the integration of wind integration including wind power management, forecasting obligations, and supply surplus conditions – Fall 2009

63 63 Process Comments on Recommendation paper Post comments Post final recommendations Develop Draft rule/OPPs Post Draft rule/OPPs for review Post comments Post final rule/OPPs Approve and file with AUC

64 64 Next steps

65 65 Summary 543 MW on AIES without operational issues or increase in AS  There has been no requirement to increase Regulating Reserves volumes  System performance is good (CPS2 at 98% and no OTC violations)  This is consistent with our study results from 2005 Gaining experience (ISO and industry) and learning from events  Collaborative relationship with CanWEA has been invaluable  Weekly wind reports published and continuous learning  NERC IVGTF  Continued collaboration with UWIG We must be prepared for the large scale integration of wind This is the next major step in the implementation of the Market and Operational Framework (MOF)  Need your input on the recommendations regarding enhancements to rules, practices and procedures and requirements needed to implement the MOF: –Wind power forecasting requirements –Wind power curtailment protocol –Supply surplus protocol

66 66 Questions

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