1. Reliable Power Reliable Markets Reliable People Wind Developments in North America APEX Conference – Sydney, Australia October 14, 2008 Warren Frost, Vice President Operations & Reliability

2. 2 Outline Background & Alberta facts Role of the AESO Challenges to Integrating Large Scale Wind Power AESO Approaches NERC Variable Generation Task Force

3. 3 Alberta’s Electric Industry 9,710 MW peak and 80% LF 12,098 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 4,635 MW (Other renewables) 178 MW (Wind) 523 MW 869 MW Over 11,000 MW of Wind Power Interest

4. 4 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

5. 5 Challenges to Integrating Wind Supply-demand balancing is complicated by wind power – wind can increase or decrease rapidly and patterns can be counter to load Limits to how much wind a system can accommodate – wind needs flexible resources Transmission upgrades – need upgrades in southern part of the province Worked with industry to agree on framework and now implementing:  Wind forecasting  Ramping resources  Wind power management  Operational rules and tools SupplyDemand Wind and Load do not correlate well

6. 6 AESO’s Wind Integration Journey 20032004200520062007 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) AESO- CANWEA collaboration Initiate Wind Power Forecasting Pilot 2008 Implement the MOF Workgroups on Supply Surplus and Wind Power Management Finalize Forecasting Pilot

7. 7 Market and Operational Framework AESO Commitment – the AESO is committed to integrating as much wind as is feasible Market and Operational Framework (MOF) – defines necessary measures and cost recovery to integrate wind on a large scale to:  Ensure reliability and fair, efficient and openly competitive operation of the market Premise of the MOF: If the System Operator receives a reasonable forecast of wind power generation, then the System Operator can create operating plans by using the following tools (in order of priority and use)  Wind forecasting  Energy Market Merit Order  Regulating Reserves  Wind Following Services  Wind Power Management

8. 8 Market and Operational Framework MOF provides certainty regarding measures, obligations and cost recovery:  Transmission – wind generators pay for local interconnection and system upgrades paid by load (legislation)  Wind Forecasting – wind generators pay for costs of wind forecasting  Ancillary Services – paid by load (legislation)  Wind power management – wind generators must install WPM  Interconnection standards – wind generators must comply with LVRT, reactive power and voltage requirements AESO-CanWEA Advisory group – established to provide advice to AESO and collaborate on wind integration issues Industry Working Groups – established to provide AESO recommendations (before formal rule process) regarding:  Wind forecasting, wind power management, supply surplus procedures and upgrades to interconnection standards

9. 9 Implementing the Market and Operational Framework 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

10. 10 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 June 2009

11. 11 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)

12. 12 Transmission Transmission Planning and System Development  Advancing significant Transmission reinforcements to accommodate wind Interim Measures  Dynamic thermal line ratings (DTLR) – piloting DTLR on SW transmission line this summer  Remedial Action Schemes – 4 RAS schemes in place: 1 initiated by N-1, 1 initiated by N-1 and overload and 2 initiated by overload, communication failure and/or N-1  Operating Policies and Procedures – area OPPs to deal with overloads and RAS Interconnection Queue Management  Strong interest in wind development – over 11,000 MW in the queue  Queue Management Business Practice and associated project milestones ensure that projects are progressing

13. 13 Learnings and Current State 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 Working groups underway to implement wind forecasting, wind power management, supply surplus protocols and interconnection code upgrades AESO recognized for wind integration efforts by UWIG 2008 award Gaining experience (ISO and industry) and learning from events  Collaborative relationship with CanWEA has been invaluable  Weekly wind reports published  NERC IVGTF

14. 14 Integration of Variable Generation Task Force (IVGTF) Scope The Task Force will prepare:  A concepts document: philosophical & technical considerations  Recommendations: practices, requirements & reliability standards The document will include:  Planning timeframe issues  Operational Planning and Real- time Operating timeframe issues  Review NERC Standards for gaps  Review of future developments: i.e. storage, EHV  Conclusions and recommendations

15. 15 Draft Summary Report prepared Comments received from the IVGTF members Meeting held in August  Finalize recommendations and actions  Editorial meeting on Summary Report Coordination with UCTE- EWIS Next Draft of the Summary Report targeted for mid- September IVGTF Status Report

16. 16 Keeping Reliability in the Balance Bulk power system reliability must be maintained All generation must contribute to system reliability Standards must be fair, transparent & performance-based Planners & operators must understand the challenges of large scale variable generation integration Variable generation integrated into planning & operations New Planning/operating tool requirements described in terms of bulk power system reliability performance

17. 17 IVGTF Preliminary Recommendations Request of Planning Committee: Reliability Assessment Subcommittee (RAS) request on- peak capacity based on hours of risk Study resource adequacy assessment and transmission planning processes Identify necessary data requirements needed to support planning Engage IEEE Power and Energy Society to reconcile voltage ride- through requirements & IEEE 1547 Review Modeling, Data and Analysis Standards (MOD)

18. 18 Request of Operating Committee: Review of FAC-001 & COM-002  Forecasting  Interconnection  Communications Study operational forecast tools suitable for large amounts of variable generation Study the influence on reliability of larger balancing areas IVGTF Preliminary Recommendations

19. 19 Request of Operating & Planning Committee: Approve the recommendations from the final report Study the impact of distributed generation on bulk power system reliability Study the reliability influence of larger balancing areas IVGTF Preliminary Recommendations

20. 20 IVGTF Schedule Complete Summary Report (October) Complete Reference Manual (November) OC/PC Comments (December) Roll-out to Interested Parties (Jan-Feb 2009) Final Approval (March 2009)

21. 21 Questions