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AESO Stakeholder Information Session October 19, 2007

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Presentation on theme: "AESO Stakeholder Information Session October 19, 2007"— Presentation transcript:

1 AESO Stakeholder Information Session October 19, 2007
Wind Integration in Alberta: Market & Operational Framework Implementation AESO Stakeholder Information Session October 19, 2007 Warren Frost Vice President, Operations & Reliability Laura Letourneau, Director, Market Services

2 Purpose of Today’s Session
Ensure understanding of the Market & Operational Framework (MOF) for Wind Integration in Alberta Communicate our plans for MOF implementation and ensure stakeholders understand when and how they can participate Provide opportunity to receive input and feedback on our approach and plans for developing and implementing MOF

3 Outline Role of AESO and facts about Alberta
Reviewing Wind Integration Challenges Wind Integration Journey in Alberta Market and Operational Framework Addresses the Challenges MOF Implementation Plans Next steps

4 Role of Alberta Electric System Operator (AESO)
Independent System Operator for the Alberta Interconnected Electric System System Operations: direct the reliable operation of Alberta’s power grid Markets: develop and operate Alberta’s real-time wholesale energy market to facilitate fair, efficient and open competition Transmission System Development: plan and develop Alberta’s 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

5 Alberta’s Electric Industry
9,661 MW peak and 80% LF 11,849 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) (Wind) 497 MW 5,893 MW BC (Other renewables) 178 MW 4,412 MW Alta 869 MW Sask

6 Reviewing the challenges to integrating wind
Reliability issues beyond 900 MW – need mitigating measures, resources and the scale/costs escalate rapidly beyond 900 MW Wind power is variable – sometimes unpredictable, increases or decreases rapidly and wind patterns can be counter to load Need dispatchable generation – capability from conventional generation considering physical limits (ramping limits and start up times) Transmission upgrades – need upgrades in SE/SW of the province Large wind potential in Alberta – framework, mitigating measures, obligations and costs were not defined

7 2006 Data Generation Characteristics
12000 Off-Line Generation (Maint or Economics) 10000 Ancillary Services 8000 Dispatchable Generation MW Capacity 6000 4000 Non-Dispatchable Generation 2000 2006 Data 2weeks per division Non-Disp. Disp. MW Reserves (Active+Standby) Off

8 Need Dispatchable Resources to Accommodate Wind
Amount of dispatchable generation varies according to market conditions Market Capability Above Baseload Baseload Generation

9 Adding 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

10 Wind Integration Journey
2003 2004 2005 2006 2007 Initiate study on large scale wind 1200 MW Wind Power Facility Standard put in place with caveats on wind power management Further studies on operational issues and need for Wind Power Management Wind Variability study released Phase 1 System Impact Studies Confirms need for additional mitigating measures Phase 2 System Impact Studies Confirms need for additional mitigating measures Develop and finalize market and operational framework (MOF) Replace temporary threshold with MOF Initiate joint AESO-CANWEA collaboration 900 MW Threshold

11 Market and Operational Framework
Market and Operational Framework (March 2007) replaced the temporary 900 MW threshold – effective September 26, 2007 Premise of framework - If the System Operator receives a reasonable forecast of wind power generation, then they can establish an operating plan to accommodate the forecast wind energy by using the following resources/tools: Forecasting The Energy Market Merit Order Regulating Reserves Wind Following Services Wind Power Management

12 Challenges and Solutions
MOF SOLUTIONS Predictability of wind power Wind power forecasting rules and requirements Backup generation for wind power Energy Market, Regulating Reserves, Wind Following Wind variability, supply surplus, ramping events Wind power management, forecasting & OPPs Transmission development Credible forecasts of wind project development Wind interconnection projects Queue management Load Transmission and ancillary services Wind Facility Owners Forecasting and Power management Cost Allocation

13 Key MOF Conclusions Wind is not fully dispatchable therefore:
Wind Must Forecast supply ‘offer’ (Must Offer = Must Forecast for wind generation Wind Power forecasts will not set price - $0/price taker Regulating Reserves and/or Load/Supply Following are Ancillary Services therefore according to current Policy (TDP) and Regulation (TReg) costs will be allocated to load level of reasonable procurement of additional ancillary services is less clear and will be monitored Market participants are obligated to comply with dispatch instructions and directives from the system controller. Wind generators will meet this obligation by: installing power management technology as a condition of service complying with instruction from the system controller to limit output in the event the system cannot absorb all the forecasted or actual wind generation As per TDP, “constrained down payments will not be paid to generators”

14 What’s Changed? Replacing Threshold with MOF
Industry acceptance of mitigating tools to manage load-supply balance with increasing supply variability Wind responsibility for power management Industry acceptance order of use of tools Forecasting > Energy Market > Ancillary Services > Wind Power Management Industry acceptance on cost allocation Forecasting – wind generators Ancillary Services – load Power Management costs (operating & capital) – wind generators We have made progress on forecasting and system operator tools

15 Next Steps in Wind Integration
Currently 497 MW operating on the grid today with; No major operational issues & no increased ancillary services Gaining experience with wind and learning from events 545 MW anticipated by end of 2007 1400 MW can be accommodated with approved transmission upgrades Continued strong interest in wind development in Alberta Implement Market and Operational Framework over the next year or so

16 Implementing the Market and Operational Framework
Technical Requirements for Power Management Integration Beyond 2000 MW Diversity? Wind Forecasting Interconnection Queue Management System Operator Tools Generation Scenario Development & Tx Planning Market & Operational Rules

17 Next – Implementation Plans
Introduce leader for each work activity who will speak to: Focus/objective for work Work approach & plan If / how / when stakeholders participate Progress to date Stakeholder Input / Feedback (please hold comments and questions until all work leaders have presented, unless needed to clarify understanding) Conclusion & Next Steps

18 Wind Integration Work Streams
Market & Operating Rules (Laura Letourneau) Power Management (John Kehler) Forecasting (Darren McCrank) System Operator Tools (Ming Hu) Interconnection (Fred Ritter) Queue Management Practices Standards for Interconnection (Power Management & Forecasting Requirement) Generator Scenario Development Methodology (Jeff Nish) Transmission Planning (Ata Rehman) Diversity (John Kehler)

19 Market & Operations Rules & Procedures
Laura Letourneau

20 Structure of the ISO Rules
Primarily the combination of three documents: Market Participation Rules Settlement System Code (Load Settlement) Operating Policies & Procedures Public document posted on the AESO web site “

21 How are ISO Rules made? Need identified and reviewed by applicable business area Rule change analysis (add, modify, delete) Initial proposal Stakeholder consultation Recommendation Decision Implementation The ISO Rules Change Process is a quarterly cycle and typically takes 4-5 months to complete. Implementation may be delayed, depending on complexity.

22 ISO Rule Change Process

23 MOF – Anticipated Rule Changes
Forecasting requirements Frequency/timing Accuracy/Compliance Power Management procedures Supply Surplus - $0 offer dispatch procedures Other wind power management conditions & curtailment protocol Ancillary Services Refinement/improvements to Operating Reserve Market Development of Supply Following Service Other?

24 Approach/Timelines AESO has well established processes for the development and approval of all rule changes (Market/OPP/Settlement) These processes will be used for all rules developed to implement MOF Stakeholders, therefore, have opportunity to provide input/feedback during the consultation stages Timelines for changes are dependent on other work activities Forecasting (interim-earliest mid-08; final-earliest Dec ‘08) Power Management (earliest mid ’08) Ancillary Services

25 Operating Reserves Market Redesign Proposal
Timing Proposal will be circulated to industry in October. Opportunities for changes to product on current NGX platform as first phased in step. Interim proposal could envision: change of contract with NGX to address design issues change of procurement to auction format Decisions for Operating Reserve market will be made following normal consultation In the interim, the AESO will continue to procure Operating Reserves to meet forecasts developed by the Operations Planning Group. expect increase in levels as wind is added. 25 25

26 Operating Reserves Market Redesign Proposal
Current design overly complex for size AESO forecasts operational need at least day ahead AESO as single buyer Price established at equilibrium between bid and offers Misalignment with energy market Proposal to align Operating Reserves (OR) with energy at T-2 Dispatch OR offers from merit order instead or “pre-purchasing” Changes to pricing Moving Operating Reserves closer to real time allows for: use of near real-time forecasts Integration of the active and standby products – increasing market depth Convergence and efficiencies of assets across energy and OR 26 26

27 Operational Overview John Kehler

28 Real-time system operation
Supply-demand balancing seems simple at first - When demand changes, supply is dispatched up or down to match The trick is keeping up with changes to prevent large imbalances from occurring - So operators need additional information to help out Demand Supply

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

30 Supply-Demand Balancing Dispatch Decision
What is the ramp rate capability in the merit order over the next 10, 20, 30 minutes? What are the Regulating Reserve units doing? 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? Will I need to activate Supply Surplus / Shortfall procedures? Dispatch Decision

31 Repeat When Necessary

32 Wind Power Management John Kehler

33 “This may occur during the following conditions:
Review of Wind Power Management and the Market and Operational Framework “ In situations where the system cannot absorb all the forecasted or actual wind power generated, maintaining system security will call for wind power to be dispatched down, ramp rate limited or dispatched off” “This may occur during the following conditions: Forecast loss of wind and insufficient ancillary services or ramping services Supply surplus – thermal units will not be dispatched below minimum stable operating limits Insufficient ancillary services Unforeseen wind conditions

34 Workgroups and Industry Representation for Wind Power Management
Work groups will implement the Market and Operational Framework for wind power management Work groups will develop recommendations to put forth to industry and stakeholders for consultation Three work groups are proposed primarily due to the different mix of participants required. Work Group #1 - WPF technical requirements AESO, manufacturers, technical staff from wind power developers with operational facilities, new wind developers Work Group #2 - Supply Surplus protocol AESO, Merchant generators, Industrial generators, Importers, Wind power developers from existing facilities, new wind power developers Work Group #3 - Wind power management protocol AESO, Wind power developers from existing facilities, new wind power developers, regulating reserve providers

35 Purpose of Workgroup #1 Wind Power Facility technical requirements
Provide recommendations to the AESO on; Technical specifications at WPFs for ramp rate limiting, power limiting and supplemental over frequency control Technical specifications for WPF operators to activate / deactivate ramp rate limiting and power limiting from AESO dispatch systems The recommendations are planned to be complete during early Q and posted for industry feedback The recommendations once approved by the AESO will be forward to the Standards group for implementation using existing consultation processes

36 Purpose of Workgroup #2 Supply Surplus protocol
Provide recommendations to the AESO on a new protocol for out of market $0 offer dispatch Recommendations will include considerations for generation curtailment from the merchant, industrial and wind generation when supply surplus conditions exist. The recommendations are planned to be complete by Q and posted for industry feedback The recommendations once approved by the AESO will be forward to the OPP groups for implementation using existing consultation processes

37 Purpose of Workgroup #3 Wind power management protocol
The purpose of the workgroup is to provide recommendations to the AESO to implement ramp and power limiting protocol for; Forecast loss of wind and insufficient services Insufficient ancillary services Unforeseen wind conditions Disturbances and emergency conditions The recommendations are planned to be complete by Q and posted for industry feedback The recommendations once approved by the AESO will be forward to the OPP groups for implementation using existing consultation processes

38 Next Steps Kickoff meeting will include all 3 work groups and proposed date is Wed. Nov 7 from 9:00 to 12:00 AM. Industry or stakeholders seeking interested in participating on a work group or work groups please contact

39 Wind Power Forecasting “If the System Operator receives a reasonable forecast of wind power generation, then …” Darren McCrank

40 The Pilot Project Defining a Reasonable Forecast
Purpose: To evaluate different forecasting methods in order to find the most effective means to forecast wind power in Alberta. To leverage the experience of other jurisdictions globally To educate Alberta’s power industry, including the AESO, on wind power forecasting techniques and capabilities To recommend wind power forecasting requirements to be implemented in Alberta Increased opportunity for success as:

41 The Pilot Project Design
Trial three very different forecasting methods over a one year period: AWS Truewind (US) WEProg (Denmark) energy and meteo (Germany) 4 different geographic terrains / wind regimes in Alberta T-1 to T-48 hrs refreshed hourly 7 existing and 5 future facilities to represent geographic diversity and future expansion Data Collection by Phoenix Eng. (Calgary) – 1 met tower/site Independent analytical analysis from ORTECH (Canada) Funded by AESO Alberta Energy Research Institute Alberta Department Of Energy

42 The Pilot Project Schedule
Feb April 2007 Data Collection, model training (using historical information) April, 2007 Forecast Delivery Began Quarterly Reports Sept 07, Nov 07, Feb 08 Final Report Draft End May 08 Final End Jul 08

43 Wind Forecasting Work Group Established in July 2006
Implied task: Be prepared to complete any additional tasks assigned by the AESO Additional tasks could include designing an interim method of forecasting until the pilot project is complete This task could be triggered by operational issues or inefficient use of Ancillary Services No change to current work group membership, meetings and timelines

44 September 6, 2007 Day Ahead Forecasts (delivered 7am Sept 5)

45 The forecasts delivered at noon on Sept 6
Unforeseen Wind Condition

46 October 10, 2007 Day Ahead Forecasts (delivered 7am Oct 9)

47 System Operator Tools Ming Hu

48 Purpose Engineering tool Real-time system operation tool
To design and test protocols, procedures before implementation into OPPs Real-time system operation tool To effectively manage: The procedures in the real-time complicated real-time system operation with Efficiency, Consistency and Transparency Common basis for knowledge sharing, experience and continuous improvement

49 Status and Consultation
Design and development started in Q4 2006 Testing started July 2007 with System Operators Several improvements based on operator feedback Ready to help out the workstreams Workgroup and Consultation No external working groups due to the confidential nature of the tools and the data The AESO will update progress and demonstrate tools when applicable

50 Architecture of the Tool
System Supply and Control Energy Market Merit Order Generator ramping characteristics Regulating reserve merit order Load Supply Following (new) Wind Power Management (new) System Status What has been dispatched Actual generator output System Change Load forecast Actual and forecast Interchange Schedules Wind power forecast (new) System Considerations ATC Limits Uncertainty Analysis (new) Tool Assess the situation & risk of: - System Ramping Capability - Supply Shortfall issue - Supply Surplus (Zero-offer) issue - Minimum technical output issue OTC violation issue Energy Market Dispatch Trigger Supply surplus procedure Trigger Supply shortfall procedure Trigger Additional AS procedure Trigger WPM procedure

51 Example of 8 Hour Assessment
The graph assumes we are at midnight MO Ramping issue Alberta Internal Load MO TOP Grid Load Load served by Market EMD target Wind generation forecast TMR Wind generation forecast MO Dispatch Zero offer in MO Minimum Technical Output Numbers are not real For concept demonstration only

52 Customer Interconnections
Fred Ritter

53 Customer Interconnections
Interconnection queue management Wind power facility technical requirements

54 Technical Requirements-Interconnections
Modifications planned to the AESO’s existing “Wind Power Facility – Technical Requirements – November 15, 2004” Voltage Ride Through Governor Control Operational controls (ramp rate and power rate limits) Forecasting

55 Standard Applicability
Determine which of the existing wind power facilities will be obligated to meet the new requirements. November 15, 2004 Technical Requirements provides direction Much like the last revision to the Generation and Load Standard each wind generator will be informed of their specific obligations. Draft standard for stakeholder comment Reference in AESO Project Functional Specifications Direct customer contact

56 New or Modified Requirements
Voltage Ride Through – WECC is in the process of developing new requirements which will become an AESO requirement. Governor Control – The need for the addition of governor control and how it would be implemented. Operational controls – The technical requirements for the operation of both ramp rate limits and power rate limits. Includes SCADA signaling and the required setting ranges. Actual settings and application will be determined by System Operations and documented in an OPP.

57 New or Modified Requirements (continued)
Forecasting - The technical requirements for forecasting will be determined by the end of 2008 and incorporated into the standard as a separate revision.

58 Standards Development Timeline
Draft Standard for external comment by March 1, 2008. Final Standard by June 1, 2008. Forecasting will be a future revision planned for the end of 2008.

59 Technical Requirements – contacts
Questions, please contact either of the following: Dan Shield at (403) or OR Fred Ritter at (403) or

60 Generation Scenarios for Transmission Planning
Jeff Nish

61 Transmission Planning Approach
20-Year Outlook Generation and Load Focused High Level, Conceptual Transmission Alternatives 10-Year Transmission Plan Roadmap for Transmission Development Context for Need Applications Individual Need Applications

62 Generation Scenarios for 10-year Plan Published in 2007
Cogeneration 1,700-2,200MW Hydro 100MW Gas 400MW Coal 650-1,650MW IGCC 0-500MW A 10% reserve margin was used to determine the amount of required new generation. Other 100MW Coal 0-1,000MW Wind 1,200-2,900MW

63 Long-term Planning Underway
AESO load forecast and generation scenarios are key inputs to bulk and regional transmission system concepts Generation scenarios describe the development that may occur under the Market & Operational Framework Consultation: Ongoing with generation developers and CanWEA to create reasonable 10 and 20 year generation development scenarios Stakeholder session presenting draft generation scenarios in late November 2007 Current target to update 10-year Plan and 20-year Outlook in 2008

64 Transmission System Planning
Ata Rehman

65 Transmission Planning at the AESO
20 Year Outlook Generation and load focused High level, conceptual Transmission Alternatives 10 Year Transmission Plan - Roadmap for Transmission Development Context for Need Applications Specific Bulk and Regional Studies

66 Planning Stages for Need Applications
Need Assessment Alternative Screening Alternative Assessment and Recommendation Technical Economical Social Environmental/Landowner Impacts Need Identification Document filed with the Alberta Energy and Utilities Board (EUB) for approval Extensive Stakeholder Consultation during each Stage

67 Regional Transmission Development Initiatives
Northeast Alberta Transmission Development Interconnection Proposals at different stages Regional Plan in Initial Stages Northwest Alberta Transmission Development TFO in Facility Application Stage Wabamun/Edmonton Area Transmission Development Need Analysis Underway Central Area (Hanna, Battle River, Sheerness)

68 Regional Transmission Development Initiatives Cont.
Southwest Transmission Development TFO in Facility Application Stage Southeast Transmission Development Need Application Submitted in September

69 Wind Integration in Southern Alberta
Two Aspects for AESO Transmission Interconnection Proposals System Reinforcements Challenges Time Lines All IPs to be completed by 3rd Quarter of 2008 System Reinforcements with Extensive Stakeholder Consultation Stakeholder Consultation on System Reinforcement One-on-one meetings – early November Open houses scheduled for mid – November

70 Diversity John Kehler

71 Background MOF “ The AESO does not expressly have a role in the centralized planning of generation investments. As such, the final arbiter of the value of wind power diversification will be with the investors that allocate capital to specific wind generation facilities” That being said, many stakeholders expressed interest in better understanding diversity and market signals for diversity AESO Response to MOF Comments: “We do intend to conduct further studies to explore the degree and value of diversity as it pertains to the managing wind variability costs and the development and implementation of policy, rules and business practices

72 Principles where Diversity Changes the Behavior or Wind Power
Diversity East-West AESO studies indicated that short term variability increases with wind power development “but” not in proportion to growth AESO studies and observation of the existing WPFs is that diversity has less effect on the long term ramps Existing WPFs dispersed throughout southern Alberta

73 What do we know about diversity in Alberta today
Existing and proposed facilities are dominantly in Southern Alberta For analysis purposes the regions have been identified as SW, SC, SE and Central Existing facilities are in the SW, SC and SE areas and have strong correlation (ramp up or down together) in the 1 hour time frame It is possible that with no threshold that wind power development in Alberta will take on a larger footprint and change the behavior of wind power through diversification Wind Power Facilities Diversity East-West The most amount of correlation observed in 2007 The least amount of correlation observed in 2007 SW SC SE Central

74 Next Steps Commencing Nov 2007, the AESO will monitor and publish a weekly report that will show the diversity of the operational wind power facilities as well as other operational aspects of wind power generation. The AESO has examined diversity in the data from the 2004 system impact studies and can publish our findings of this work. The AESO will continue to work with the industry and explore the understanding of diversity as wind power developments consumes a larger footprint in Alberta. No specific work group on diversity will be developed at this time.

75 Questions/Comments on Implementation

76 Next Steps Please provide any feedback on implementation to AESO will publish comments Each work stream will keep market participants informed and up to date through our newsletter and our website. Please monitor progress and opportunities for participation. In addition, the leads for each work stream are appropriate contacts for further information.

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