1. Page 1 California ISO – Internal Use Only – DRAFT CAISO’s Market and Reliability Operations, September 21, 2015 EMMOS Users Conference Indianapolis, IN September 21, 2015 Hani Alarian Director, Power Systems Technology Operations, CAISO

2. Page 2 California ISO Building

3. Page 3 Agenda Getting to know the California ISO Knowing the plan for renewable Operations challenges with renewables CAISO Future EMS Market and reliable operations Considerations and Summary

4. Page 4 California ISO by the numbers  65,225 MW of power plant capacity (net dependable capacity)  50,270 MW record peak demand (July 24, 2006)  27,076 market transactions per day  26,024 circuit-miles of transmission lines  30 million people served  244 million megawatt-hours of electricity delivered annually

5. Page 5 Extends real-time market and 5- minute dispatch outside the ISO Builds on existing market platform Easily scalable, offering low-cost, low risk option to new entities Provides integration, economic, and reliability benefits. PacifiCorp go-live Nov. 2014 NVE Go-live Nov 2015 APS and PSE Oct 2016 PGE Announced Energy Imbalance Market

6. Page 6 Market Footprint CAISO – SCE – PG&E – SDGE – VEA – PAC - Planned EIM BAA – PACE – PACW – NVEP Nov 2015 – PSE – Oct 2016 – APS – Oct 2016 – PGE - Announced

7. Page 7 Generating resource mix

8. Page 8 California has the highest renewables portfolio standard in the continental United States 20% 2011- 2013 25% 2014- 2016 33% 2017- 2020 50% 2020-2030 +5% +8% “In 2015, Over 6,500 MW of Solar peak and over 7,000 MW of Wind Peak.

9. Page 9 Variable renewable generation What was “load following” is now “energy imbalance following” Regulation is leaned on to meet energy imbalance Forecast uncertainty for both load and generation System flexibility with wider operating range and higher ramp rate is needed Increase in the occurrence and magnitude of overgeneration and undergeneration More unit cycling Over generation during the day 9

10. Page 10 Wind Generation and System Reliability Modern wind turbines can now contribute to the grid reliability and efficiency – Voltage/Var control and regulation of power factor – Fault ride-through low and high voltages or low and high frequency ranges – Real power control, ramping, and curtailment using unit set- point control on wind turbines with blade pitch-control – Primary frequency regulation using unit set-point control (active-stall, pitch-control) – Inertia response through special control mechanism – Short-circuit duty control to limit magnitude of fault current

11. Page 11 308 MWs 1687 MWs 1385 MWs 7 Hrs MWs Hrs 1320 MWs 4 Hrs 1386 MWs 66 MWs 1972 MWs Peak Nov 24-25 2011 Wind Event

12. Page 12 Variable Energy Generation Forecast at ISO In one year the wind peak went from under 1600 MW to above 3300 MW — and now is 4769 MW In one year solar peak went from around 500 MW to almost 1000 MW — and now is 6506 MW Photo voltaic (PV) rooftops have grown at similar pace but no telemetry or solid numbers that are affecting the load (estimate 2,500 MW) The growth is not linear More than 1200 MW drop caused by wind

13. Page 13 Forecast methods for renewables and their limitations Persistency – does not predict the turns Autoregressive – not as accurate Weather sensitive – weather forecast accuracy Blend/Ramp – good to blend between methods Forecast the confidence band

14. Page 14 Future Challenges Reliability Requirements Forecast – load – generation – flexramp – operating reserve (spin and non-spin) – regulation Predictive Market – using the prediction of the future imbalance instead of the adaptive rear view mirror Advance Application Intelligent Agents Visualizations — tools, tools and more tools

15. Page 15 July 3, 2011 Solar Event – 65% production drop

16. Page 16 What the future holds for ISO to follow net load Load & Net Load (MW) 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 20,000 22,000 24,000 26,000 28,000 30,000 32,000 34,000 36,000 38,000 40,000 42,000 44,000 46,000 0:001:303:004:306:007:309:0010:3012:0013:3015:0016:3018:0019:3021:0022:300:00 LoadNet LoadWindSolar A typical day in winter/spring 2020 Wind & Solar (MW) 8,000 MW in 2 hours 6,300 MW in 2 hours 13,500 MW in 2 hours

17. Page 17 Net load pattern changes significantly starting in 2015 Potential Over-generation Typical March Day – significant change starting in 2015

18. Page 18 Non-flexible supply creates dispatch issues and potential overgeneration conditions

19. Page 19 Solar Production Rate of Increase in California (eia.gov Energy Watch June 2014) CA 5/2014: Solar production: 4,100 MW (12% of demand) variability risk managed for grid reliability TX 03/2014: 10,000+ MW from wind on several days

20. Page 20 Changes in the industry on the horizon affecting the grid renewable generation – consistently setting new peaks wind unpredictable output (>4,768 MW peak) – solar unpredictable output for telemetry generation (6,506 MW peak) – photo voltaic (PV) on rooftops without telemetry (2,300 MW estimate) NERC CIP/ security requirements Accurate power flow at the seems and intra-zones in real-time Inter-ties limited to hourly changes Many small generations than few big ones Demand response and storage devices Visualization and situational awareness

21. Page 21 Challenges for the grid in the horizon Unpredictable generation in the horizon depending on weather forecast More ramp rate is required to meet sudden changes in weather True actual load is deformed by PV roof tops Need to know accurate and immediate power flow as it is becoming more dynamic Implemented inter-ties schedule 15 minutes market instead of only hourly Need to know the sequence of event immediately during important events (Sep 8, 2011 outage) Handle negative generations, storage devices, and demand response

22. Page 22 New paradigm to view grid operations To view the Past: Use a historian with displays – EMS with History To view the Present: Use the EMS current telemetry and State Estimator To view the Future: Use the market — the market is the best forecast of the reality to come from current time up to several days in the future We are working to provide operators visualization to tie the past, present and the future Operators’ confidence is increased as we provide the visualizations and accuracy of the forecast See the biggest footprint for past, Present, and the Future Visualization is the method for operators to see and analyze the past, operate the present, and proactively make decisions by preventing a negative future

23. Page 23 Solutions are helped if you think this way EMS provides reality and history of the reality EMS is the system used to operate reality The market is the forecast of the reality to come Improve the forecast of reality Provide operators visualization of the future, current, and the past Operators’ confidence is increased as you provide the visualizations and accuracy of the forecast Must see the full footprint

24. Page 24 Solutions the future must provide Better forecast beyond load forecast – forecast wind generation – forecast solar generation – forecast PV and use it a variable into the load forecast – forecast ancillary services required and not the minimum that NERC requires – forecast the amount of ramp rate required – forecast system stability voltage stability dynamic stability system inertia handling a DCS

25. Page 25 Solutions the future must provide (continue 1) Improve NERC CIP security to always be way ahead of the requirements Document it – if it is not documented you don’t get credit for doing it Bigger footprint of the network model with more accurate details Control area scheduling should be fully designed to handle 15 minutes schedule changes including hourly details for integrated and instantaneous Simplified interfaces, protocols, and telecommunications to EMS to accommodate tiny generators, electric storage devices, and demand response

26. Page 26 Solutions the future must provide (continue 2) Allow regulation for demand the same as generations Separate regulation up and down as demand wants to regulate only up (down for the demand) while renewable resources want to only regulate down SE must do topology processor estimation Telemetry coming to the EMS must accommodate lower cost solutions Contingency analysis accuracy of the future must be as good as the current situation all the time Synchrophasor and PMU need to be part of the advanced applications

27. Page 27 Happened in April 29, 2014 Here is October 23, 2014 at 14:37 about 2000 MW drop Next one August 21, 2017

28. Page 28 Happened in April 29, 2014 Here is October 23, 2014 at 14:37 about 2000 MW drop Partial Solar Eclipse Next one August 21, 2017

29. Page 29 New Year 2014 Slide 29

30. Page 30 Primary Market Subsystems Systems Overview of Applications MARKET DAM EMS OASIS SIBR RTM Settlement Operator Displays and User Interface CMRI ITS/ CAS ADS OMS Master File Forecast RLC EMMS

31. Page 31 CAISO Features of Future EMS 100% availability through Active-Active design Real-time Contingency Analysis up to 10,000 contingencies evaluated under 2 minutes Scalable and Sized for the full WECC model Accessible through a Data Access Layer (DAL) Ready for a Common User Interface (CUI) Fully ready to use the Enterprise Management Model System (EMMS) Fully based on Service Oriented Architecture (SOA) design

32. Page 32 Changes in the Electric Industry affecting us Renewable Generation – Setting new peaks on a weekly base – Wind unpredictable output (4769 MW peak) – Solar unpredictable output for telemetry generation (6506 MW peak) – Photo Voltaic (PV) on roof tops without telemetry (2500 MW Estimate) Higher expectation of reliability Higher expectation of security Smart Grid Immediate answers Situational awareness through Visualization

33. Page 33 Considerations Expect technology to improve Accept that the future is not a perfect forecast Plan on constantly improving Evaluate and adopt new good ideas Demand Response will play an important role Storage devices should be part of the solution Plug-in Electric Vehicles (PEV) is in the future Do not assume current solutions or current technologies are the only option

34. Page 34 Summary Data must be timely in real time Do not put limitations on yourself based on the past Systems must be thought of as continuum for the past, current, and the future If your forecast is not accurate reliability suffers You cannot evaluate or trust forecast if not compared to actual Operators must trust the forecast Forecast must be based on visualization and not based on numbers The market is almost becoming part of reliability and definitely the most and best contributor

35. Page 35 Questions and Comments Thank you Your turn Hani Alarian Director, PSTO at CAISO halarian@caiso.com 916-351-2393 Work 916-673-7673 Cell

36. Page 36 Renewable Profiles

37. Page 37 Folsom Control Room

38. Page 38 Questions