1 Renewable Technology Working Group (RTWG) July 14, 2009 Henry Durrwachter

2 ERCOT Antitrust Admonition ERCOT strictly prohibits market participants and their employees who are participating in ERCOT activities from using their participation in ERCOT activities as a forum for engaging in practices or communications that violate the antitrust laws. The ERCOT Board has approved guidelines for members of ERCOT Committees, subcommittees and working Groups to be reviewed and followed by each market participant attending ERCOT meetings. If you have not received a copy of these Guidelines, please take one now and review it at this time. Please remember of your ongoing obligation to comply with all applicable laws, including the antitrust laws.

3 Agenda ERCOT Meeting Report –TAC Solar Thermal Technology in the ERCOT Market Review Whitepaper on Issue SO-5 Discuss NERC Study of Variable Generation Review TRIP Comments (if any) Other Business – Capacity Value of Wind Next RTWG Meetings

4 TAC Meeting Report TAC approved the 2 nd Quarter TRIP Update Lively discussion about the issue of CREZ outage planning –Kent Saathoff and Dan Woodfin agreed to work on a draft proposal that will be presented at the next RPG meeting

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6 NERC Study In December 2007, NERC Planning and Operating Committees created the Integration of Variable Generation Task Force (IVGTF) IVGTF composed of a Leadership Team (6 persons) and 16 members from across North America supported by NERC staff (4)

7 NERC Study Charge to the IVGTF: 1.Raise industry awareness and understanding of variable generation characteristics as well as system planning and operational challenges expected with accommodating large amounts of variable generation; 2.Investigate high-level shortcomings of existing approaches used by system planners and operators, and the need for new approaches to plan, design and operate the power system; and 3.Broadly assess NERC Standards to identify possible gaps and requirements to ensure bulk power system reliability.

8 NERC Study Executive Summary –NERC will develop a reference manual to educate and guide the electric industry as the integration of large-scale variable generation continues. –The electric industry is also encouraged to consider developing consistent interconnection standards for: voltage and frequency ride-through capability, reactive/real power control, frequency and inertial response.

9 NERC Study Executive Summary –High levels of variable generation will require significant transmission additions and reinforcements –Additional flexible resources such as demand response, plug-in hybrid electric vehicles, and storage capacity (e.g., CAES) are needed. –Enhanced measurement and forecasting of variable generation output is needed in both real-time operations and long-term planning. –More comprehensive planning approaches (from the distribution system through the bulk power system) are needed, including probabilistic approaches at the bulk system level –Greater access to larger pools of available generation and demand.

10 NERC Study Recommendations to Industry 1.Existing bulk power system voltage ride-through requirements and the distribution system anti-islanding voltage drop-out requirements of IEEE Standard 1547 must be reconciled. 2.Industry activities (e.g., IEEE and WECC) efforts on developing short circuit and dynamic models should be support and encouraged. 3.Variable generation owners, operators, and vendors must familiarize themselves with the intent and purposes of NERC’s Modeling, Data, and Analysis (MOD) Standards.

11 NERC Study Recommendations to Industry 4.The use of probabilistic planning techniques and approaches should be investigated and adopted for the planning and design of bulk power systems with high levels of variable generation. 5.Minimum requirements and/or market mechanisms (e.g., price signals) should be developed to ensure that all generation, the bulk power system and resulting system operation has the desired characteristics (e.g., ramping requirements, minimum generation levels, shorter scheduling intervals, etc.) and to foster an appropriate resource mix that will maintain reliability. 6.Variable generation manufacturers should support the development of detailed 3-phase models required for special power system studies.

12 NERC Study Recommendations to Industry 7.State, provincial, and federal agencies and policy makers should consider: Impacts of variable generation integration on interstate and provincial bulk power system reliability in their oversight and evaluations Collaborative efforts needed to remove obstacles, accelerate siting, and approve permits for transmission line construction The importance of coordinated transmission and resource planning The issues and opportunities assocaiated with larger balancing areas and the desirability of shorter resource scheduling intervals or regional dispatch optimization.

13 NERC Study Recommendations to Industry 8.The following industry research and development activities are needed: Develop demand respons and storage technologies. Monitor the impact on reliability of distributed variable generators. Improve forecasting methods, in particular, specific applications such as severe weather and next hour(s) ramping event forecasting. Develop advanced probabilistic power system planning techniques.

14 NERC Study Work Plan Develop models for variable generation (IVGTF Planning Sub-Group - 4 th Qtr. 2010) Develop methods to calculate capacity values for variable generation (NERC Reliability Assessment Subcommittee - 4 th Qtr. 2010) Enhance interconnection procedures and standards to address voltage and frequency ride-through, reactive and real power control, frequency and inertial response (IVGTF Planning Sub-Group - 4 th Qtr. 2010)

15 NERC Study Work Plan Resource adequacy and transmission planning approaches must consider needed flexibility to accommodate variable generation (Resource Issues Subcommittee - 4 th Qtr. 2010) Integration of large amounts of plug-in hybrid vehicles, storage and demand response programs should be considered in planning studies (IVGTF Planning Sub-Group - 4 th Qtr. 2010) Probabilistic planning techniques and approaches are needed to ensure that system designs maintain bulk power system reliability (IVGTF Planning Sub-Group - 3 rd Qtr. 2010)

16 NERC Study Work Plan Existing bulk power system voltage ride-through performance requirements and distribution system anti-islanding drop-out requirements of IEEE Standard 1547 must be reconciled (IVGTF Planning Sub-Group - 4 th Qtr. 2010) Variable distributed resources can have a significant impact on system operation and must be considered and included in power system planning studies (IVGTF Planning Sub-Group - 2 nd Qtr. 2011)

17 NERC Study Work Plan Forecasting techniques must be incorporated into day-to-day operational planning and real- time operations routines/practices including unit commitment and dispatch (IVGTF Operations Sub-Group - 2 nd Qtr. 2010) Balancing areas must have sufficient communications for monitoring and sending dispatch instructions to variable resources (IVGTF Operations Sub-Group - 1 st Qtr. 2010)

18 NERC Study Work Plan Investigate impact of securing ancillary services through larger balancing areas or participation in wider-area balancing management on bulk power system reliability (IVGTF Operations Sub-Group – 1 st Qtr. 2010) Enhance operating practices, procedures and tools (IVGTF Operations Sub-Group – 2 nd Qtr. 2011) Develop a reference manual for planners and operators which describes the changes required to plan and operate the bulk power and distribution systems to accommodate large amounts of variable generation (IVGTF - 1 st Qtr. 2010)

19 Question for RTWG What issues (if any) raised in the IVGTF report need to be addressed by RTWG?

20 Capacity Value of Wind ERCOT now posts hourly load and wind data for the calendar years 2006, 2007 and 2008, which includes the installed amount of wind. At the peak load hour, the capacity value* of wind was: –2006 = 17.6% –2007 = 3.9% –2008 = 11.7% –Average ( ) = 11.1% Unofficial ERCOT data for 2009 (July 8) indicates that the capacity value for wind was higher than previous years (1,610 MW out of 8,135 MW or 19.8%). *where capacity value = MW produced/MW installed

21 Capacity Value of Wind

22 Next RTWG Meetings Friday, August 7, 2009 Tuesday, September 8, 2009 Tuesday, October 6, 2009 Tuesday, November 10, 2009 Monday, December 7, 2009