presentation by george gross university of illinois at urbana-champaign seminar “electric...
TRANSCRIPT
presentation byGeorge Gross
University of Illinois at Urbana-Champaign
Seminar “Electric Utilities Restructuring”Institut d’Electricité Montefiore
Université de LiègeDecember 8, 1999© Copyright George Gross, 1999
OPPORTUNITIES AND CHALLENGES
IN THE RESTRUCTURED ELECTRICITY
SYSTEM : POSSIBLE STRATEGIES
FOR DEALING WITH THEM
OBJECTIVES OF THE PRESENTATION
Review the principal thrusts of electricity restructuring
Provide some results in the California restructuring
Identify key challenges and issues of concern in
monitoring and control
Define the scope of research and possible strategies
required to meet the needs of real-time control in the
restructured environment
Throw some light on the complexities of congestion
management
OUTLINE
Review of restructuring impacts
The unbundled open access transmission system
Example : California restructuring
Scope of issues, challenges, and opportunities in
monitoring and control
Re-examination of control laws
Analytical and software tool enhancement
Concluding remarks
Customers
Self-generation
IPP
THE EXISTING ELECTRIC INDUSTRY STRUCTURE
Generation
Transmission
Distribution
Customer Service Customer Service
Distribution
Transmission
Generation
THE EXISTING ELECTRIC INDUSTRY STRUCTURE
Customers
Self-generationIPP
Generation
Transmission
Distribution
Customer Service
Customer Service
Distribution
Transmission
Generation
THE VERTICALLY INTEGRATED UTILITY AND SERVICE BUNDLING
All services are bundled
The basic design was for the entire system to meet the utility’s
own customers’ needs:
transmission loading and voltage specified in such a way as to
supply all the customers’ load and energy demands under all
including peak demand conditions;
generation capacity installed was sized for the same
purposes;
voltage regulation, frequency control, VAr support, generation
and VAr reserves were all bundled into this single design for
those very purposes
MAJOR THRUSTS OF RESTRUCTURING
Customer choice
Open access transmission
Unbundled services
Development of distinct markets
Establishment of new structures and new restructuring
paradigms
Congestion management
BASIC REQUIREMENT IN COMPETITIVE MARKETS
All players -- buyers, sellers, brokers -- require non-
discriminatory transmission services to get products to markets
or to acquire products competitively from the supplier of choice
Each transmission customer needs to have service comparable
to that available to native loads of the transmission service
provider
Transmission service is the most critical element in making
competitive electricity markets work
“COMMON CARRIER” TRANSMISSION SERVICE
Broker /marketer
Broker /marketer
Broker /marketer
Transmissionsystem
Utilitygeneration
Oth
erut
ility
QF
IPP
EWG
Broker /marketer
Selfgeneration
ELECTRICITY SERVICE UNBUNDLING
In the vertically integrated utility environment, electricity services
were bundled
The unbundling of services entails
energy completely separated from transmission
basic transmission service provision to all eligible entities
engaged in wholesale markets
ancillary services as separate services
VERTICALLY INTEGRATED UTILITY STRUCTURE IS DISINTEGRATING
Transmission ownership
Customer
Service
Marketing/trading
ISO
Ancillary servicesPower exchange
System
OperationsGeneration
Distribution
wires
Generation
Transmission
CustomerService
Distribution
UNBUNDLING EXAMPLE
Baggage Service
Takeoffs
Landings
In-Air Pillow/Blanket Service
Oxygen
Bath rooms
Backup Service* Bundled service available upon customer request
FLY THE FRIENDLY SKIES WITH
UNBUNDLING ‘R’ US*}
ANCILLARY SERVICES : DEFINITION
System support services that are essential for physical
delivery of energy from a source point to a load point
Fundamental and indispensable system services required
for the provision of transmission service and in their
absence instantaneous system collapse would result
These services are provided mostly by generation sources
FERC ANCILLARY SERVICES
MustServiceOffer Take
Scheduling, control, & dispatch v vReactive & voltage support v vRegulation & frequency response vEnergy imbalance vSpinning reserves vSupplemental reserves v
NERC LIST OF INTERCONNECTED OPERATIONS SERVICES
Regulation Load following Energy imbalance Operating reserve -- spinning Operating reserve -- supplemental Backup supply System control Dynamic scheduling Reactive power / voltage control from generation sources Real power transmission losses Network stability services from generation sources System blackstart capability
OPEN ACCESS SAME-TIME INFORMATION SYSTEM (OASIS) RULE
Transmission customers must have access to same
information as the transmission provider at the same time
Information must be disseminated electronically using
real-time information networks and industry-wide
communications protocols
Display information on transmission services available,
tariffs, schedules and available transfer capability estimates
Establishment of Standards of Conduct to prevent
preferential access to transmission prices and availability
EQUAL INFORMATION AVAILABILITY
TransmissionProvider
TransmissionProvider
TransmissionCustomer
TransmissionCustomer
Transmission Service:
Palo Verde to Midway
200 MW at $4/MWhCall SCE
For Sale
Transmission Service:Four Corners to Midway200 MW at $3/MWhCall SMUD
WantedRINOASIS
For Sale Wanted
200 MW at $3/MWhFour Corners to Midway
Call SMUD200 MW at $4/MWhPalo Verde to Midway
Call SCE
Transmission Service:Transmission Service:
THE OASIS NETWORK
to anotherOASIS node
TC
TP
OASISnode
OASISnode TC
TC
TC
TC
TPTP
TP
InternetInternetTSIP
TC
Operational since January 3, 1997Network comprised of 23 nodes operated by 175 transmission providersOne of the first large-scale Internet applications for business to business
SCHEDULING COORDINATOR(SC)
Agent of transmission customers providing interface with the transmission system operator
May be a transmission customer, a generator, another utility, a marketer/broker or a bilateral contracts manager
Scope of responsibilities may include:contracting for supply-side and demand-side portfolios
to meet direct access customers’ requirementsscheduling supply to meet its customers’ load on a
monthly/daily/hourly basis and to respond to contingencies/curtailments
submission of balanced schedules to the operatorcontracting for adequate ancillary servicesparticipation in the settlement process
THE POWER EXCHANGE
Seller 1
PX
Seller M Seller i
Buyer N Buyer j Buyer 1
MWh MWh MWh
MWhMWhMWh
.$
.
. . .. . .
. . .
$$$
$ $
.
MARKET CLEARING PRICE
market clearing price
market clearing quantity
INDEPENDENT SYSTEM OPERATOR
... ...
load aggregator
end userESP
ISO
scheduling coordinator
...
power exchange
ancillary services market
D I S T R I B U T I O N (W I R E S)D I S T R I B U T I O N (W I R E S)
GG GG GG G GG GG GG G GGGGGGG
MOTIVATION FOR THE INDEPENDENT SYSTEM OPERATOR
The implementation of the open access regime makes the “transmission and...” business considerably more difficult, problematic and possibly of more limited strategic value
The increasing volumes of transactions in each region have made critically important the need to solve transmission problems on a regional basis
Transmission owning entities realize that independent decision making on transmission service and pricing issues necessitates the removal of control of the transmission system from the owners who also control other sectors of the electricity business
Facilitation of the commercial market by an independent entity that would remove impediments to access the grid and provide transmission service
PRINCIPAL ROLES OF THE ISO
Provision of non-discriminatory open access to the grid with
all users subject to the same access protocols and tariffs
Coordination of the day-ahead scheduling and real-time
load/resource balancing
Maintenance of system reliability/security
compliance with NERC - reliability council operating and
reliability standards
control/dispatch of the ISO’s transmission facilities
management of emergency response
PRINCIPAL ROLES OF THE ISO
Management of transmission network congestion and
constraints
Specification, competitive acquisition and management of
unbundled ancillary services
Settlement of accounts
Provision of information to market participants
Participation in system expansion
THE ANCILLARY SERVICES MARKET
... ...
load aggregatorend user
customer service
ISO
scheduling coordinator
...
power exchange
ancillary services market
D I S T R I B U T I O N (W I R E S)D I S T R I B U T I O N (W I R E S)
GG GG GG GG GG GG GG GG GGGGGGGG
ANCILLARY SERVICE CHARGES
All customers connected to the grid except those who
are self providers are deemed to be users of ancillary
services and are charged for those services by the ISO
The ISO allocates the costs it incurs in procuring
reserve capacity to all non-self-provider entities in an
amount proportional to their scheduled/metered loads
UNIT/PLANT SALE CHOICES
Capacity Allocation
reserved for real-timebalancing market
spinningreserve
hour-ahead market
day-ahead market
Energy Payments
balancing market energy( including AGC)
hour-ahead energy market
day-ahead energy market
AGC downward capability
METERING REQUIREMENTS
Unbundling brings about new measurement and
metering needs
A primary requirement is the quantification of each
service
Each service introduces its own specific needs in
measurement: nature, level of detail, frequency and
accuracy
Specialized communications may be required to transmit
measurement data to interested parties
Metering may be offered as an unbundled service
METERING DATA
Major challenges in effective data management:
collection
storage
extraction
compression
utilization
dealing with data overwhelm
data visualization
Key Issue: ownership of metering data
SETTLEMENT AND BILLING
Similar to metering, settlement and billing become an unbundled service
Data collection required forMWh injected by each generatorMWh withdrawn by each loadMVArh of reactive energy support by each generatorother ancillary service measurements -- capacity and
energytransmission network usage and contract informationtransmission congestion information
Settlement and billing entail the production of periodic bills for all providers and consumers of services
THE NEW TRANSMISSION BUSINESS
Customer choice
Vertical unbundling and horizontal consolidation
Increasing volume in inter-regional energy transfers
Proliferation in the number of transactions
“Instantaneous” changing of suppliers and buyers
Independent grid operators without generation
resources
Decentralized decision-making
NEW PARADIGMS FOR ELECTRICITY
Basic requirements
compatibility with the physics/engineering of electricity
customer choice
economic efficiency goals
market innovation
Prime mover is the introduction of free markets
Principal design issues
accommodation of economic decisions made by individual suppliers and users
attainment of economic efficiency goals through the appropriate level of centralization/decentralization
NEW PARADIGMS FOR ELECTRICITY
Key issues
maintenance of system security/reliability
availability of firm transmission rights
meeting coordination requirements in a competitive
environment
new structures
rules of the road
MARKET STRUCTURE
Central issue : role and level of authority of central
institutions vs. those of decentralized decision making
by individual market players
General agreement on the need for coordination of the
power system
The two emerging paradigms
Pool model
Bilateral model
THE POOL MODEL
The pool is the sole buyer and seller of electricity
The pool uses the offers of the suppliers and the bids
of the demanders to determine the set of successful
bidders whose offers and bids are accepted
The pool determines the “optimum” by solving a
centralized economic dispatch model taking into
account the network constraints
THE BILATERAL TRADING MODEL
Players arrange the purchase and sale transactions
among themselves
Each schedule coordinator (SC) and each power
exchange (PX) are responsible for ensuring
supply/demand balance
The independent system operator (ISO) has the role to
facilitate the undertaking of as many of the
contemplated transactions as possible subject to
ensuring that no system security and physical
constraints are violated
THE POOL PARADIGM
Centralized control with a single entity in charge of markets
and operations
“Pool” concept merges grid operator’s coordination role with
a centralized dispatch function
Grid operator as both air traffic controller and central
scheduler for a mega-airline in charge of coordinating the
number of flights, determining the prices for all landing rights
and the commodity prices for all airline seats
THE POOL MODEL
Independent System Operator (ISO)including power exchange and
ancillary services market
distribution wires businesses
retail merchants
marketers / brokers
generation entities
customer customer customer
multi-lateraltransaction
markets
THE BILATERAL TRADING PARADIGM
Coordination between one or more markets and an
independent grid operator
Independent grid operator in charge of system
reliability/security
Bulk energy market consisting of one or more “power
exchanges”
Basic requirement : effective coordination among all
players in a decentralized decision-making environment
Grid operator as air traffic controller in charge of take-offs,
landings, congestion but not of prices for airport landing
rights or seats on planes
THE BILATERAL TRADING MODEL
Independent System Operator (ISO)
distribution wires businesses
retail merchants
powerexchanges
ancillaryservicesmarkets
marketers / brokers
generation entities
customer customer customer
multi-lateraltransaction
markets
THE CALIFORNIA SYSTEM
... ...
load aggregator
end userESP
ISO
scheduling coordinator
...
power exchange
ancillary services market
D I S T R I B U T I O N (W I R E S)D I S T R I B U T I O N (W I R E S)
GG GG GG G GG GG GG G GGGGGGG
bilateral contracts
THE DISTINCT ELECTRICITY MARKETS
transmissioncongestion
managementmarket
PX
real-timebalancing
market
ancillaryservicesmarkets
short- termforwardenergy markets
ISOISO
THE ISO BALANCING MARKET
ISO administers a real-time market to ensure exact supply-
demand balance: purchases from generators energy not
supplied to the grid but demanded by the loads
The balancing market is strictly a physical delivery mechanism;
it provides load following and frequency control services
The balancing market compensates for
random unit outages
forecasting errors
shortfalls in PX and bilateral contract commitments
THE ISO BALANCING MARKET
The balancing market is the only truly physical electricity
market and is the basis for all other markets
While the ISO has the responsibility to track load, it may
not have direct control over the generators except under
emergency conditions; responsibility of each SC is to
bring its units to the desired level of operation
ISO charges out-of-balance SC’s for balancing energy;
payments for balancing energy by the ISO are based on
the prices and amounts specified by the units
THE PX MARKETS
The PX conducts two distinct marketsday-ahead markethour-ahead market
The PX markets are essentially short-term forward markets in which generators bid for the right to serve load and loads bid for the opportunity to have their demands satisfiedauction mechanism establishes the required
preschedulingschedules are financially binding on generators and
loadscommitments are virtually physical since widespread
violation of PX commitments may bring about disruption of system integrity
THE PX AUCTIONS
The day-ahead market is 24 separate double auctions,
one for each hour
These auctions operate without considering
transmission; all transmission constraints and
congestion management issues are ignored
[“unconstrained” PX]
Auctions are iterative with prescribed activity rules
designed to provide progressive price discovery
The PX sets a maximum price and buyers may submit
price-insensitive demand bids for noncurtailable loads
they must serve representing their willingness to pay up
to that price
ISO CONGESTION MANAGEMENT
The PX and other SC’s submit their proposed schedules to the ISO -- preferred schedules
SC’s submit adjustment bids--incs and decs--for their units specifying amount and price for changing a unit’s output -- up or down -- to mitigate congestion
If the preferred schedules lead to interzonal interface congestion, the ISO prepares an advisory redispatch with suggested modifications based on the adjustment bids and publishes a uniform interzonal congestion price or transmission usage charge for all SC’s and the PX
PX and SC’s may submit revised schedules to the ISOISO then determines final redispatch and usage charges
by either accepting the revised schedule submitted if there is no congestion or repeating the procedure in the advisory redispatch preparation
RESERVES
Reserves are unloaded capacity which is available within a prescribed amount of time
The reserves constitute an option to generateThe distinguishing characteristics of the three reserves
Type Availability Time Specification
spinning on-line within 10 minutes
non-spinning on- or off-line within 10 minutes
replacement on- or off-line within 1 hour
ISO’s RESERVES AUCTION
Each bidding unit provides
a capacity reservation price – $/MW
an energy strike price – $/MWh
The winning bidders are selected on the basis of the
capacity reservation price bid; all winning bidders
receive a uniform payment per MW
Energy supplied is paid according to the balancing
market price
THE RESERVES AUCTION
uniform price paid forreserve capacity
the winning bidders
MW
$/MW
the losing bidders
required reserves
RETAIL ENERGY COSTS 4/1/98 - 3/31/99
wholesaleenergy
21%
distribution30%
strandedcosts23%
ratereduc-
tionbonds13%ISO costs
5%
transmission4%
public purpose
5%
total costs = $ 28 billion CA ISO estimates
THE 4/23/98 REAL-TIME MARKET
ISO forecast
actual load
forward market load
G
Wh
0
5
10
15
20
25
30
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
THE ANCILLARY SERVICES AUCTIONSen
erg
ysc
hed
ul e
s
AG
C
spin
nin
gr e
ser v
es
no
n-s
pin
nin
gre
serv
es
rep
lace
men
tre
serv
es
the sequence of ancillary services auctions
REAL TIME MARKET ENERGY SOURCES
81%
4%
3%
CA ISO estimates
replacement reserves
spinning reserves
non spinning reserves
supplemental energy
12%
CALIFORNIA PX AND ISO PRICE CAPS
Entity Service Cap$2,500/MWh – uncon-strained conditionsPX1 forward energy
market $250/MWh – congestedconditions
ISO real-timeenergy market
$250/MWh
ISO congestionmanagement
$250/MWh
ISO ancillaryservice market
$250/MW per hour
1 The price floor is 0 but under certain conditions negative prices are allowed at specific scheduling points
THE TRANSMISSION NETWORK UNDER OPEN ACCESS
Transmission systems are being used in a manner and asked to do tasks not contemplated when they were planned and designedgreater volume and variety of transactions involving
transmissionhigher frequency of hitting transmission constraintsincreasing tendency to reserve firm transmission
serviceOpen access impacts include
heavier loading of transmission linesincreased loop flowswider variability of transmission pricing as a result of
increased use of constrained interfacesneed for more detailed transmission planning studies
arising from constrained interfaces
THE TRANSMISSION NETWORK UNDER OPEN ACCESS
Multi-system transactions require increased
communications and expanded system oversight
Generation is being added, but not always at the most
appropriate location from the transmission point of
view
Management of transmission resources has become
very challenging: coordination, allocation, specification
of the rules of the road
OPEN ACCESS AND TECHNICAL CONSIDERATIONS
The physical characteristics of the electric transmission
system -- the lines, transformers and substations -- remain
unchanged under open access
Transmission lines and transformers must be protected
against high currents which would cause damage; this need
becomes particularly critical during system disturbances
The system must be protected against violations of its
electrical limits and operational limits
SYSTEM SECURITY REQUIREMENTS
Under open access, the system security monitoring,
analysis and control function remains unchanged but may
be placed in hands different than those in the vertically
integrated utility
The protection of the system from overstress due to the
proliferation of transactions, the large number of players
and the new rules of the road, remains a basic requirement
for reliable electricity
POWER SYSTEM SECURITY
Power system security refers to the ability of the system to
withstand contingencies
Security is an instantaneous condition and is a function of
time and system robustness with respect to all imminent
disturbances; in general, the power system is continually
subject to disturbances encompassing a wide range of
conditions
Security of power system operations is the analogue of
reliability in power system planning
POWER SYSTEM SECURITY
Security is defined with respect to a set of credible next contingencies; security analysis requires that a set of contingencies be specified.
An operating state is secure if under each of the postulated contingencies the system continues to maintain secure normal operations
An operating state is insecure if a specified contingency transitions the state into emergency.
Security assessment analyzes the vulnerability of the system to a set of postulated contingencies on a real - or near-real-time - basis.
Aim of security control is to prevent the system state from transitioning from secure operation into emergency
CLASSIFICATION OF STATES
STATES
NORMAL
EMERGENCY
RESTORATIVE
VIOLATED CONSTRAINTS
SYSTEM LOADS SYSTEM CONSTRAINTS
some of the loads are not met (partial to total blackout)
none
none
some operating limits on line overloads, underfrequency and/or overvoltages
partial system is in normal state
none
CONTROL ACTIONS
Principal task of operations is to ensure that the generation
tracks the load around the clock
A broad range of control actions is deployed to ensure that
this supply-demand balance is met reliably and cost
effectively
The response times of the control actions to the onset of a
disturbance provide a basis for their classification
REAL-TIME CONTROL ACTION TIME SCALE
FACTS
AGC
response time after the onset of an event
in seconds
1 cycle
exciters and PSS
underfrequency load shedding
governor control
ULTC voltage control
operator - initiated/ manual control
market price update
1 100 1000 10-2 10-1 10
protective system
1 cycle
SYSTEM VOLATILITY
The multiplicity of the players results in the proliferation
of transactions of typically shorter duration and larger
variety
This leads to increased volatility in the system
characterized by:
more frequent changes in system conditions and flows
more volatile pattern of generator commitment
unpredictable and more frequently varying
structure/configuration
greater variability in controllers
marked price variability
KEY IMPACT: PRICE-DRIVEN FEEDBACK LOOPS
New dynamic phenomenon: response of generators and
loads to market signals that are impacted by grid conditions
which, in turn, are influenced by the generator and load
response
This price-driven feedback path must be explicitly modeled
for analysis and control design
CONTROL UNDER UNBUNDLING
Under restructuring the providers of the control actions and the controling authority are separately owned
There is a need to specify procedures -- rules of the road -- for the acquisition and deployment of control services
Key challenges:integrated control of unbundled generation and
transmissioninformation availability due to competitive market
considerations maintenance of system security without unduly affecting
the marketmeasurement and meteringcontrol performance assessment
ADDITIONAL CHALLENGES AND OPPORTUNITIES UNDER UNBUNDLING
Determination of static and dynamic limits
Protection system reliability
The changing nature of EMS
Advances in measurement instrumentation and
communications technology
Hybrid controls
THE DATA OVERWHELM PROBLEM
Vast amounts of data are required for monitoring and control in large-scale power systems under open access
The data problem is exacerbated in the restructured industry by:
the marked increase in the total number of players
the increasing role of markets
the proliferation in the number of transactions
the impacts of increased volatility in the system
the greater region covered by an IGO
the challenges brought about by advances in computing and communications
KEY ISSUE: DATA AVAILABILITY AND MANAGEMENT
Two principal aspects:
data acquisition: the availability of all data required for
monitoring and control
data overwhelm problem: the effective management of
the increasing volumes of data
Availability of data is critical due to the potential for
conflicts between physical data and market data
Effective schemes for data storage, extraction,
compression, and display are daunting challenges
REEXAMINATION OF CONTROL LAWS
The need to ensure the security of the power system under
new paradigms established in the restructured
environment will continue to require improved controls
The reexamination of control laws needs to take advantage
of the opportunities from incorporating new advances in
electrotechnology -- substation automation, FACTS
devices and dispersed resources
control theory, particularly in the area of robust control
communications technology for the deployment of
faster controls
WAMS
The use of the global positioning system (GPS) enables the
measurement of the relative phase angles of geographically
dispersed sinusoidal voltages in the grid
The wide area measurement system or WAMS makes
extensive use of the GPS in various phase measurement units
which are interconnected by data concentrators
WAMS provides the capability to time stamp measurements
and communicate the data over large distances with
acceptable latency
WAMS implementation to cover a wide region such as the
Western Interconnection in the US is underway
IMPACTS OF ADVANCES IN COMMUNICATIONS
Special protection schemes such as remedial action
schemes integrate very fast acting controls with
protective relays and operate on the same time
scale as the protection system
The deployment of such schemes will allow WAMS
to make possible the effective implementation of
faster controls for security enhancement
ENHANCEMENT OF ANALYTICAL AND SOFTWARE TOOLS
Data visualization
Analytical tools for information management, state
estimation, voltage security analysis and available
transfer capability
Software engineering
Model development and validation
Training simulators
SUMMARY
Identification of the critical research needs to meet the vast
scope of challenges in control to ensure reliable and cost
effective electricity in the future
The effective integration of technology advances in the
areas of computers, communications, control and power
electronics advances is a major challenge
The coming to grips with the data overwhelm issues , the
formulation of new control laws and the development of
new enhanced analytical tools/software in the areas of
automatic controls, security monitoring and security
enhancement are key elements of the research agenda
