ENGR 340Fall 2011

Iowa State University

Electric Power Industry Overview

James D. McCalleyHarpole Professor of

Electrical & Computer Engineering

Outline1. The electric power industry2. Control centers3. Electricity markets

2

Organizations comprising the Electric Power IndustryOrganizations comprising the Electric Power Industry• Investor-owned utilities: 239 (MEC, Alliant, Xcel, Exelon, …)• Federally-owned: 10 (TVA, BPA, WAPA, SEPA, APA, SWPA…)• Public-owned: 2009 (Ames, Cedar Falls, Muscatine, …)• Consumer-owned: 912 (Dairyland, CIPCO, Corn Belt, …)• Non-utility power producers: 1934 (Alcoa, DuPont,…)• Power marketers: 400 (e.g., Cinergy, Mirant, Illinova, Shell Energy, PECO-

Power Team, Williams Energy,…)• Coordination organizations: 9 (ISO-NE, NYISO, PJM, MISO, SPP, ERCOT,

CAISO, AESO, NBSO), 7 are in the US.• Oversight organizations:

• Regulatory: 52 state, 1 Fed (FERC)• Reliability: 1 National (NERC), 8 regional entities• Environment: 52 state (DNR), 1 Fed (EPA)

• Manufacturers: GE, ABB, Toshiba, Schweitzer, Westinghouse,…• Consultants: Black&Veatch, Burns&McDonnell, HD Electric,…• Vendors: Siemens, Areva, OSI,…• Govt agencies: DOE, National Labs,…• Professional organizations: IEEE PES …• Advocacy organizations: AEWA, IWEA, Wind on Wires…• Trade Associations: EEI, EPSA, NAESCO, NRECA, APPA, PMA,…• Law-making bodies: 52 state legislatures, US Congress

3

4

Apr 1990: UK Pool

opens

Jan. 1991: Norway launches Nordpool

Jan. 1996: Sweden in Nordpool

Oct 1996: New

Zealand NZEM

Jan 1998: PJM ISO created

Mar 1998: Cal ISO opens

Jan. 1998: Finland in Nordpool

Dec 1998: Australia

NEM opens

Nov 1999: NY ISO launches

May 1999: ISO-NE opens

Jan. 2000: Denmark in

Nordpool

Mar 2001: NETA

replaces UK Pool

July 2001: ERCOT becomes

one control

area May 2002:

Ontario IMO

launches

North America

1990 1992 2000 1998 1996 1994

Jan. 2001: Alberta Pool opens

Overseas

2002 2004 2006

Dec 2001 MISO becomes first RTO

Feb 1996 MISO formed.

April 2005 MISO Markets Launch

1996: ERCOT becomes ISO.

Jan 2002 ERCOT opens retail zonal mrket

2008 Feb 2007 SPP Markets Launch

Dec 2008 ERCOT Nodal Market

Launched

Big changes between 1992 and 2002….Big changes between 1992 and 2002….

1900-1996/2000

G G

G

G

G

G

G

G

TransmissionOperator

IndependentSystem

Operator

TransmissionOperator

TransmissionOperator

Today

G G G

G

G

G

G G

Transmission and System Operator

Vertically Integrated Utility

IndependentSystem

Operator

5

What are the North American Interconnections?What are the North American Interconnections?

“Synchronized”

6

What is NERC?What is NERC?• NERC: The North American Reliability Corporation, certified by federal government

(FERC) as the “electric reliability organization” for the United States.• Overriding responsibility is to maintain North American bulk transmission/generation

reliability. Specific functions include maintaining standards, monitoring compliance and enforcing penalties, performing reliability assessments, performing event analysis, facilitating real-time situational awareness, ensuring infrastructure security, trains/certifies system operators.

• There are eight NERC regional councils (see below map) who share NERC’s mission for their respective geographies within North America through formally delegated enforcement authority

• Western Electricity Coordinating Council (WECC)

• Midwest Reliability Organization (MRO)• Southwest Power Pool (SPP)• Texas Reliability Entity (TRE)• Reliability First Corporation (RFC)• Southeast Electric Reliability Council

(SERC)• Florida Reliability Coordinating Council

(FRCC)• Northeast Power Coordinating Council

(NPCC)

7

What is FERC?What is FERC?• An independent agency that regulates the interstate transmission of electricity,

natural gas, and oil. It does the following:• Regulates transmission & wholesale sales of electricity in interstate commerce;• Reviews mergers/acquisitions /corporate transactions by electricity companies; • Reviews the siting application for electric transmission projects under limited

circumstances; • Licenses and inspects private, municipal, and state hydroelectric projects;• Protects the reliability of the high voltage interstate transmission system through

mandatory reliability standards; • Monitors and investigates energy markets; • Enforces FERC regulatory requirements through imposition of civil penalties and

other means;• Oversees environmental matters related to natural gas and hydroelectricity

projects and other matters; • Administers accounting and financial reporting regulations and conduct of

regulated companies.”• FERC does not:

• Regulate retail electricity and natural gas sales to consumers;• Regulate activities of municipals or federal power marketing agencies;• Regulate nuclear power plants (NRC does this);• Address reliability problems related to failures of local distribution facilities; • Consider tree trimmings near local distribution power lines in residential

neighborhoods8

What are ISOs?What are ISOs?• The regional system operator: monitors and controls grid in real-time• The regional market operator: monitors and controls the electricity markets• The regional planner: coordinates the 5 and 10 year planning efforts• Also the Regional Transmission Organization (RTO)• They do not own any electric power equipment! • None of them existed before 1996!

• California ISO (CAISO)

• Midwest ISO (MISO)

• Southwest Power Pool (SPP)

• Electric Reliability Council of Texas (ERCOT)

• New York ISO (NYISO)

• ISO-New England (ISO-NE)

• Pennsylvania-Jersey-Maryland (PJM)

9

Energy Control CentersEnergy Control Center (ECC):

• SCADA, EMS, operational personnel• “Heart” (eyes & hands, brains) of the power system

Supervisory control & data acquisition (SCADA):• Supervisory control: remote control of field devices, including gen• Data acquisition: monitoring of field conditions• SCADA components:

» Master Station: System “Nerve Center” located in ECC» Remote terminal units: Gathers data at substations; sends to Master

Station» Communications: Links Master Station with Field Devices, telemetry is

done by either leased wire, PLC, microwave, or fiber optics.

Energy management system (EMS)• Topology processor & network configurator• State estimator and power flow model development• Automatic generation control (AGC), Optimal power flow (OPF)• Security assessment and alarm processing

10

SubstationRemote terminal unit

SCADA Master Station

Com

mun

icati

on li

nk

Energy control center with EMS

EMS alarm displayEMS 1-line diagram 11

ECCs: EMS & SCADA

Today’s real-time market functions

SCADA

Overloads & Voltage Problems

Potential Overloads &

Voltage Problems

Breaker/Switch Status Indications

System Model Description

Telemetry & Communications equipment

State Estimator

Network Topology program

AGC

Economic Dispatch

OPF

Contingency Selection

Contingency Analysis Security Constrained OPF

Display Alarms

Updated System Electrical Model

Analog Measurements

Display to Operator

Power flows, Voltages etc.,

Display to Operator

Bad Measurement Alarms

Generator Outputs Generation Raise/Lower Signals

State Estimator Output

Substation RTUs and

power plants

EMS

12

ECCs: EMS & SCADA

More energy control centers

13

More energy control centers

14

15

Balancing authorities

Performs AGC within designated area.105 BAs in N. Am.: 67 in EI, 38 in WI, 1 in Texas.Every ISO is a BA. Not every BA is an ISO.

16

Basics of electricity markets

1. Locational marginal prices (LMPs)2. Markets compute the LMPs via an internet-

based double auction that maximizes participant benefits

3. There are 2 separate settlement processes.

17

Locational marginal prices

1. One for each bus in the network.2. Three components – see above.3. If the network is lossless, and the

transmission capacity is infinite, then all buses have the same LMP.

18

MISO and PJM balancing areas

19

RT LMPs in the MISO and PJM balancing areas

7:20 am (CST) 9/8/2011

20

RT LMPs in the MISO and PJM balancing areas

7:40 am (CST) 9/8/2011

21

Average annual locational marginal prices

22

Market clearing price

Computed as the price where the supply schedule intersects the demand schedule.

SUPPLY

DEMAND

Price ($/MWhr)

Quantity (MWhr)

23

Market clearing price

Computed as the price where the supply curve intersects the demand curve.

Price ($/MWhr)

Quantity (MWhr)

SUPPLY

DEMAND

24

Locational marginal prices

25

CAISO market design

Schedules entire “next-day” 24hr period.

Schedules interchange for entire “next-day” 24hr period, starting at current hour, optimizing one hour at a time (1 value per hr)

Computes dispatch every 5 minutes.

26

Electricity “two settlement” markets

Day-Ahead Market(every day)

Real-Time Market(every 5 minutes)

Energy & reserve offers from gens

Energy bids from loads

Internet system

Which gens get committed, at roughly what levels for next 24 hours, and settlement

Internet system

Energy offers from gens

Energy bids from loads

Generation levels for next 5 minutes and settlement for deviations from day-ahead market

Generates 100 mw; paid $100.

Generates 99 mw; pays $1.

27

Day-ahead LMPs in ISO-NE balancing areas

For hour ending 11:00 am (EST) 9/8/2011

28

RT LMPs in the ISO-NE balancing areas

10:25 am (EST) 9/8/2011

29

RTAncillary service prices in ISO-NE bal areas

10:25 am (EST) 9/8/2011

Regulation clearing price is $5.11/MW.

Load Zones: Connecticut (CT), Southwest CT (SWCT), Northeast Massachusetts/Boston (NEMABSTN)

TMSR=10min spinning rsrvTMNSR=10min non-spinning rsrvTMOR=30min operating rsrv

30

How does wind participate in markets?

“Old” approach #1•Participates in day-ahead energy•Does not participate in AS or RT•Wind generates what it can•No deviation penalties•Paid based on computed LMP without wind, Point X below•Marginal unit backed off to compensate

Demand schedule without wind

Demand schedule with wind

Supply schedule

Quantity (MWhr)

Price ($/MWhr)

Point X

Point Y

“Old” approach #2•Participates in day-ahead energy•Does not participate in AS or RT•Wind generates what it can•No deviation penalties•Paid based on computed LMP with wind, Point Y below•Marginal unit backed off to compensate

31

How does wind participate in markets?

“New” Midwest ISO approach: Dispatchable intermittent resource (DIRs)

• Participates in day-ahead energy• Makes offer into RT market like any other

generator. But one unique DIR feature:• Instead of capacity max offered in by other generation

resources, the forecasted wind MW is used as the operation capacity maximum

• Units missing “schedule band” of 8% on either side dispatch instruction for four consecutive 5-min periods are penalized.

•What are implications?

32

How does wind participate in markets?

What are implications? Wind is dispatchable! Forecasting is key!•DIRs are expected to provide rolling forecast of 12 five-minute periods for the Forecast Maximum Limit.•If forecast not submitted in time, MISO forecast is used.•Each 5 minute dispatch optimization uses Forecast Maximum Limit based on the following order

1. Participant submitted Forecast for the interval•Must be less than or equal to the Feasibility Limit•Must have been submitted less than 30 minutes ago

2.MISO Forecast•Must be less than or equal to the Feasibility Limit•Must have been created less than 30 minutes ago

3.State Estimator

33

How does wind participate in markets?

34

Midwest ISO’s wind forecasting accuracy?

35

Why is DIR beneficial?1. DIRs are more likely to reduce output when LMP is

negative because dispatch will instruct them to reduce; there are penalties for not following dispatch.

2. Inclusion of the DIRs in the RT dispatch will give SCED more flexibility to manage constraints. Therefore, there will be fewer manual curtailments:

• Benefits wind for increased MWhrs produced• Benefits to system because wind offers low

36

Why is DIR beneficial?

37

Very fresh information!From: Amanda Brower [mailto:ABrower@midwestiso.org] Sent: Tuesday, September 13, 2011 2:30 PMTo: adv_committee@lists.midwestiso.org; marketsc@lists.midwestiso.org; rscommittee@lists.midwestiso.org; planningac@lists.midwestiso.orgSubject: [MISO] DIR Workshop II - Date Changed to October 17

Dear Stakeholders,The date of the Dispatchable Intermittent Resource (DIR) Workshop has changed to October 17, 2011, from 11:00 am to 5:00 pm ET. This workshop will be available from MISO Carmel or St. Paul facilities as well as by dial-in/webcast and recorded.

The purpose of this workshop is to expand on the information from the first workshop and give experiences since DIRs were implemented on June 1, 2011. Subject matter experts will be on hand to discuss different aspects of participation by DIRs, including communications, forecasting, operations, markets, and settlements. We encourage participants involved in DIR registration and operation to attend this workshop.

Registration is required by October 13 and may be accessed from the MISO website (www.misoenergy.org) directly via the URL below or from the Stakeholder Center tab by selecting: Committees, Work Groups, and Task Forces > Calendar > October 17 > Dispatchable Intermittent Resource (DIR) Workshop II

https://www.misoenergy.org/Events/Pages/DIR20111017.aspx