During the summer, grid congestion can be a significant issue, as system operators focus on moving power from areas of greater supply to those of greater demand – those situations can occur for numerous reasons, including transmission or generator outages, according to FERC staff’s Summer 2017 Energy Market and Reliability Assessment, which staff presented on June 15.
Staff analyzed 2016 prices to identify nodes, or specific grid locations, that experienced higher congestion pricing during last summer than during the other three seasons of the year, the report said. To identify specific locations of interest, staff analyzed nodal price extremes and volatility, relative to the broader RTO/ISO market – those high congestion prices indicate where it is relatively more difficult to deliver power or where additional generation is particularly valuable for relieving congestion, the report said.
Last summer, that occurred in various locations, including Maryland and northern Illinois in PJM Interconnection, central and Southern California in the California ISO (Cal-ISO), and near the seams between RTOs, the report said.
Since last summer, more than $5bn of transmission upgrades entered operation in the six RTO/ISO markets, the report said, noting that those investments may help relieve grid congestion and could reduce some of the high price volatility this summer.
The Summer 2017 Energy Market and Reliability Assessment noted that NERC anticipates that power resources will be able to meet the reference margin levels in most assessment areas this summer.
The anticipated reserve margin in ISO New England (ISO-NE), for instance, is projected to be at 14.88%, which is slightly below its reference margin level of 15.1%, the report said, adding that snowpack in the West, measured by snow water equivalents, reached levels well above average.
The snow water equivalent in the West, particularly in California, had been tracking near the record-high levels that were set in 1982-1983, the report said. However, the statewide levels have started to shift downwards since February and are now at about 65% of the April 1 average, the report said. Given the abundance of accumulated snow water, high hydro generation is likely to continue into the early part of the summer, which could be leveraged to reduce natural gas constraints in Southern California, the report said.
FERC and other agencies continue to monitor the situation at the Aliso Canyon natural gas storage facility, the report said, noting that this year marks the second summer that Aliso Canyon will be restricted. While the restrictions on Aliso Canyon did not pose any major issues during the 2016 summer, the limited availability of the Aliso Canyon natural gas storage facility in Southern California may pose a risk to gas and electric reliability this summer if hotter than normal weather conditions and unplanned gas pipeline outages materialize, the report said.
This resource had been used to help maintain natural gas pipeline pressures, which are necessary for supporting gas-fired generation during swings in power plant demand, the report said. Currently, Aliso Canyon has less working gas than last summer because of withdrawals this past January, as well as current physical and regulatory limitations may affect the amount of stored gas that could be used this summer, the report said.
In addition, the report noted that California has imposed new restrictions on all natural gas storage facilities, requiring facilities to inject and withdraw only through the well pipe, not through the casings, as has been done in the past, and those limitations will reduce the rate at which injections and withdrawals can occur.
The report further stated that data from NERC’s Summer Assessment indicates that the total U.S. load forecast, when weather-adjusted, will be about 1.1% higher than it was last summer. Meanwhile, the total generating capacity in the United States has increased by about 1% since last summer and more than 20 GW of new generating capacity is expected to be installed nationwide through the summer, the report noted.
Most of the capacity additions will come from renewable resources such as wind and solar, according to the report, which also noted that about 10 GW of generating capacity has retired since May 2016, including about 4 GW of coal-fired capacity and 6 GW of natural gas-fired capacity.
NERC’s Summer Assessment data indicates that planning reserve margins for most assessment areas are anticipated to be adequate this summer, the report said. While the anticipated reserve margin in the Electric Reliability Council of Texas (ERCOT), for instance, continues to be tight when compared to the other regions, ERCOT expects to have sufficient generating capacity to serve peak demand during this upcoming summer season. However, the report added, the Lower Rio Grande Valley, Laredo, and West Texas are a few areas in ERCOT that risk experiencing localized reliability issues due to strong load growth, transmission constraints, and limited generation resources.
The report also noted that if forecast peak summer conditions in ISO-NE occur, then tighter supply margins could develop, as about 700 MW of new resources have been delayed and may not be placed into commission this season as expected. ISO-NE may be required to rely on additional imports from neighboring regions as well as implementing operating procedures to maintain reliability during possible periods of supply deficiencies, the report said.
The report also noted that NERC anticipates that the total installed nameplate wind capacity this summer will be 82 GW, about 8% higher than last year, and it anticipates that about 6 GW of new utility-scale solar capacity will come on-line this summer.
The “Blue Cut Fire” event last August illustrates why grid operators must work to integrate and minimize risks posed by new technologies, such as increased penetration of solar units with inverters, the report said. As a result of the fire, multiple transmission line faults occurred across Southern California Edison’s bulk electric system and resulted in a simultaneous disconnect of about 1,200 MW of inverter-connected generation, the report said.
In response to that event, NERC, in collaboration with inverter equipment manufacturers and other interested parties, formed a group to investigate the event and to develop solutions to avoid similar future occurrences, the report said.
That group concluded in a June NERC report that the loss of inverter power injection was primarily due to a perceived low-frequency condition and low-voltage blocking of the inverters. Through that effort, the report added, NERC also recommended long-term actions to allow the solar photovoltaic generation fleet to ride-through similar future events and in the near term, will issue a NERC alert to raise awareness prior to the summer season to minimize the potential for abrupt disconnection of inverter-connected generation.
Among other things, the report noted that June 1 marked the start of PJM’s second year transitioning toward the full implementation of its Capacity Performance program – those rules set performance requirements on capacity resources during system emergencies and impose substantial penalties for non-performance. The stronger incentives were needed to encourage investment for better generation performance, the report noted.
The report also said that demand response is an important resource that is used to maintain reliability during periods of market stress, such as peak summer days or during system emergencies. Demand response in PJM, for instance, has increased by 2,256 MW, 28%, from last year, and now represents 6.3% of the RTO’s total capacity, the report said.