3 reactive services

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PJM 2005

Reactive Service Working GroupMay 20, 2005

Reactive Service Compensation


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2005 PJMwww.pjm.com 2

Reactive Power Background

Reactive power component of electric power supports system voltages thatmust be managed for system reliability.

System voltages must be controlled at all key points of the power networkwithin acceptable limits. This control is accomplished by the supply or by the

consumption of reactive power at these points.

Large amount of the reactive power that is produced is consumed by powergrid infrastructure to support the transmission of power over long distances.

The transmission of reactive power over long distances is not efficientbecause reactive power losses in transmission lines and transformersincrease dramatically as demand and power flows increase.

The high transportation loss characteristic and the fact that voltage magnitude

tolerances are narrow at all points on the power grid essentially require thatreactive power supply be more distributed across the network.


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Types of Reactive Power Supply

Static Reactive Power Produced by equipment that cannot quickly change reactive power output level

Reactive power output level drops when system voltage level drops

Provided by bulk system capacitors and distribution system capacitors Under normal operating conditions, most reactive requirements should be

supplied by capacitors located on transmission and distribution system.

Dynamic Reactive Power

Produced by equipment that can quickly change reactive power output level Reactive power output level can increase when system voltage level drops

Provided by generators, static var compensators and synchronous condensers

Under normal operating conditions, dynamic reactive power supplies shouldoperate with substantial reactive power reserves in order to quickly providereactive power to the system during power system disturbances.


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Reactive Power Demand

Includes customer load requirements and reactive losses that occur ontransmission system and distribution system components as power istransmitted from generator to load.

Distribution System Reactive power does not travel far therefore reactive supply must be

located near the location of the reactive demand (via distribution systemcapacitors)

designed/operated to minimize reactive support from transmissionsystem Transmission System

High voltage lines produce reactive power at low power transfer levelsand consume reactive power at high power transfer levels.

Bulk power system static capacitors needed at key locations to providevoltage support for power transfers.

For contingency events, power flows instantly increase on remaining linesrapidly increasing reactive power consumption

Dynamic reactive support and voltage control needed to maintain propervoltage profile during system disturbances.


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Principles for Reactive Power Compensation (cont.)

Standards for key interconnection points (generator to transmissionand transmission to distribution).

Capacity type compensation structure coupled with variable

component dependent on performance compliance. Reactive capability of all generators provides some reliability benefit

(marginal value today could be critically important in future)

Efficient load power factor to minimize transmission system supportof the distribution system

Common set of load power factor standards across the PJM market.

Appropriate performance compliance measurements andperformance incentives for meeting load power factor standards


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Recommendations

Develop common standard, method for measuring compliancewith the standard and incentive for meeting or exceeding thestandard for :

generator reactive capability and voltage control load power factor efficiency

Ensure consistent compensation for similar reactive supply types

Be cautious with moving forward with a needs test


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Generator Reactive Standards/Compensation

Standards reactive capability requirement of .9 lag to .95 lead

must operate with AVR in service at all times

Compensation generator compensation should be commensurate with actual

reactive capability

reactive allocation factor of (1 - PF2

) should be adjusted by actualpower factor to prorate original FERC approved costs. actual power factor obtained from periodic reactive capability tests

generator AVR status should become a required SCADA point

regularly monitor generator response to operator requests forreactive and automatic response to contingency events


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Generator Reactive Standards/Compensation (cont.)

Compensation (cont) incorporate AVR availability rate and actual operational response

into compensation structure

repeated unsatisfactory performance should disqualify generatorfrom reactive compensation

Other Issues

Fixed $/MVAR-year rate for capability versus FERC-approved rate Should existing contracts continue or fall into new rate structure?

How to apply power factor adjustments to black-box settled units


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Load Power Factor Standards

Reactive power consumption is an equally important component ofmaintaining an adequate voltage profile not just a supply matter

Standards

develop a standard power factor requirement for the interconnection point

between transmission and distribution systems develop method of measuring compliance with the standard

Compensation

Compliance measure could be used to adjust reactive service payments

generator compensation should be commensurate with actual reactivecapability

Enforcement of standards can start with PJM holding zonal customers to

standard Sub-zonal customers held accountable through interconnection agreements

with EDC


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Needs Test?

PJM recommends caution in this area since the reactivecapability of all generators provide some reliability benefit

Reactive sources are long-lived assets and system reactive

needs change over time reactive supply of marginal value today may be of critical

importance in the future

A granular needs test designed to avoid compensating forreactive supply that is redundant must try to anticipate a dauntingarray of possible system states each of which may result in a

different conclusion


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Consistent Compensation for Similar Supply Types

Schedule 2 provides compensation for generators

Not clear if synchronous generators and newer technologies likeSVC are covered in Schedule 2

Explore one single and consistent compensation approach for all

types or at least similar types of reactive power sources

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