Reliability and Economics are Inseparable: Insights of Managing Wind in SPP

RMEL Spring Management, Engineering and Operations Conference

May 20-22, 2018

David Kelley, PE

Director, Seams and Market Design

Southwest Power Pool, Inc.

Helping our members work together to keep the lights on … today and in the future.

Our Mission

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SPP Snapshot

• FERC-approved RTO

• 14 states

• 546,000 miles of service territory

• 17.5 million end users

• 96 members

• $15.8 billion market

• 185 market participants

• 50,622 MW peak load

• 726 generating plants

• Accredited generating capacity of 65,410 MW

Our Regional Footprint

North American ISOs & RTOs

The SPP Difference

• Relationship-based

• Member-driven

• Independence Through Diversity

• Evolutionary vs. Revolutionary

• Reliability and Economics Inseparable

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THE VALUE OF SPP• Transmission planning, market

administration, reliability coordination, and other services provide net benefits to SPP’s members in excess of more than $1.7 billion annually at a benefit-to-cost ratio of 11-to-1.

• A typical residential customer using 1,000 kWh saves $5.71/month because of the services SPP provides.

Generating Capacity* by Fuel Type(87,086 MW total)

6* Figures refer to nameplate capacity as of 1/1/18

177 windfarms (9,112 turbines) connected to SPP’s system• Installed nameplate wind capacity

17,530 MW• Largest is 400 MW (Grand Prairie in

Nebraska, Holt County)

2017 Energy Productionby Fuel Type (259,554 GWh total)

19.5%

46.3%

4.2%

22.7%

6.8% 0.6% 0.2%

Gas (19.5%)

Coal (46.3%)

Hydro (4.1%)

Wind (22.7%)

Nuclear (6.8%)

Other (0.3%)

Solar (0.2%)

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Most days, wind in SPP looks like this…

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However some days…

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Min and Max Percent of Generation Mix Per Fuel Type - Last 12 Months

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67.0

60.9

44.8

10.0 8.2

20.1

0.55.1 3.0 1.1

44.8

24.019.6

6.74.2

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

Coal Wind Gas Nuclear Hydro

Per

cen

t

Fuel Type

- Average

SPP Breaking North American Records!• 4/24/2017 54.47% wind serving load

• 3/16/2018 60.56% wind serving load

• 3/31/2018 62.13% wind serving load

• 4/30/2018 63.96% wind serving load (current record)

• Maximum wind output record of 15,690 MW on December 15, 2017

• All records made reliably, while optimizing economics, with all NERC RC/BA requirements met

• While these records are instantaneous, high wind penetration levels around 60% have been sustained for hours at a time

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Annual Average Wind Speeds

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100 Meter Hubs, Game Changer!

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80m Hubs

100m HubsSource: IEEE Power PESl

• 17.7 GW wind installed• 7 GW signed IA’s• 37 GW under study• 61.7 MW Total

Wind Capacity Installed by Year

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80 438 341 80 626 207 266 644 1176 837 5612171

01146

38273328 1559

31880 518 859 939 1565 1772 20382682 3858 4695

52567427

7427

857312400

1572817287

1760517750

20326

25391

30456

18958

22300

30650

39010

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2020 2025 2030

Yearly Installed Capacity Total Installed CapacityForecasted Capacity 1013 MW Yearly Average Forecasted Capacity 1671 MW Yearly AverageForecasted End of the Installed Capacity

Pending Generator Interconnection Requests

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MW Requested by Generation Type

February 26, 2018

Wind, 53,056

Solar, 16,571

Natural Gas, 2,071Steam Turbine, 29 Storage, 841

Wind by SPP Control Zone

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Date Recorded Control ZoneWind

DispatchActual Load Wind Penetration

4/30/2017 SECI 1,582.1 352.7 448.6%2/16/2018 OKGE 4,771.6 2,731.6 174.7%3/5/2017 WR 2,483.5 2,436.8 101.9%

10/21/2017 MPS 429.8 495.6 86.7%4/24/2016 WFEC 677.2 786.4 86.1%5/7/2017 WAUE 1,683.0 2,271.0 74.1%5/3/2015 EDE 243.7 340.6 71.6%

2/22/2017 SPS 1,509.8 2,127.3 71.0%5/6/2016 NPPD 723.3 1,131.7 63.9%

5/22/2016 KCPL 538.4 1,199.3 44.9%4/12/2015 OPPD 286.2 880.7 32.5%3/1/2018 CSWS 997.5 3,533.6 28.2%

9/23/2014 INDN 16.1 66.8 24.1%2/28/2016 KACY 27.4 187.7 14.6%

10/18/2015 GRDA 47.4 408.2 11.6%

Wind Penetration: YTD 2018

Max Penetration

Min Penetration

Wind Penetration

63.96% of load 1.5% of load

Time 4/30 @ 03:35 2/22 @ 10:58

SPP Load 21,332 MW 33,969 MW

Wind Output 13,644 MW 500 MW

Appx Gen Mix

Coal 23% 48%

Wind 59% 2%

Nat. Gas 9% 39%

Nuclear 3% 6%

Hydro 5% 5%

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Reliability Coordination (RC) Experience• SPP and its members have worked

together to ensure electric reliability for over 75 years

• Over 20 years of providing RC services demonstrates SPP’s ability to maintain system reliability and coordinate with neighboring RCs to ensure reliability of the bulk electric system (BES)

• SPP has 10 years experience co-optimizing RC and Market Operations (MO) functions

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Operations Preparations For Wind

• SPP Operations personnel begin analyzing high wind Operating Days at least four days in advance, up to seven

• All starts with Multi-Day Reliability Assessment (MDRA) and subsequent Reliability Unit Commitment (RUC) studies Analyzes capacity needs, while maintaining thermal loading Many various sensitivities/studies performed to account for: Wind forecast errors Load forecast errors Topology changes

• Offline Voltage Stability Assessment (VSA) performed days in advance Ensures the loss of critical facilities does not violate voltage

criteria

• SPP has 8,000 MW Quick Starts available in 1 hour19

Integrated Marketplace Timeline

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OR = Operating ReserveDBDA = Day Before Day-Ahead

Operating Day (OD)DA or OD−1

DA Market Clearing

(0930 to 1400)

DA RUC Begins(1445) Intra-Day (ID) RUC

(OD−1 1715 through OD)

Real-Time Balancing Market (RTBM)

Pre Day-Ahead (DA)

Post Load Forecast and OR

Requirements(0600)

DBDA RUC(0000 to 0300)

MDRA(OD−7 to OD−1)

DA RUC Results(1715)

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10 GW Swing in Wind Generation within 24 Hour PeriodJanuary 10, 2017

Regulation Requirements Include the Impact of the Loss and Variability of Wind Generation

220

50

100

150

200

250

300

350

400

450

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

MW

Hour of Day

Average of Load Magnitude Componet Average of Load Variability Component

Average of Wind Magnitude Component Average of Wind Variability Component

“Wind Variability” component creates higher requirement on average during morning hours, as wind is typically ramping down during this time (expected use of Regulation Up during this time)

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SPP Essential Reliability Services

1st half 2017

2nd half 2017

1st half 2018

2nd half 2018

1st half 2019

2nd half 2019

1st half 2020

Flexible Product evaluation

Various policies to enhance integration of renewables

Enhancing Wind and Solar Forecasting

Evaluate and enhance planning processes to address voltage

Voltage tools, policies, and procedures

Operational Transient tools, policies, and procedures

Hours With Negative Prices

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How Can Market Design Changes Help?

• NDVER to DVER Conversion

• Enhanced VER Data for Forecasting

• DVER Regulation Enhancement

• Regulation-up Market Design for VERs

• Stored Energy Resources (Order 841)

• Fast Start Resources

• 30 Minute Product

• Ramp Product

• Primary Frequency Response – Future Consideration

• System Inertial Response – Future Consideration

• Preparing for growth of solar generation

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Overview of HITT Policy Issues

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• SPP’stransmissionplanningandstudyprocesses,includingbutnotlimitedto,GenerationInterconnections(GI);theGIqueue;AggregateStudies;EnergyResourceInterconnectionService(ERIS)andNetworkResourceInterconnectionService(NRIS);capacityrequirements,includingmoreattributesthanenergy;andrelatedFERCplanningrequirements;

• Transmissioncostallocationissues,includingbutnotlimitedto,Highway/Byway,directlyassignedcosts,AttachmentZ2credits,costallocationimpactsontransmissionpricingzoneswithlargewindresources,andstatebystatesupplyresourcemixrequirementsand/orgoals;

• IntegratedMarketplaceimpactsrelatedtoachangingresourcemix,accesstolowercostgeneration,potentialchangesinproductiontaxcredits,approachofusingmarket‐basedcompensationforvaryingattributesofdifferenttypesofgenerators,etc.;

• Disconnectsorpotentialsynergiesbetweentransmissionplanningandreal‐timereliabilityandeconomicoperations;and

How High Can We Go?

• Transmission expansion has dramatically helped deliver new resources to load and reduced energy prices

• Technology improvements continue to help Forecasting and Turbine Manufacturing

Storage

• Fossil units must provide more flexibility: reduce minimum run output and shorten start times Ramp capability will be an important market aspect in the future

• We must have dispatchable generation available

• Production Tax Credit will impact growth

• Don’t forget solar!

• Wind penetration limit is system dependent!! Potential for 75% wind penetration today Total annual wind energy approaching 30% 27

It Takes “All Of The Above” To Make It Work

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