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RenewElec
October 21, 2010
Robert Nordhaus, David Yaffe Van Ness Feldman1050 Thomas Jefferson Street, NWWashington, DC 20007-3887(202) 298-1800
FERC’s Role in Renewable Electricity Integration:
The Bulk Power System, Wholesale Markets and Reliability Standards
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Overview
FERC’s Role
Ongoing Proceedings at FERC that Address Key Renewable Issues
Opportunities for RenewElec Input
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FERC’s Role
Regulates rates, terms and conditions of unbundled transmission services over the interstate transmission
grid and wholesale power sales using that grid Tariff and contract approvals General rules, including pro forma OATT
Regulates RTOs and ISOs (outside ERCOT)
Supervises NERC, which sets mandatory reliability standards for the bulk power system
Limited role in transmission planning and siting
Establishes, with state commissions, ground rules for small renewable projects under PURPA
States (not FERC) regulate retail power sales, local distribution, generation and most transmission siting, and “bundled” retail energy and transmission services
Transmission and Wholesale Sales
Organized Markets
Reliability
New Transmission
Small Renewables
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Ongoing Proceedings at FERC Impacting Renewables
Integration of Variable Energy Resources
Notice of InquiryJan. 2010
Transmission Planning and Cost Allocation
Proposed Rule June 2010
Demand Response Standards and Pricing as a Generation Resource
Final Rule (Standards)April 2010Proposed Rule (Pricing)March 2010
Electric Storage Technologies Request for Comments March 2010
Renewable Integration under OATT Case-by-case Orders
NERC reliability standards Significant changes to be considered
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Integration of Variable Energy Resources (VERs) Jan. 2010 FERC Notice of Inquiry takes a “fresh
look” at barriers to transmission service and wholesale markets for VERs (e.g. wind, solar)
Comments solicited on 7 topics: Data and Reporting Requirements Scheduling Practices and Incentives Forward Market Structure; Reliability Commitment Balancing Authority Coordination Reserve Products and Ancillary Services Capacity Markets Redispatch and Curtailment Practices
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Transmission Planning and Cost Allocation June 2010 proposed rulemaking
If finalized as proposed, transmission providers must amend OATTs (or safe harbor tariffs) to reflect: Region-wide transmission planning
Elimination of rights of first refusal
Interregional transmission planning agreements
Regional and inter-regional cost allocation methodologies
Could stimulate new investment in renewables-oriented transmission (including merchant lines)
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Demand Response
Two areas of demand response (DR) being addressed that could expand use of DR in wholesale markets
(i) April 2010 – Standard DR performance metrics adopted
FERC codified industry-standard terms and protocols for evaluating DR performance in wholesale markets
(ii) March 2010 – Proposed Rule to set DR pricing scheme
RTOs/ISOs that allow DR as generation resource would be required to pay DR providers, at all hours, the locational marginal price (LMP) for energy reduced
Pushback from commenters
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Electric Storage Technologies
Electric storage has many uses A generation resource An ancillary service for transmission A distribution asset
March 2010 – FERC Staff requests comments on rates, accounting and financial reporting for electric storage technologies to lay foundation for categorizing varied storage services for rate purposes
Clear rules for electric storage compensation could expand quick-ramping electric storage ancillary services to complement renewable integration
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OATT Rules
Ancillary Service Charges Charges for “wind following” ancillary services, like
generator imbalance Approved, but no clear precedent “Proxy generator” approach to calculate marginal cost of
wind following ancillary service Rejected in 2010
Interconnection Rules Special interconnection rules and procedures for large wind
generators (> 20 MW) Exempt from power factor requirement for synchronous
generators Mandatory low voltage ride-through capabilities Reactive power requirement evaluated on basis of need,
case-by-case
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NERC Reliability Standards
NERC develops and enforces reliability standards, subject to FERC approval
2009 NERC Report: off-peak nature of most new renewables requires “significant changes” to traditional grid planning and operations to maintain reliability.
Wind - 229 GW total new capacity, 38 GW on-peak
Solar - 20 GW total new capacity, 17 GW on-peak
Over the next two years, NERC’s Integrating Variable Generation Task Force will publish reports recommending “significant changes” to reliability standards to accommodate large-scale renewable electricity integration
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Conclusion
Capacity and accessibility of bulk power system and wholesale markets to accommodate renewables is major issue within FERC’s (and NERC’s) domain
Renewables will also be indirectly impacted by FERC rules on electric storage and demand response
RenewElec opportunities to inform FERC: Filing comments in ongoing proceedings
Briefing Commission staff
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October 21, 2010
ROBERT NORDHAUS [email protected]
DAVID YAFFE [email protected]
Thank you. Questions?
