FERC Smart Grid plan would affect power generators

By David Wagman
Chief Editor

The Federal Energy Regulatory Commission last week issued a 40-page draft "Smart Grid Policy." Power generators nationwide could be affected by the policy's call to develop standards to address the large amounts of renewable energy resources likely to be developed in coming years and the eventual deployment of plug-in electric vehicles.

Public comment on the draft is being accepted. FERC's proposed policy is part of Docket No. PL09-4-000 issued March 19. It was published in the Federal Register and at the Commission's web page at www.ferc.gov.

FERC said smart grid advancements will apply digital technologies to the grid and enable real-time information coordination from generation resources, demand resources and distributed energy resources.

The smart grid concept envisions a power system that permits two-way communication between the grid and essentially everything connected to it, including generation and large consumer appliances.

FERC said interoperability will enhance the bulk power system's efficiency at the same time it enables tools such as demand response systems to help consumers better manage energy use.

Interoperability will also help integrate "significant new renewable power" into the transmission system and support state and federal efforts to promote still more renewable energy.

According to the North American Electric Reliability Corp. (NERC), the U.S. had 25,170 MW of nameplate wind capacity installed as of December. NERC said another 145,000 MW of wind power projects are planned or proposed over the next 10 years. Some parts of the bulk power system may need to integrate what FERC described as "unprecedented amounts of variable generation resources." Such integration is significant because operators of variable generation have less control over when the resource is available to produce electricity.

FERC Mandate
The draft policy comes as part of FERC's responsibility under the Energy Independence and Security Act of 2007 to adopt standards and protocols to ensure smart grid functionality and interoperability in transmission as well as in regional and wholesale energy markets.

Large amount of variable generation raise several operational and planning issues, including:

• Resource adequacy
• Resource management
• Reduced system inertia

FERC said a variety of solutions may be feasible, including deploying large amounts of storage, which it said could address both resource adequacy and resource management concerns. However, technical and economic issues remain to be addressed before such investment is likely to become significant.

Addressing resource management, the FERC draft policy highlighted the problem of potential over-generation, which can occur during off-peak periods when load is at its lowest and system operators have turned off all but their largest conventional units. If large amounts of variable generation begin producing during these times, then the electricity supply could exceed demand and risk unbalancing the bulk power system.

To keep the system in balance under such conditions, operators may be forced to require variable generation to reduce output. FERC said the downside is that the variable generation may be producing the lowest-priced energy on the system.

A system allowing entities to receive timely signals to shift their demand and allowing such load shifts to be controlled by the system operator could ease concerns with over-generation.

"The urgency to develop and implement those aspects of a smarter grid that can enable such demand response capability is clear," FERC said.

Plug-in Vehicles
FERC also addressed electricity-powered vehicles and their potential affect on the grid and power generators.

"Judging by the observed intensity of electric utility and state government interest in this area, the potential for a significant shift in personal transportation to electric power in the near future cannot be discounted."

Ultimately, FERC said, large numbers of plug-in vehicles have the potential to provide some ancillary services like distributed energy storage or regulation services, when aggregated.

FERC said the smart grid's enhanced information processing and high-speed communications and control capabilities would prove "extremely helpful, perhaps necessary" in dealing with the challenges and opportunities associated with large numbers of new electric vehicles on the bulk power system.

Frameworks and Standards
The FERC draft policy proposes to prioritize development of standards for cyber security and a "common semantic framework and software models" to "enable effective communication and coordination." It also proposes to develop standards for wide-area situational awareness (which it defines as the visual display of systems conditions in near real time at the reliability coordinator level and above), demand response, electric storage and electric transportation.

Addressing energy storage, FERC said the only significant electricity storage technology to date has been pumped storage hydroelectric technology. New storage technologies are under development, however, which could provide "substantial value" to the electric grid.

Turning to electric transportation, FERC said maintaining reliable operation of the bulk power system will require some level of control over when and how electric cars draw electricity off of the system.

"Ultimately we would hope for a smarter grid to accommodate a wide array of advanced options for electric vehicle integration with the grid, including full vehicle-to-grid capabilities," FERC said.

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