Coal, Gas

Ancillary Markets Provide Revenue Opportunity for Under-Utilized Gas Turbines

Issue 9 and Volume 107.

By: Drew Robb, Robb Editorial

The deregulated electric power market is still a work in progress, and will be for some years to come. Like claim jumpers in a gold rush town, a few tried to gain a quick buck from an immature system. A more sensible approach, however, is to maximize the productivity of existing assets in order to produce real value.

One approach that is gaining favor is to leverage existing equipment to economically participate in the synchronous condensing and spinning reserve markets. “For a generator who is not currently providing spinning, the new market offers the possibility of an additional revenue stream,” says Stu Bresler, Manager of Market Development for PJM, a Regional Transmission Organization (RTO) based in Valley Forge, Pa., speaking of PJM’s new spinning reserve market, which opened for business in December 2002. Commonwealth Chesapeake Power LLC and PSE&G, for example, have taken advantage of this revenue opportunity by adding synchronous clutches to new gas turbine generators.

PJM Spinning Reserve Market Opens

PJM originally stood for the Pennsylvania-New Jersey-Maryland Power Pool, but it has since expanded well beyond its original bounds. Today, PJM is an RTO serving 25.1 million people in seven states (Delaware, Maryland, New Jersey, Ohio, Pennsylvania, Virginia and West Virginia) and the District of Columbia. It is composed of two areas, PJM and PJMWest (formerly Allegheny Power Supply), each of which has its own energy market. Together these markets cover 594 units, with a combined 66,000 MW of generating capacity and an annual output of 300,000 GWh. Additional expansion is likely, as AEP, Com Ed, and Dominion Energy have petitioned FERC to join PJM.

When PJM launched the spinning reserve market in December 2002, around one-third of its 1200-1400 MW of daily spinning reserve needs were already covered by synchronous condensing. Under the new rules, suppliers offer their services by 6 pm for the next day, stating their offer price and, if also providing condensing, how much energy it requires for spinning. PJM then orders spinning reserve, as needed, on an hourly basis and the generators stay on line until PJM calls back saying to take the unit off line.

“Part of the reason for creating a spinning reserve market is to create competition by encouraging more participants to enter the area,” says Bresler. “The basic theory is that market-based services provide better quality at lower prices.”

Gas Turbines Meet Spinning Reserve Needs

Prior to deregulation, spinning reserve – synchronized generating capacity ready to come on line within ten minutes of need – was not much of a problem. “In the old days there was enough margin on all plants to handle the worst case scenario – a large multiunit plant tripping off line,” says Joseph F. Camean, P.E., Senior Associate and Director of Energy Services for vanZelm Heywood & Shadford, Inc., a Mechanical and Electrical Engineering firm headquartered in West Hartford, Ct. “If there was a problem, the governors would open up and the customers never knew there was a problem.”

But privatization, together with the decoupling of generation and transmission, changed all that. Now, with power producers competing for business on an hourly basis, assets must be optimized. They can’t just be sitting there fired up in the hope that they will be needed. This has led to a greater use of gas turbines to meet reserve demands. “The GT peaking projects in some ways have supplanted the traditional spinning reserve,” Camean explains. “Putting an old steam plant on line was a long drawn out affair, taking several hours, while a GT with blackstart can be up in minutes.”

There are several methods for using a GT as spinning reserve. One option is to have multiple gas turbines connected to a common generator. One turbine would spin the generator providing a base load while the second, connected to the generator via a clutch, sits idle. When demand increases, the second turbine fires up and engages the generator as soon as it is up to speed. Another option is to have the generator operating as a synchronous condenser, with the clutched turbine firing up and engaging as needed.

“We are probably talking about a 30-40 percent reduction in cost when using a GT with a clutch,” says Camean, “as opposed to spinning reserve in a conventional installation where they leave a margin in the generating capacity.”

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PSE&G, a member of PJM, had GE Aero Energy Products, Inc. install Model 260T encased clutches from SSS Clutch Company Inc. (New Castle, Del.) on four GE LM6000 generators at its plant in Burlington, NJ, to provide synchronous condensing and spinning reserve capabilities. In the PJM market, gas turbines in synchronous condensing mode provide about one-third of the spinning reserve capacity (Figure 1).

SSS Clutch has installed more than 500 GT clutches. The largest is a 300 MW unit running at 3000 rpm at a pumped air storage plant in Germany, which has been operating since 1976. The synchronous self-shifting clutches are “freewheels” and operate in a similar manner to the freewheel on a bicycle. With a bicycle, when the rider moves the pedals at a speed equal to the rear wheel speed, the freewheel engages and the rider applies power to the wheel. But, if the wheel is moving faster than the pedals, it automatically disengages.

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With the turbine clutch (Figure 2), the clutch transmits torque through the full surface contact of the gear coupling teeth. When the turbine speed equals the generator speed, the pawls on one clutch element engage the ratchet teeth on the other clutch element. Additional rotation then causes the sliding component to move along the helical spines, engaging the drive teeth. When the turbine shuts down, the clutch automatically disengages.

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By using a clutch when providing synchronous condensing or spinning reserve, the generator can keep spinning, while the turbine is idle, rather than having to buy electricity to spin both or having to generate power at a low level which may be inefficient or unneeded. By disconnecting the turbine so it does not spin unfired, the result can be an 80 percent reduction in electricity costs, as shown in Table 1. In this example, a Pratt & Whitney FT8 TwinPac uses $225 worth of electricity per hour to provide spinning reserve. The addition of a clutch cuts that cost down to $48 per hour. By using such a clutch, power producers can achieve a higher operating margin or lower their bids in order to generate more business. This simple economic comparison does not include the potentially higher maintenance costs associated with spinning an unfired gas turbine or from the additional wear and tear of operating a gas turbine at part load.

Spinning Reserve Market

While there is money to be made in the spinning reserve market, it should only be entered after careful planning. The first step is to determine the financial impact of the operating profile, including evaluating what the market is willing to pay for added capacity.

“You can build a margin of capacity that you would sell or go with a GT with a clutch or a blackstart turbine that sits there cold,” says Camean. “Looking at the lifecycle economics of the project is the only way you can truly determine which way to go.”

While clutches save money for many plants, this may not be the best choice for everyone. The primary barrier is not having enough room in the building to fit a clutch between the turbine and the generator. But even if there is enough room, sometimes the numbers just don’t work out. If the generator is only providing spinning reserve on an occasional basis, the cost of the additional power can be lower than the cost of installing a clutch.

That was the case for Constellation Energy Group’s Handsome Lake plant in northwestern Pennsylvania. During the month of November, the plant didn’t submit a single bid since to do so would have meant contracting a day ahead for natural gas it might not use. Since the plant was not providing spinning reserve on a daily basis, it would have taken too long to justify the expense of installing the clutches.

“We could have significantly reduced our energy costs by adding clutches, but the payback was not there for us at the time,” says David Sullivan, Plant Facility Manager. “But we will continue to evaluate it as an option.”

For most plants, however, installing a clutch is probably the best way to be competitive in the spinning reserve market and to get better utilization out of gas turbine assets. As the PJM continues to expand both west and south, there will be greater opportunities for generator owners to participate in the PJM’s new spinning reserve market.

“The generating unit needs the physical capability to operate in the necessary configuration,” says PJM’s Bresler. “If it is a steam unit that follows PJM economic dispatch, it just needs to submit a market price; but if it is a combustion turbine, it needs a clutch so it can synchronize with the system.”

Author —

Drew Robb is the president of Robb Editorial, a company specializing in the writing of technical articles in the engineering and high tech fields. He graduated from the University of Strathclyde in Scotland, majoring in geology. Over the past five years, he has published more than 100 articles on a variety of engineering and power related subjects.

PJM’s Ancillary Markets

Spinning reserve marks PJM’s second ancillary market. The first was regulation to control short-term load fluctuations. Unlike spinning reserve, in which the output is requested by the PJM but activated by the supplier, regulation power is provided in direct response to a signal for more power generated by the PJM controllers (Automatic Generation Control). The amount of power scheduled for regulation is set at 1.1 percent of the forecast daily peak load.

When a supplier applies for the regulation market, the PJM conducts an unannounced test of that unit’s capacity. The test consists of four consecutive ten-minute periods in which the Area Regulation signal from the RTO is raised or lowered by predetermined amounts. PJM measures the unit’s response to these signals and then certifies the unit for regulation if it passes the test.