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Plunging Wind Into the Grid

The California ISO's intermittent resource program addresses a key market barrier to wind power: how to schedule wind energy in forward markets.
Fortnightly Magazine - June 15 2003

it inadvertently made it more difficult to accommodate the variability of wind power into the state's power plant portfolio.

Since ISOs have emerged in other regional power markets in the Northeast, Mid-Atlantic, and the Midwest, the challenges facing the California ISO are shared with others, making the shift away from command-and-control paradigms toward open competition. Given growing environmental pressures and concerns about increasing the diversity of power supplies, the lessons learned in California could have wide-ranging applications throughout the country.

The California ISO relies on market-based bidding of transmission resources to a much greater extent than do other ISOs. Given the large amount of existing intermittent wind power capacity in California, the California ISO was forced to evaluate solutions to accommodate the complexity of managing 1,800 MW of wind power capacity (of which 1,200 MW could show up in real time) while balancing total control area loads and generation on a continuous basis. Since the California ISO is required to forecast energy needs in the next 10 minutes, next 20 minutes and so on, and then send dispatch notices to generators, wind power's variability posed immense problems. It was the classic problem of fitting a square peg into a round hole.

Accommodating intermittent wind power resources at the state level at California ISO exposed challenges that also were mirrored at the federal level. The transmission protocols designed by FERC inadvertently penalize wind power, according to Jim Caldwell, AWEA's policy director. FERC's existing transmission pricing policies can double the wholesale cost of wind-generated electricity, he pointed out. The operational profile of wind projects represents a key hurdle to overcome if wind power is expected to play a larger role in the California ISO's power supply portfolio.

Because of its seeming unpredictability, wind generators were faced with relatively large imbalance energy costs. Why? To get price certainty, the California ISO is required to schedule energy production from generators in advance. With wind power, the actual energy production will always deviate from these day-ahead or hour-ahead schedules. The net deviation between scheduled and delivered energy created risk for wind projects, making them more difficult to finance.

Among the key challenges linked to wind power from the California ISO's perspective are the unpredictability of output from not only each wind turbine, but also entire wind projects, on a day-ahead, hour-ahead, or even minute-by-minute basis. Due to this variability, integrating wind projects into the California ISO transmission control area may require the purchase of regulation services from other generators to balance moment-to-moment deviations from schedule by intermittent resources. This may increase costs associated with electricity generated from the wind projects.

Also, many wind projects are in areas where the wind characteristically blows at night, so that is when they produce much of their electricity. This off-peak production of electricity may sometimes add to over-generation problems in California at night when energy demand is lowest. Given the unpredictability of wind project output, California's wind resources can actually add to transmission line overloads. Wind-generated electricity also is non-dispatchable, limiting what dispatchers at the California ISO can do with wind