Underground storage allows gas users and traders to hedge against price volatility. Building more capacity will help North America fully integrate into global gas markets.
Winds of Change Freshen Resource Adequacy
Intermittent and interruptible resources increasingly are being considered in regional resource adequacy calculations—but the approaches differ.
While both NERC and the NERC regional councils (known today as the Electric Reliability Organization) have standards and guidelines for resource adequacy and system reliability, much of the specificity as to how interruptible ( e.g., demand-side) and intermittent resources ( e.g., wind) are included is left up to the individual ISO/RTOs, states, provinces, etc. In fact, the various regions across North America each seem to have their own methodology for incorporating these resources into their resource adequacy and reserve-margin calculations.
As the North American energy industry escalates its desire to reduce greenhouse-gas emissions through the expanded use of demand-side resources and intermittent renewables, the importance of this topic also will escalate.
In Alberta: A Debate
Alberta approaches its reserve margin differently than do all other ISO/RTOs. Instead of defining a reserve margin based on installed capacity, Alberta establishes a reserve margin based on effective generation capacity. Starting with total installed capacity, the Alberta Electric System Operator (AESO) subtracts out the following: mothballed capacity, a derating for hydro not available in the peak winter season, and a derating for wind because of its low capacity factor and variable output. For December 2005, the AESO established the reserve margin in this manner at 10 percent. What this figure means to the AESO is that when the differential between peak load and effective capacity falls to 10 percent, generation owners will add new capacity in response to market-price signals.
Wind generation in Alberta typically has a capacity factor in the 30 to 35 percent range, with output being higher during the winter peak. However, in calculating effective capacity, the AESO includes wind at a value of 20 percent of nameplate capacity. The AESO’s calculation of its total effective generating capacity does not appear to incorporate interruptible resources.
AESO has performed two in-depth wind integration impact studies that are available on the AESO Web site. 1 The first study, completed in November 2005, identified the following operational and performance issues related to wind development:
• Increasing amounts of wind power on the interconnected system increases operational uncertainty;
• A significant portion of the wind power capacity may appear or disappear over a three- to five-hour period due to a “ramping effect”;
• Increases in installed wind capacity will increase the magnitude of the ramping effect and result in operational performance issues on the Alberta system; and
• For the AESO, operational performance issues are apparent at the 900-MW level of wind development (which is 10 percent of the AESO’s total installed capacity) and mitigating measures are required to maintain system performance at acceptable levels. These mitigating measures include: developing wind power forecasting techniques, increasing regulating reserves, increasing transmission reliability margins, and placing constraints on wind power facilities.