Top officials at several U.S. retail gas companies reveal how they are rethinking their business models and developing new approaches to serve customers in the face of supply concerns and price...
Leaning on Line Pack
Green energy mandates might overburden gas pipelines.
vary among ISOs.
As a general rule, the cost of AGC resources is socialized across load in the market area. To meet reliability objectives, ISOs procure either 10-minute spin, 10-minute non-spin, or 30-minute operating reserves through the market or based on bilateral arrangements. In addition to covering for contingencies, each of these reserves is used to balance load variations. Also, resources designated by ISOs as black-start capability resources are typically compensated under the rate set forth in the tariff. The charges for system restoration are normally allocated to the transmission customers through the transmission rate.
The ISO’s Challenge
At present, the ISO systems’ load following capabilities are adequate with limited wind penetration. The following questions need to be addressed:
• Will market participants tolerate increased inefficiencies associated with re-dispatch and uneconomic commitments explained by frequent and unpredictable swings of large magnitude?
• Is the supply elasticity of ancillary services sufficiently high in light of aggressive RPS targets?
• Will ISOs change market rules to accommodate the integration of intermittent resources?
• What is the best way to define a stakeholder process oriented around market rule changes?
ISOs are required to balance supply and demand 24 hours a day—all 31.5 million seconds of the year. Although energy storage-based regulation can be practical and less costly, it is limited to the short time scale of milliseconds to minutes. Energy storage based regulation can’t supply the quantities required in a low-wind crisis event. Reliance on dispatchable and quick-start resources to provide 10-minute spin, 10-minute non-spin, and 30-minute operating reserves can mitigate the cost of market inefficiencies related to the integration of new wind resources. Ensuring that sufficient or additional fast-ramping resources are available could require long term contracts to cover the fixed operating costs of these units. 11
Economic inefficiencies can arise from certain operational restrictions in ramping up gas-fired generation; availability of gas on no notice or short notice; and strictly enforced reliability standards governing acceptable frequency and voltage deviations. On the electric side, these inefficiencies encompass sub-optimal unit commitments and uplift. Involuntary load shedding is an operational fix of last resort. Load shedding might be necessary when a system operator doesn’t have other resources available to ramp-up fast enough and in large enough increments when wind production unexpectedly drops off the proverbial cliff. The problem is compounded when load is racing in the opposite direction. Hot, humid days frequently characterize exactly this situation, when load soars and wind forecast error deviates from MAE. However, temperate nights when load is stable but wind forecast error deviates from MAE also can stretch the system operators’ ability to procure sufficient ancillary services to avert voltage collapse. Penalties that are enforced on the gas system for unauthorized overpulls associated with gas use on a no-notice or short notice basis deter quick-start resources from “answering the bell,” that is, providing the requisite ancillary services to minimize or avoid market inefficiency.
February 26, 2008, was a learning experience both for the system operator in Texas and ISOs elsewhere in the United States and Canada. In the early evening, ERCOT