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A PRIMER ON THE U.S. ELECTRIC GRID ©2012 Image: Public Domain, NOAA, NASA.Mayhew, C. & Simmon, R. (2000)
Sage Kochavi
PART ONE: FOUR GRID COMPONENTS •Physical Infrastructure •Control Network •The Marketplace •Regulatory Agreements A Primer on the U.S. Electric Grid ©2012 Sage Kochavi
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INTRODUCTION TO THE US ELECTRICAL GRID 3
How did it come to be this way? A Brief History of the U.S. Electric Grid: Vertical Monopoly to (somewhat) De-Regulated Marketplace
INTRODUCTION TO THE US ELECTRICAL GRID 4
A Brief History of the U.S. Electric Grid Natural Monopoly: More efficient
Broadway, New York City, 1890
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CONSEQUENCES OF SECURING RIGHT-OF-WAY
• The Gray Wolves of Chicago • Samuel Insull Time Magazine, Nov 4, 1929
Brief history of the U.S. Electric Grid
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ESSENTIAL GRID QUALITIES: THERE IS NO STORAGE ON THE GRID SUPPLY AND LOAD ARE MATCHED IN REAL TIME LOAD USES THE NEAREST SUPPLY PHYSICAL INFRASTRUCTURE
FOUR GRID COMPONENTS •Physical Infrastructure •Control Network •The Marketplace •Regulatory Agreements
A Primer on the U.S. Electric Grid ©2012 Sage Kochavi
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PHYSICAL INFRASTRUCTURE 8
Bulk Power System
Generation Image: xedos4 / FreeDigitalPhotos.net
Transmission Image: tungphoto / FreeDigitalPhotos.net
Distribution Image: K.Tietz / www.freerangestock.com
PHYSICAL INFRASTRUCTURE 9
Bulk Power System
Transformers
Usage Meters
PHYSICAL INFRASTRUCTURE 10
Transmission of Energy As electricity flows through power lines, some of the electricity is ‘wasted’ by heat. This heat can cause lines to sag. This ‘line loss’ of energy means that more energy is needed to be produced to account for predictable losses in transmission. Line loss is less in higher voltage lines, but cumulatively increases over distance and during high demand. It can be as high as 30%.
PHYSICAL INFRASTRUCTURE 11
Bulk Power System
U.S. DOE 2004
Generation, Transmission, and Distribution
PHYSICAL INFRASTRUCTURE 12
3 Interconnections (Synchronous Grid)
WESTERN
EASTERN
TEXAS
8 Regional Reliability Councils
PHYSICAL INFRASTRUCTURE 13
Transmission Line in USA (DC and AC, over 230kV) 1999: 157,810 miles 2011: ~ 211,000 miles (FERC)
(NERC)
PHYSICAL INFRASTRUCTURE 14
Types of Generation Fossil • Natural Gas • Coal • Petroleum
• • • •
Renewable
Other
Wind Solar Geo-thermal Solar Thermal
• Nuclear • Hydro (dams) • Hydro (tidal)
PHYSICAL INFRASTRUCTURE 15
Pseudo Generation Storage
• Flywheel • Pumped Hydro • Chemical • Hydrogen • Solar Thermal
FOUR GRID COMPONENTS •Physical Infrastructure •Control Network •The Marketplace •Regulatory Agreements
Introduction to the U.S. Electrical Grid Sage Kochavi
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CONTROL NETWORK 17
2000:
912 Rural electric co-ops 239 Investor-owned entities 2,009 Public (non-federal) entities 10 Federal entities 811 GW capacity (Casazza & Delea 2003)
2009:
17,876 Generators online 1,122 GW Capacity (EIA 2011)
CONTROL NETWORK 18
NERC Regions (8) & Balancing Authorities North American Electric Reliability Corporation
CONTROL NETWORK 19
CONTROL NETWORK 20
PJM Control Room
From: http://pjm.com/about-pjm/learning-center/pjm-overview/ pjms-role-in-energy-industry.aspx?faq={48DAB9A3-A800-4432-A1FC-0CC49C004EFF}
CONTROL NETWORK 21
CONTROL NETWORK 22
CONTROL NETWORK 23
• RTOs and ISOs act as “Balancing Authorities” • Non-profit entities • Goal: Reliability, Fair Market ISO New England: “ISO New England meets this obligation in three
ways: by ensuring the day-to-day reliable operation of New England's bulk power generation and transmission system, by overseeing and ensuring the fair administration of the region's wholesale electricity markets, and by managing comprehensive, regional planning processes.”
FOUR GRID COMPONENTS •Physical Infrastructure •Control Network •The Marketplace •Regulatory Agreements
A Primer on the U.S. Electric Grid ©2012 Sage Kochavi
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THE MARKETPLACE 25
An Analogy: Coffee • Ground Beans • Whole
Brewed
Grown
• To-go • Table Service
• Wholesale • Picked
Image: public domain, courtesy of http://thumbs.dreamstime.com/thumbimg_113/11687911420XgfQ7.jpg
THE MARKETPLACE 26
Overview • Auctioned Whole -saler • Day Ahead • Real Time Broker Sold (retail)
• Bought from a Utility • Contracted
• Wholesale Power Plant • Home Generation
THE WHOLESALE MARKET Generator
Capacity
$/MW
A B C
500 250 100
$25.00 $21.00 $18.00
Capacity Needed 95
325
Supply, Demand & Price Matching Scenarios
400
700
900
Generator
Price Paid/MW
MW Supplied
A B C A B C A B C A B C A B C
0 0 $18.00 0 $21.00 $21.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00
0 0 95 0 225 100 50 250 100 250 250 100 500 250 100
extra-regional supply
>$25.00
50
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THE MARKETPLACE: Generation Competition
THE WHOLESALE MARKET Generator
Capacity
$/MW
A B C
500 250 100
$25.00 $21.00 $18.00
Capacity Needed 95
325
Supply, Demand & Price Matching Scenarios
400
700
900
Generator
Price Paid/MW
MW Supplied
A B C A B C A B C A B C A B C
0 0 $18.00 0 $21.00 $21.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00
0 0 95 0 225 100 50 250 100 250 250 100 500 250 100
extra-regional supply
>$25.00
50
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THE MARKETPLACE: Generation Competition
THE WHOLESALE MARKET Generator
Capacity
$/MW
A B C
500 250 100
$25.00 $21.00 $18.00
Supply, Demand & Price Matching Scenarios Both generators get paid the highest price that was taken up.
Capacity Needed 95
325
400
700
900
Generator
Price Paid/MW
MW Supplied
A B C A B C A B C A B C A B C
0 0 $18.00 0 $21.00 $21.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00
0 0 95 0 225 100 50 250 100 250 250 100 500 250 100
extra-regional supply
>$25.00
50
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THE MARKETPLACE: Generation Competition
THE WHOLESALE MARKET Generator
Capacity
$/MW
A B C
500 250 100
$25.00 $21.00 $18.00
Supply, Demand & Price Matching Scenarios All of the generators receive highest price: LOCATIONAL MARGINAL PRICING
Capacity Needed 95
325
400
700
900
Generator
Price Paid/MW
MW Supplied
A B C A B C A B C A B C A B C
0 0 $18.00 0 $21.00 $21.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00
0 0 95 0 225 100 50 250 100 250 250 100 500 250 100
extra-regional supply
>$25.00
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THE MARKETPLACE: Generation Competition
THE WHOLESALE MARKET Generator
Capacity
$/MW
A B C
500 250 100
$25.00 $21.00 $18.00
Who are A,B,C? A-expensive to build, fuel, run B-moderate costs C-low investment cost, cheap fuel
Capacity Needed 95
325
400
700
900
Generator
Price Paid/MW
MW Supplied
A B C A B C A B C A B C A B C
0 0 $18.00 0 $21.00 $21.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00
0 0 95 0 225 100 50 250 100 250 250 100 500 250 100
extra-regional supply
>$25.00
50
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THE MARKETPLACE: Generation Competition
Market Design 32
CALIFORNIA DAY-AHEAD AVERAGE WHOLESALE PRICES, APRIL 2000 – DECEMBER 2000
Dollars per MWh: from ~$25 to >$250 in 9 months
Source: California Energy Commission, California Energy Almanac, www.energy.ca.gov/electricity/wepr/monthly_day_ahead_prices.html
FOUR GRID COMPONENTS •Physical Infrastructure •Control Network •The Marketplace •Regulatory Agreements
A Primer on the U.S. Electric Grid ©2012 Sage Kochavi
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REGULATORY AGREEMENTS 34
• PUCHA (1935) • PURPA (1978) • FERC Orders 888/889 (1996) • FERC Order 2000 (1999) • State Restructuring Regulations
REGULATORY AGREEMENTS 35
FERC Order 888 (1996)
• Required utilities that controlled the transmission of energy to have open access non-discriminatory transmission tariffs.
• Unbundling transmission from generation is necessary to achieve nondiscriminatory open access transmission of energy
REGULATORY AGREEMENTS 36
Deregulation Effects •Price Volatility •Hedging Contracts •Overall price increases
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End of Part One: The Four Grid Components Questions
PART TWO: SYSTEM EVALUATION •Demand-Side Management •Market Deign •Regulatory Agreements
A Primer on the U.S. Electric Grid ©2012 Sage Kochavi
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BASIS FOR EVALUATION 39
Goals: -Reduce Need for More Infrastructure -Increase Reliability -Reduce Costs
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DEMAND-SIDE CONSERVATION: A COMPARISON OF ELECTRICITY CONSERVATION MEASURES Sage Kochavi © 2012
A Metaphor for Electricity Pricing 41
WHAT IF?
A Metaphor for Electricity Pricing 42
YOU NEVER SAW THE PRICES ON THE GROCERIES YOU BUY?
A Metaphor for Electricity Pricing 43
A Metaphor for Electricity Pricing 44
A Metaphor for Electricity Pricing 45
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Poor Price Signals DAILY USE
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Flat-rate Pricing Lacks Incentive to Conserve when Demand is High.
Grid capacity is based on peak demand, a period of 20 – 60 hours per year. 47
PEAK SHAVING Reducing the peak demand: results in lowering grid capacity and the use of peaker plants.
Left side: normal daily usage.
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Right side: energy use redistributed to off peak hours (OTI 2011).
LOAD SHIFTING Change usage to periods of lower demand, reducing the need for peaker plant power generation.
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1. IN-HOME DISPLAY 2. TIME-VARYING PRICING – SEVERAL TYPES 3. REAL TIME PRICING WITH ADVANCED METERING
THREE EXPERIMENTAL TREATMENTS
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1. IN-HOME DISPLAY 2. TIME-VARYING PRICING – SEVERAL TYPES 3. REAL TIME PRICING WITH ADVANCED METERING
THREE EXPERIMENTAL TREATMENTS
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1. IN-HOME DISPLAY 2. TIME-VARYING PRICING – TWO TYPES 3. REAL TIME PRICING WITH ADVANCED METERING
THREE EXPERIMENTAL TREATMENTS
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1. IN-HOME DISPLAY 2. TIME-VARYING PRICING – SEVERAL TYPES 3. REAL TIME PRICING WITH ADVANCED METERING
THREE EXPERIMENTAL TREATMENTS
Time – Varying Pricing 53
• Customers notified in advance of “Critical Peak • • •
Pricing” when $ per kW will jump much higher for a few hours. 20 – 60 hours per year, mostly in the summer Requires new communication but no new equipment Customers avoid using electricity or they get a rebate for curtailing usage. (CPP vs. CPR)
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1. IN-HOME DISPLAY 2. TIME-VARYING PRICING – SEVERAL TYPES 3. REAL TIME PRICING WITH ADVANCED METERING
THREE EXPERIMENTAL TREATMENTS
Advance Meter Infrastructure 55
Advance Meter Infrastructure 56
Conclusions and Recommendations: 57
• Begin with IHD’s (In-Home Displays), with temporary installations.
o -Enduring behavior change o -Absolute energy usage reduction
Conclusions and Recommendations: 58
• Begin with IHD’s (In-Home Displays), with temporary installations.
• Add Critical Peak Pricing or Rebates for peak days. o -Targets inefficient peaker plants o - Reduces the need to add more generators & grid structure o - Downsides: unknown persistence & load-shifting
Conclusions and Recommendations: 59
• Begin with IHD’s (In-Home Displays), with temporary installations.
• Add Critical Peak Pricing or Rebates for peak days. • Avoid hourly pricing and AMI until it is necessary – electric cars, remotely control house functions, energy market structure stabilizes.
DEMAND-SIDE-MANAGEMENT RESULTS 60
Goals: ? -Reduce Need for More Infrastructure ? -Increase Reliability ? -Reduce Costs
MARKET DESIGN RESULTS 61
Goals of Deregulation: -Reduce Costs -Reduce Need for More Infrastructure -Increase Reliability
MARKET DESIGN RESULTS 62
Price per kW in cents 1990 2011 % change 38 States regulated 12 States deregulated 50 States* Deregulated States' Price Difference from the Average Price
5.9
8.86
50.2%
8.07
13.27
64.4%
6.42
9.92
54.5%
25.7%
33.8%
*Compiled From EIA 1990 - 2011 data. Excludes HI, Includes DC. 12 Deregulated States: CA, CT, MA, MI, ME, MD, RI, TX, NH, DE, NJ, NY.
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MARKET POWER, COMMUNITY POWER: AGGREGATION FOR BETTER PRICING AND EFFICIENCY MARKET DESIGN RESULTS
MARKET DESIGN RESULTS 64
Municipal Aggregation over 21 towns Municipal Aggregation over 36 towns and cities
MARKET DESIGN RESULTS 65
$4,700,000 savings in 33 months (May ‘02-Dec ‘04)
$28,386,000 savings in 116 months (July ’99-March ’09)
MARKET DESIGN RESULTS 66
Goals: ? -Reduce Needs for More Infrastructure ? -Increase Reliability ? -Reduce Costs
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REGULATORY RESULTS
REGULATORY RESULTS 68
Goals: -Reduce Need for More Infrastructure -Increase Reliability -Reduce Costs
MA Retail Customers Who Chose Non-Default Energy Suppliers 69
By 2000:
0.002%
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MA Retail Customers Who Chose Non-Default Energy Suppliers 70
By 2011:
14%
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Status of Deregulation by September 2010 GREEN = Deregulated YELLOW = Suspended WHITE = Not Active
Source: Energy Information Administration
REGULATORY RESULTS 72
• Reliability: • FERC Order 2000 • Seven minimum functions of an RTO: • #7 Plan new transmission price stability, grid security, adequate infrastructure and
control network to assure uninterrupted service, adequate reserves & reactive power.
expansion and cost allocation
TRANSMISSION 73
Agencies Involved in Transmission Siting FERC Army Corps of Engineers U.S. Fish & Wildlife EPA BLM USFS DOT FHA RTOs
BATFE Federal Aviation Administration State Utility Commissions Private Landowners State Courts/Eminent Domain Commissions Federal Eminent Domain Court Council on Environmental Quality
REGULATORY RESULTS 74
NIMBY: Not in My Back Yard LULU: Locally Undesirable Land Use BANANAs: Build Absolutely Nothing Anywhere Near Anything
TRANSMISSION LINE INSTALLATION COSTS 75
FROM AMERICAN ELECTRIC POWER (AEP 2008): Typical installed costs for 765 kV, 500 kV and 345 kV transmission lines are: Voltage Class Cost Range/Mile* 765 kV Single Circuit $2.6 – 4.0 Million 500 kV Single Circuit $2.3 - 3.5 Million 345 kV Double Circuit $1.5 - 2.5 Million 345 kV Single Circuit $1.1 – 2.0 Million *Average construction costs in 2008 dollars; rural terrain with rolling hills; elevations up to 4000 feet above sea level; includes siting and ROW costs; excludes station costs.
REGULATORY RESULTS 76
SCADA & RELIABILITY “Supervisory Control and Data Acquisition” Detects congestion Suggests best locations Algorithms for ‘better’ failures
REGULATORY RESULTS 77
SCADA & RELIABILITY NORTH AMERICAN BLACKOUT OF 2003 ISLANDING & CASCADING
Image from: (2011)Lokal_Profil https://en.wikipedia.org/wiki/File:Map_of_North_America,_blackout_2003.svg
REGULATORY RESULTS 78
? ? ?
Goals: -Reduce Need for More Infrastructure -Increase Reliability -Reduce Costs
Knowing all this, what do we do to make the grid more reliable, less expensive, and better for the environment? 79
RECOMENDATIONS 80
More involvement in local Public Utility boards More outreach and education about alternative
competitors for retail sales More publicity about PPAs (Power Purchase Agreements) Better SCADA procedures to eliminate cascading blackouts Wider-spread usage of meters to encourage conservation* *Until we have more energy that we need and everyone has a large hadron collider in their backyard.
RECOMENDATIONS 81
Distributed Generation Aggregated Market Power
Copyright © URL National Fuel Cell Research Center, University of California, Irvine, CA
PUT LOADS NEAR GENERATORS
Less Power Wasted from Line Loss over Long Distances Less Need for Reactive Power Generation Greater Distribution of Generators Increases Grid Resilience Intermittent Power Sources (Wind, Solar) Smoothing Effect Ability to Sustain Power During Transmission Outages System Designed for Peculiarities of the Locale
PUT LOADS NEAR GENERATORS
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THANK YOU
[email protected]
Image: Public Domain, NOAA, NASA.Mayhew, C. & Simmon, R. (2000)
A Primer on the U.S. Electric Grid