Ercot: Learn from Texas

Adrian Pieniazek opened his presentation with a personal evaluation of the Texas experience in integrating renewables. The NRG executive said the Electric Reliability Council of Texas (Ercot) likely is a few steps ahead of the nation’s other regional transmission organizations (RTOs) regarding renewables integration (Sidebars 3, 4). And while many milestones in its integration plan have been achieved successfully, he continued, there are lingering issues, and much work remains to meet established goals.

Ercot, which operates the electric grid and manages the deregulated market for three-quarters of the state, has more installed wind generation—nominally 10,000 MW—than any other region in the country. Wind capacity is expected to almost double soon after the transmission build-out in West Texas is complete in three or four years from now— according to the current schedule.

One thing for certain, there’s much to be learned from Ercot’s wind-integration efforts. The need for advance planning and new thinking in grid design and operation are particularly important to success. Pieniazek said, “You can’t plan the grid the same way you did in the pre-renewables era; it’s completely different.”

Two points important to the discussion that follows:

• The Ercot grid is not synchronized with either the Western or Eastern Interconnections, by choice, leaving it electrically isolated from the rest of the US except for a couple of dc interties with a total capacity of about 1100 MW.
• Ercot apparently has done an excellent job of integrating stakeholders into its decision-making process to gain consensus before important decisions are made. Pieniazek, for example, NRG’s director of market policy for Texas, is a member of the Ercot Technical Advisory Committee, the market-participant group responsible for making recommendations to the board regarding the RTO’s policies and procedures.

Getting started. Texas is much like other wind-rich regions: The resource is not where the load is. In Ercot’s case, most renewables potential is in the western and panhandle portions of the state while load is in places like the Dallas-Ft Worth metroplex, Houston, San Antonio, and Austin—all of which are in the central and eastern parts of Texas.

Pieniazek described getting started in renewables to meet the goals of the state’s RPS as a “chicken and egg” problem. Transmission providers were reluctant to design and build the infrastructure necessary to transport wind energy from remote areas to the loads if the wind generators weren’t going to show up; and the wind developers did not want to develop more wind plants until there was some certainty that  transmission would be built.

To reconcile the issue, the Texas Public Utility Commission established so-called Competitive Renewable Energy Zones (better known by the acronym CREZ). The CREZ process identified wind developers that had demonstrated financial commitment—that is, posted collateral, leased land, etc. Once there was sufficient financial commitment from wind developers, the PUC then would have an indication of the amount of transmission they would ultimately approve.

While the PUC was working on CREZ, Ercot developed transmission development scenarios for 12,000 to 25,000 MW of wind-energy transfer capability and commissioned GE Energy to study ancillary-service impacts to test the RTO’s ability to absorb such massive amounts of wind energy.

In summer 2008, the PUC selected Ercot’s 18,000-MW transmission option at an estimated cost of $5 billion. The planned build-out is being done in phases and in priority order. Targeted completion for all CREZ projects is yearend 2013. Based on results to date, Pieniazek thinks the project might cost more and take slightly longer than planned.

Wind is a high-profile energy resource in Texas. Ercot is investigating the viability of about 41,000 MW in its queue. There has been far less interest in solar in the region to date.

The speaker then confirmed what previous presenters had said about the unpredictable nature of wind and offered an overview of Texas’ renewables experience. Here are a couple of bullet points:

• Wind as a percentage of total energy resources in Ercot on a monthly basis varied in the first half of 2010 from a low of 6.8% in February to 12.1% in April. The highest percentage to date was recorded last June 12 when wind generation hit 7016 MW for one hour—15.8% of the load being served at that time.
• During Ercot’s peak-hour load of 64,805 MW on August 16, however, wind output was only 650 MW.

The big challenge to successful integration of variable renewable resources, Pieniazek said, was achieving the goals in a manner that (1) maintains system reliability, (2) ensures costs are assigned in a fair and non-discriminatory manner, and (3) does not undermine existing market structures. He made a special point about the importance of attempting to assign costs to those who create them—as much as possible. The proper alignment of incentives and/or costs increases market efficiencies.

There’s nothing like a major system disturbance to help focus attention on the challenges, Pieniazek continued. In February 2008, a dramatic variation in wind energy output and a significant deviation from submitted wind energy schedules did just that.

The risks to grid reliability associated with poor integration procedures are magnified in a region such as Ercot’s because there’s no interconnection with another major balance area for backup. Black-start resources must be well-maintained in Texas.

Pieniazek put up several slides to illustrate dispatch schedules for an actual spring week in 2009 and a projected spring week in 2013, based on a system model that assumes CREZ work will be completed and 18,000 MW of total wind generation will be commercial (Fig 12). While the timing probably is optimistic, the result is about the same whether it’s spring 2015 or later.

Looking at the chart, the NRG executive noted the deep back-down of coal-fired assets and said “this is a huge operational challenge,” adding that work is ongoing to ensure the grid will be able to accommodate such a scenario when it occurs.

The real world. Pieniazek updated the group on how Ercot has responded to the challenges of renewables integration encountered thus far, noting pitfalls to avoid and best practices to embrace. The RTO’s responses are grouped as follows:

• Dispatch/operational. (1) Congestion between West Texas and load centers has been chronic and Ercot operators often must reduce wind as necessary to maintain transmission equipment with rated limits. CREZ is expected to help here.

(2) The generation (MW) and prices offered by wind resources to curtail often are in negative territory because of zero fuel cost and production tax credits offsetting the payment to generate.

(3) Wind generators are limited in how fast they can respond when released from dispatch instructions to avoid frequency spikes.

• Forecasting. Ercot implemented a central, real-time forecasting system that uses site-specific meteorological data (wind speed and direction, temperature, barometric pressure) and wind-turbine availability information in its predictive model. All wind farms are required to use the forecast Ercot develops in their daily resource-plan submittals.
• Ancillary services. Ercot has modified its ancillary-service methodology by incorporating wind-forecast uncertainty into operational reserve requirements for non-spinning reserves (30-min availability) and frequency and regulation reserves (online and immediately available).
• System modeling. Ercot is working on improving the accuracy of its planning and real-time contingency analysis models. Pieniazek pointed out that the tools used to model a wind farm are not as well developed as they are for large thermal plants.
• System planning and interconnection standards. (1) Ercot has placed a renewed emphasis on managing its generator interconnection queue. Reason: Interconnection requirements have changed; those used in the pre-renewables era did not consider the operational challenges of wind generators.

(2) Wind farms now must provide voltage support and meet voltage ride-through requirements like other types of generation.

(3) Wind plants also must now provide primary frequency response.

Note that (2) and (3) are in line with Ercot’s goal of treating all market participants in a fair and non-discriminatory manner.

On-going work to facilitate renewables integration. As Pieniazek said at the beginning of his presentation, much progress has been made, but there’s still much more to do. Here’s a punch list of on-going work:

• Determine the impact of wind generation on system inertia to help dampen frequency oscillations; develop potential solutions.
• Develop ancillary-services cost allocations applicable to wind and other intermittent resources and determine if new ancillary services are needed.
• Evaluate the benefits and potential applications for energy storage.
• Investigate the potential benefits of a smart grid in facilitating integration of renewables and conventional resources.
• Study the electrical interactions between transmission lines and wind generators.
• Most importantly, perhaps, ensure that market design provides the proper incentives to install flexible backup generation. The idea here, Pieniazek said, was that if you’re going to impose a cost on the system that cost must be allocated back to you. Not an easy thing to do, he added.