Sioshansi F.P. Smart Grid: Integrating Renewable, Distributed & Efficient Energy
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By virtue of our unique position as the grid and market
operator and the planner of new transmission infrastructure
(see boxes below), the CAISO is situated at the nexus
between, on the one hand, the panoply of emerging
technologies and their wide-ranging potential applications,
and on the other hand, the detailed, practical needs of
operating the grid, planning grid expansion, connecting new
resources, and enabling their participation in the spot markets
under an environmental policy program that is dramatically
altering the makeup of the supply fleet. Thus, the CAISO is in
a central position to identify the most promising linkages
between capabilities and needs, and to facilitate their
implementation through changes to our rules and practices.
California ISO by the Numbers
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Although the subject of this chapter is the CAISO's vision and
roadmap for smart grid, the reader should view this as part of
a much broader strategic framework for navigating and
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shaping industry evolution over the next decade. In order to
best use our unique position to facilitate and influence the
coming changes for the benefit of California consumers and
power industry participants, for the past few years the CAISO
has been engaged in strategic visioning and action planning
efforts both within our organization and in collaboration with
the state agencies and policy makers that have energy-related
responsibilities.
Pursuant to our own 10-year strategic framework, the CAISO
has already made major revisions to our transmission
planning and new generator interconnection processes to
better align with the environmental policy and technology
drivers of change.
1
In addition, we have a current initiative
with our stakeholders to design spot market changes to
address the many operational and commercial challenges
related to renewable integration and the participation of new
technologies. We have also performed several innovative
studies to quantify the impacts on grid operation and market
outcomes of the increased participation of variable renewable
resources. In 2010 we completed a study based on grid
conditions with 20% renewable energy,
2
and are nearing
completion of a study focusing on 33% renewable energy by
the year 2020, which is now a state legislative mandate. The
CAISO is also working with participating transmission
owners and the Western Electricity Coordinating Council
(WECC) on installing advanced monitoring devices called
synchrophasors that will greatly improve visibility to the
status of the CAISO grid and the entire western
interconnection. Most notably, at the end of 2010 the CAISO
moved into a new home, custom-built for the CAISO to meet
the highest green building standards and housing the country's
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most advanced control center for monitoring and reliably
operating the grid with a renewable-rich supply fleet.
1
Documentation of the CAISO's revised transmission planning process
can be found at http://www.caiso.com/242a/242abe1517440 html.
Documentation of the CAISO's 2010 enhancements to its generation
interconnection procedures can be found at http://www.caiso.com/275e/
275ed48c685e0 html.
2
The CAISO's 20% integration study is posted at http://www.caiso.com/
23bb/23bbc01d7bd0 html.
As further described in the CAISO's 2010 Smart Grid
Roadmap and Architecture,
3
the CAISO envisions
California's transmission grid in the year 2020 to be brimming
with efficient, clean wind and solar energy that responds to
grid operator instructions and dependably contributes to
system reliability. The CAISO is working closely with policy
makers and industry participants to foster the development of
the smart devices, software systems, and market rules and
policies needed for grid evolution. This surge of innovation is
driven by California's energy and environmental policy goals,
as highlighted in Figure 6.1, which include a legislative
mandate to procure 33% of the state's retail electricity needs
from renewable sources by 2020, promoting energy
efficiency, increasing levels of distributed generation, and
reducing greenhouse gas emission levels to 1990 levels.
3
http://www.caiso.com/2860/2860b3d3db00.pdf.
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Figure 6.1
Key smart grid drivers for CAISO.
Source: California ISO, Smart Grid Roadmap and Architecture, December 2010
Among its main features, the 2020 grid and spot markets will
enable full participation by various types of storage
technologies. These devices will store or discharge energy at
appropriate times, thereby firming up the variability of
renewable resources and shifting renewable energy supply to
more useful time periods. Storage could, if developed as
hoped, supply ancillary services products such as regulation,
which is critical for maintaining system frequency within very
narrow limits, perhaps even more effectively than
conventional resources. Another feature of the transmission
grid and spot markets made possible by smart grid
technologies is the everyday use of demand response and
broad participation of price-responsive demand, a topic
discussed in several other chapters in this volume. Smart
technologies are expected to empower residential and
commercial consumers by providing them the timely
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information they need to manage their energy use, for
example by shifting it to times when supply conditions and
prices are most favorable. The CAISO continues to be a
strong advocate of consumer empowerment through smart
devices, because as the grid operator we fully understand that
delaying the implementation of these technologies will likely
result in further reliance on conventional fossil-fuel
generation to balance renewable variable generation, which
would be contrary to the goal of diversifying our generation
fuels and increasing the renewable energy share of
consumption.
4
4
Documentation of several CAISO activities in the area of demand
response can be found at http://www.caiso.com/1893/
1893e350393b0 html.
California's modern grid will leverage existing technologies,
such as synchrophasors, to perform at its peak capabilities.
Up until now, synchrophasor data had been used for offline
analysis, but in the smart grid it will be used for near
real-time on-line monitoring and possibly for control. New
technologies including smart meters and smart substations
will help the local distribution systems, owned and operated
by utilities, to match the sophistication of the high-voltage
transmission system. These specialized devices could
communicate demand levels, output from distributed
generation, and system conditions that the CAISO will need
to monitor to manage a grid that is more complex than ever
before. The result will be a thriving electricity sector that is
competitive and efficient—all to the benefit of our wholesale
customers and ultimately to retail consumers.
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The CAISO is also actively pursuing initiatives that will
determine system impacts and needs under different levels of
renewable resources and different mixes of resource types, as
well as changes to load levels and patterns that will likely
occur as Californians purchase substantial numbers of hybrid
and all-electric vehicles. A recently published CAISO report
on integrating renewable resources provides operational
requirements and generation fleet capability under a 20%
renewables portfolio mix,
5
while forthcoming studies will
characterize system conditions and operating requirements
under a 33% renewables energy standard.
5
California ISO, Integration of Renewable Resources—Operational
Requirements and Generation Fleet Capability at 20% RPS, August 31,
2010, available at http://www.caiso.com/2804/2804d036401f0.pdf.
There is no question that the rapid pace of new technology
development and the increasing impact of environmental
policies will change the power industry in ways that cannot be
fully predicted at this time. The direction of change is quite
clear, however, as are many of the major challenges, so the
CAISO will continue to develop and adopt the best new
applications and devices that will enable our operators to
better monitor and manage the real-time grid, both within our
own balancing area and in coordination with our neighbors
and the entire western interconnection. Smart grid
infrastructure will be at the heart of these innovations.
In the following sections, we first describe the operational
challenges associated with integrating large quantities of
variable renewable generation into the grid, which the CAISO
has identified and begun to assess quantitatively through its
integration studies. Smart grid technologies will play a
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significant role in enabling grid operators to maintain
reliability in the face of these challenges. We then identify the
objectives and the major domains of activity of the CAISO's
smart grid program, including advanced forecasting and grid
monitoring, demand response, distributed energy resources,
storage devices, and cyber security. We then provide more
in-depth sections on each of these areas. At the end we
provide a key to frequently used smart grid and related
acronyms.
Operational Challenges and Market Impacts of
Renewable Integration
On April 12, 2011, Governor Jerry Brown signed legislation
adopting a target of 33% renewable energy by 2020, the most
aggressive renewables portfolio standard in the United States.
In doing so Governor Brown clarified that, “While reaching a
33% renewables portfolio standard will be an important
milestone, it is really just a starting point—a floor, not a
ceiling. With the amount of renewable resources coming
on-line, and prices dropping, I think 40%, at reasonable cost,
is well within our grasp in the near future.” Well before this
new legislation was adopted, California had legislation
mandating a 20% renewables standard, and an executive
order by former Governor Arnold Schwarzenegger mandating
33% renewables by 2020. As a result, the CAISO had begun
studying the implications of and preparing for these targets
for several years before the new legislation was signed.
The operational challenge with variable renewable resources
such as wind and solar resources is to maintain constant
balance between supply and demand, given the inherent
variability and unpredictability of wind and solar output.
6
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The expected expansion of these types of capacity on the grid
requires the industry to review and revise its operational tools
and practices for maintaining system energy balance, and to
develop new market products and market rules for procuring,
compensating, and allocating the costs of the required
balancing services. This section describes some of the
technical challenges the CAISO has been assessing through
its renewable integration studies, and identifies the promising
approaches for meeting these challenges, focusing
particularly on the potential benefits of smart grid
technologies.
6
Variability in this context refers to the propensity of the output of
variable renewable resources to change dramatically within intervals of
minutes or even seconds, whereas uncertainty refers to the distribution of
forecast errors associated with predicting average renewable output over
a specific future time interval, even when such forecasting is done as
little as five to ten minutes ahead of the target interval. From the
operational perspective, variability affects the need for regulation
service, whereas uncertainty requires the CAISO to ensure that sufficient
dispatchable capacity is available to respond to five-minute dispatch
instructions.
In addition to operating its own balancing authority areas, the
CAISO is also electrically interconnected and synchronized to
other balancing authority areas in the Western Electricity
Coordinating Council or WECC. Therefore the CAISO, as a
balancing authority area that relies heavily on import and
export flows, must maintain its net interchange with each of
its neighbors as part of maintaining energy balance within its
own system.
The net interchange is the amount of scheduled net imports
from and exports to neighboring balancing authority areas.
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• When the CAISO is a net importer, it is generating less
energy from resources within its area than its demand
requires and making up the difference from other balancing
authority areas.
• When the CAISO is a net exporter, it is generating more
than its demand requires, and its extra energy is meeting
the demand of other balancing authority areas that are
importing from the CAISO.
If the CAISO is not able to balance its system due to the
variability of its supply resources, it will cause the frequency
of the interconnection to fall or rise and will result in
inadvertent transfers from other balancing authority areas in
the interconnection as others attempt to return to balance and
maintain frequency. Leaning on one's neighbors in this way
also creates energy accounting issues between balancing
authority areas.
Not maintaining balance under normal conditions causes
devices that are synchronized to the frequency of the system
to operate slower or faster, depending on whether there is
excess demand or excess supply, respectively. In more
extreme situations, if the system slows down too much, there
is a risk of load shedding, whereas if the system frequency is
too fast there is risk of damage to generation equipment and
tripping of generation. Figure 6.2 illustrates using a simple
water flow analogy the balancing of generation and load.
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