Reliability Impacts of Climate Change Initiatives (RICCI): Technology Assessment

1. Reliability Impacts of Climate Change Initiatives (RICCI): Technology Assessment Mark Lauby Director of Reliability Assessment and Performance Analysis Preliminary Results – NOT FOR CITATION

2. About NERC: Mission • Develop & enforce reliability standards • Assess current and future reliability • Analyze system events & recommend improved practices • Encourage active participation by all stakeholders • Pursue mandatory standards in all areas of the interconnection To ensure the reliability of the North American bulk power system

3. Risk Matrix Higher Greenhouse Gas Regulations Transmission Siting Cyber Security Economy Issues Variable Generation Issues Workforce Issues Likelihood Smart Grid & AMI Reactive Power 1-5 Years 6-10 Years Energy Storage Consequence Lower Higher

4. 2010 Emerging Issue Risk Assessment Cross-industry communication and coordination is key to successful planning and operations

5. System: A Traditional View reliability reliability Conventional & Hydro Generation Demand Distribution Bulk Power System Over the past 60 years, we’ve divided the “grid” into two separate systems. Reliability requirements are different for each system.

6. System: A Traditional View reliability reliability Conventional & Hydro Generation Demand Local Drivers Policy Security Economic Regional Drivers Policy Security Economic Distribution Bulk Power System Policy and other drivers of development developed along the same line – factors that affected one system did not necessarily affect the other.

7. The System Begins to Change reliability reliability Demand Response Conventional & Hydro Generation Demand Energy Efficiency Nuclear Distribution Bulk Power System As new resources were added in the 1970’s and 80’s, bulk system reliability became more dependent on distribution-level assets like demand response and energy efficiency. This began to blur the line between the bulk power system and the distribution system.

8. The 21st Century Grid Emerges Plug-In Hybrid Electric Vehicles / Storage reliability reliability Wind & Variable Generation Demand Response CCS, Conventional & Hydro Generation Demand Energy Efficiency Nuclear Rooftop Solar / Local Wind Development Distribution Bulk Power System As we look to the future, new resources like rooftop solar panels, large-scale wind generation, PHEV’s, and storage will bring unique characteristics to the grid that must be understood and effectively managed to ensure reliable and cost-effective deployment. These new resources will be highly interdependent. Operational variability of large-scale wind generation can be effectively balanced by flexible resources like demand response, plug-in hybrids, and energy storage. Distributed variable generation will rely on conventional generation to ensure ancillary services and voltage and reactive support are available to maintain power quality. The development and successful integration of these resources will require the industry to break down traditional boundaries and take a holistic view of the system with reliability at its core.

9. The Smart Grid Plug-In Hybrid Electric Vehicles / Storage reliability Wind & Variable Generation Demand Response Conventional & Hydro Generation smart grid Demand Energy Efficiency Nuclear Rooftop Solar / Local Wind Development The “Smart Grid” completes the picture of a fully integrated system without boundaries. Stretching from synchro-phasors on the transmission system to smart appliances in the home, these systems will enable the visualization and control needed to maintain operational reliability.

10. Common Challenges Plug-In Hybrid Electric Vehicles / Storage reliability Wind & Variable Generation Demand Response CCS, Conventional & Hydro Generation smart grid Demand Energy Efficiency Nuclear cyber security Rooftop Solar / Local Wind Development Cyber security is one of the most important concerns for the 21st century grid and must be central to policy and strategy. The potential for an attacker to access the system extends from meter to generator.

11. Common Drivers Plug-In Hybrid Electric Vehicles / Storage reliability Wind & Variable Generation Demand Response CCS, Conventional & Hydro Generation “smart grid” Demand Energy Efficiency Nuclear cyber security Rooftop Solar / Local Wind Development Drivers Policy Security Economic Building the 21st century grid requires a comprehensive and coordinated approach to policy and resource development – looking at the grid as a whole, not as component parts.

12. The 21st Century Grid Plug-In Hybrid Electric Vehicles / Storage reliability Wind & Variable Generation Demand Response CCS, Conventional & Hydro Generation “smart grid” Demand Energy Efficiency Nuclear Rooftop Solar / Local Wind Development

13. Integration of Variable Generation

14. Keeping Reliability in the Balance • Bulk power system reliability must be maintained, regardless of the generation mix; • All generation must contribute to system reliability within their physical capabilities; and • Industry standards and criteria must be fair, transparent and performance-based.

15. New Renewable Capacity 2018 Variable Generation Capacity (Includes Existing, Future, and Conceptual Generation Resources 45,700 MW 49,039 MW 18,125 MW 12,392 MW 62,041 MW • 2,000 MW of Solar Generation 2,000 MW of Solar Generation Less than 2,000 MW of Solar Generation 2,000 MW of Wind Generation Less than 2,000 MW of Wind Generation 46,268 MW

16. Variable Fuels Must Be Used Where Available • Variable generation often located in areas remote from demand centers and existing transmission infrastructure Legend High Wind Availability Demand Centers

17. HighlightNew Renewable Capacity • 229 GW of additional installed wind capacity • 38 GW expected on-peak capacity • Expected on-peak capacity range from 0-37% of total installed capacity across different subregions 2018 Projected Wind On-Peak Capacity 2018 Projected Wind Installed Capacity

18. Sources of Flexibility Effective Variable Generation Integration

19. Enhancing System Flexibility • Additional flexible resources, such as demand response, plug-in hybrid electric vehicles, and energy storage may help balance steep “ramps” • Deploying complementary types of variable generation (e.g. wind and solar), leveraging fuel diversity over large geographic regions, and advanced control technologies show promise in managing unique operating characteristics • Greater access to larger pools of generation and demand may facilitate the large-scale integration of variable resources

20. HighlightDemand Response

21. Smart Grid

22. Components to the Intelligent Network – Many are focused in vertical silos Generation Circuit Transformers AMI Load Management Consumer Portal • Wind • Solar • Geothermal • Hydro • Biomass • Biofuels • Carbon capture • Nuclear • Carbon cap and trade • Storage technology • Capacitors • Capacitor Bank Monitoring • Predictive Maintenance • Security (Video/Audio) • Load Management • OMS/DMS • Broadband over Power Lines • Advanced SCADA • Mesh networks • Voltage Monitoring • Outage Detection • Theft Detection • Asset Failure Alarms • Smart substation • High Temperature Superconducting (HTS) Cables • Underground Transmission • HTS Transformers • Real-Time Metering • TOU/CPP Pricing • Outage Monitoring • Voltage Monitoring • Smart switch • Smart thermostat • Real-time DLC management and verification • Load profiling • Aggregation of curtailed load

23. The 21st Century Grid Plug-In Hybrid Electric Vehicles / Storage reliability Wind & Variable Generation Demand Response CCS, Conventional & Hydro Generation “smart grid” Demand Energy Efficiency Nuclear Rooftop Solar / Local Wind Development

24. Electric Power: Players, Drivers, Etc. ENVIRONMENT $ - FINANCE RELIABILITY POLICITAL REALITIES & OBJECTIVES REGULATORS ELECTRIC POWER CONSUMERS NATIONAL SECURITY SOCIAL CONCERNS ENGINEERING FEASIBILITY POWER INDUSTRY

25. Smart Grid – Everybody has a vision…

26. The Smart Grid and Reliability smart grid – The integration and application of real-time monitoring, advanced sensing, communications, analytics, and control, enabling the dynamic flow of both energy and information to accommodate existing and new forms of supply, delivery, and use in a secure, reliable, and efficient electric power system, from generation source to end-user.

27. Reliability Considerations Coordination of controls and protection systems Cyber security in planning, design, and operations Ability to maintain voltage and frequency control Disturbance ride-through (& intelligent reconnection) System inertia – maintaining system stability Modeling harmonics, frequency response, controls Device interconnection standards Increased reliance on distribution-level assets to meet bulk system reliability requirements

28. The Smart Grid Landscape CONCEPT increasing uncertainty HAN IFM SHN HTS DTM STORAGE CLiC PHEV SST RTR increasingmaturity Smart Appliances DG/DER WAM DSCADA FACTS PLC PMU DSTATCOM RTU AMI PLC DSM CFL IED STATCOM distribution BPS utility-scale generation end users NOTE: Placement of items in the plane above is for concept discussion purposes.

29. The Smart Grid Landscape NERC’s Reliability Standards apply to all users, owners, and operators of the bulk power system and typically apply to facilities at the transmission and generation level. HTS STORAGE CLiC RTR WAM FACTS PMU RTU PLC IED STATCOM Bulk Power System increasing uncertainty increasingmaturity distribution BPS utility-scale generation end users

30. The Smart Grid Landscape Smart Grid may provide both system benefits and reliability considerations to the distribution system and bulk power system. SYSTEM BENEFITS RELIABILITY CONSIDERATIONS Bulk Power System HAN IFM SHN DTM increasing uncertainty PHEV SST increasingmaturity Smart Appliances DG/DER DSCADA RTR PLC DSTATCOM AMI DSM CFL distribution BPS utility-scale generation end users

31. The Smart Grid Landscape The aggregate impacts of Smart Grid on the distribution system may impact the reliability of the bulk power system. Pass-through attacks from the distribution system may also present a threat to bulk power system reliability. AGGREGATE IMPACTS PASS-THROUGH ATTACKS Bulk Power System HAN IFM SHN DTM increasing uncertainty PHEV SST increasingmaturity Smart Appliances DG/DER DSCADA RTR PLC DSTATCOM AMI DSM CFL distribution BPS utility-scale generation end users

32. RICCI Results

33. RICCI Draft Report: Objective Reliability impacts of climate change initiatives: • Supply resource responses • Fuel mix changes and associated technologies • large-scale integration of smart grids, • integration of renewable, nuclear, and energy storage resources. • Scenario Framework Preliminary Results – NOT FOR CITATION

34. RICCI Draft Report: System Design North America’s network designed for: • Large, centralized coal-fired plants located at a distance from major load centers • Relatively controllable and constant generation • The unidirectional flow of electricity from large-scale plants to consumers • Management practices that focus on altering the supply of energy rather than demand Preliminary Results – NOT FOR CITATION

35. RICCI Draft Report: Basis for Assessment • Basis for Technology Assessment assumes emission reductions below 2005 base • 3% by 2012, • 17% by 2020, • 42% by 2030 • 83% by 2050 • 3 timeframes between the years 2010 – 2050 Horizon I: 1–10 yrs., Horizon II: 10–20 yrs., & Horizon III: 20+ yrs. • Outlines a systematic way to evaluate future pathways/scenarios. Preliminary Results – NOT FOR CITATION

36. RICCI Draft Report: Report Contents • Climate Change Initiatives in North America • Overview of Published Scenarios and Models • Scenario Framework and Classification • Reliability Assessment of Technologies • 3 time horizons • Generation & DSM, Transmission, Distribution • Conclusion and Recommendations Preliminary Results – NOT FOR CITATION

37. RICCI Draft Report: 20+ YearsGeneration and DSM Preliminary Results – NOT FOR CITATION

38. RICCI Draft Report: 20+ YearsTransmission Preliminary Results – NOT FOR CITATION

39. RICCI Draft Report: 20+ YearsDistribution Preliminary Results – NOT FOR CITATION

40. RICCI Draft Report: Scenario Framework Preliminary Results – NOT FOR CITATION

41. RICCI Draft Report: Key Observations • Regional solutions are needed to respond to climate change initiatives, driven by unique system characteristics and existing infrastructure. • Carbon reduction from increasing demand-side management must be balanced against potential reliability impacts. • The timing of carbon reduction targets will require an unprecedented shift in North America’s resource mix. • Climate change efforts that increasingly depend on distribution system options and applications can, in aggregate, impact bulk power system reliability. • The addition of new resources increases the need for transmission and energy storage and balancing resources. Preliminary Results – NOT FOR CITATION

42. RICCI: Recommendations Preliminary Results – NOT FOR CITATION

43. Tools and Actions for Mitigating Resource Adequacy Issues Advancing In-service Dates of Future or Conceptual Resources Addition of New Resources Not yet Proposed Increase in Transfers Increased Demand-Side Management and Conservation Early Action to Mitigate Severe Losses Developing or Exploring Newer Technologies Use of More Gas-Fired Generation Repowering of Coal-Fired Generation

44. RICCI Draft Report: Challenges • Meeting the carbon reduction goals: unprecedented changes in 1,000 GW resource mix. • Industry’s knowledge represents nearly a century of operational experience • A variety of demands on existing infrastructure will be made to support the transition. Preliminary Results – NOT FOR CITATION

45. Question & Answer Preliminary Results – NOT FOR CITATION