September 12, 2013

1. Distributed Generation + Intelligent Grid (DG+IG) Enhances System Reliability & Efficiency Stephanie Wang Regulatory Policy Director Clean Coalition Steph@Clean-Coalition.org www.Clean-Coalition.org September 12, 2013

2. Contents of DG+IG Presentation

3. Overview of Grid Support Services Grid support services enable the reliable operation of electric grid systems.

4. Overview of Grid Support Services Balancing power supply and demand Source: Oak Ridge National Laboratory (2004) A number of studies, however, suggest that, as intermittent renewables become a larger presence in U.S. electricity generation, that 1% requirement will grow. Control voltage with reactive power

5. DG+IG Enhances System Efficiency & Reliability

6. Distributed Advanced Inverters Balance Voltage per unit voltage “Reactive power supply is the key controller of voltage in alternating current (AC) power systems. Reactive power supplied locally could be a major player in improving system reliability as well as improving system efficiency.” Oak Ridge National Laboratory (2008) Advanced inverters locally absorb reactive power sec Advanced inverters locally supply reactive power

7. DG+IG Core Solutions for Voltage Regulation

8. Distributed Voltage Regulation – Location Matters • Benefits of distributed voltage regulation: • Enhances system reliability by providing reactive power where needed • Improves system efficiency by avoiding line losses and reducing congestion • Oak Ridge National Laboratory (2008) Efficient & reliable reactivepower (Advanced Inverters)

9. Distributed Voltage Regulation – Location Matters • “The old adage is that reactive power does not travel well.” • Oak Ridge National Laboratory (2008) T&D lines absorb 8-20x more reactive power than real power. Prevent Blackouts: When a transmission path is lost, remaining lines are heavily loaded and losses are higher. Source: Oak Ridge National Laboratory (2008)

10. Advanced Inverters Keep Voltage in Balance • An inverter converts direct current (DC) to alternating current (AC) power. • Advanced inverters from Germany to State of Georgia have been programmed to deliver reactive power. • Proposed changes to IEEE 1547a and UL standards will allow advanced inverters to provide reactive power for voltage regulation in California. Source: EPRI(2011)

11. Advanced Inverters – Voltage Ride Through U.S. standards require inverters to automatically disconnect from the grid during any voltage event. Proposed changes to IEEE 1547a in California would allow ride through, enhancing system resilience. Enhanced Ride Through Source: CPUC Advanced Inverters Working Group, SCE Comments, 2013

12. Advanced Inverters – Reactive Power Advanced Inverter at 0.9 Power Factor = 43.6% reactive power REACTIVE (Q) P: Real power (kW) Q: Reactive power (kVAr) S: Total power (kVA) S 100% Q 43.6% REAL (P) 100 kW solar PV AC power 100 kVA inverter capacity 0.9power factor 43.6 kVArreactive power 90 kW real power P 90% Standard-sized inverter: Diverts up to 10% solar capacity to provision reactive power

13. Advanced Inverters – Reactive Power (Oversized) REACTIVE (Q) P: Real power (kW) Q: Reactive power (kVAr) S: Total power (kVA) S 110% 100 kW solar PVAC power 110 kVA inverter capacity 0.9 power factor 45.8 kVArreactive power 100 kW real power Q 45.8% REAL (P) P 100% • Oversized inverter: • No reduction of PV real power • Draws up to 10 kW real power from the grid • Provides reactive power 24/7/365

14. Advanced Inverters – Costs for Producers Cost = (Oversized Inverter) - (Standard Inverter) An example: 10 kW PV system Located in SF ($0.149/kWhr) Peak over 2 hours, PF = 0.9 Lose $109/kVAr-yr Oversize Inverter Lose Peak Real Power • An example: • 10 kW PV system • 11 kW Inverter • Cost = $113.5/kW • Produce PF = 0.9 • Produce 1.2 kVAr • Cost $1.2/kVAr-yr UC Berkeley (2013)

15. Energy Storage Keeps Voltage in Balance • Storage can perform all voltage regulation functions: • In addition to provisioning real power, generally paired with advanced inverters that can provision reactive power • Batteries and flywheels can react automatically within fractions of a second Photos: CESA (2013)

16. Conservation Voltage Reduction 120 Volts vs. 117 Volts = 2.5% drop in power usage Potential to reduce total system power usage by up to 3% Pacific Northwest National Laboratory (2010)

17. DG+IG Enhances System Efficiency & Reliability

18. DG+IG Balances Power & Frequency Source: NERC (2011)

19. Frequency Regulation Capacity Requirements Navigant / Pike Research projects that U.S. frequency regulation capacity requirements will increase. In 2011, assets that provide frequency regulation amounted to about 1% of peak load.

20. DG+IG Solutions for Balancing Power & Frequency

21. DG+IG Keeps Power in Balance DR, ES shifts load ES, Auto-DR, Curtailment for ramping DR, ES shifts load

22. Power Balancing – Location Matters • Benefits of distributed power balancing: • Avoids line losses • Reduces congestion of T&D lines Efficient power balancing

23. DG+IG: Fast & Accurate Frequency Regulation Flywheel Storage Conventional Spinning Generator Storage provides both supply and demand Faster and more accurate regulation = less MW required FERC Order 784 (July 2013) requires transmission providersto consider “speed and accuracy” when determining reserve requirements for frequency response and regulation. Source: Beacon Power (2011)

24. Proactive Curtailment for Ramp Control • For an individual variable generation system, reduce output to control ramp down when there’s a forecasted reduction in solar/wind resources, and limit output to control ramp up. • Puerto Rico requirement – no more than 10% of nameplate can change within 1 minute. Forecastsystem detects cloud edge moving toward PV installation and prepares curtailment order Start curtailment ramp down Start curtailment ramp up Minutes Source: Clean Coalition (2013)

25. Proactive Curtailment for Ramp Control (Cont’d) • Cost Considerations • Proactive curtailment is less expensive for solar project owners than investing in storage in some situations. • Proactive ramp down requires MC2 equipment – must be able to monitor and forecast resource reduction, communicate between equipment at the site, and control ramp up and down. • Some utilities may claim that weather monitoring equipment will be expensive • SMUD concluded that monitoring can be done with inexpensive solar battery systems generally used for grid communications.

26. Frequency Response is a Regional Issue Western Electricity Coordinating Council (WECC) Each ISO must provide a certain amount of real power to respond to the sudden loss of a large generator or transmission line within the region. California Independent System Operator (CAISO)

27. Frequency Response – CAISO Obligations Less than 10 seconds to respond CAISO contribution ~650 MW Source: California ISO Frequency Response Study by General Electric (November 2011)

28. Solutions for Frequency Response

29. DG+IG Enhances System Efficiency & Reliability

30. Joint Taskforce Plan for Replacing SONGS / OTC • Joint Taskforce (CPUC, CEC, CAISO) Preliminary Reliability Plan (Sept 2013) • Issues: • Replace SONGS and ~5000 MW of retiring Once-Through-Cooling Plants • Address load growth in target areas through 2022 • Solutions: • Meet 50% of needs with 3,250 MW of local preferred resources (energy efficiency, demand response, renewables, combined heat and power, storage) • Meet 50% of needs with transmission upgrades (including voltage support) and 3,000 MW of conventional generation Source: CPUC July 15, 2013

31. Replace SONGS with IG Solutions • Clean Coalition Solutions: • Recognize the full potential of local preferred resources. • Plan assumes low capacity factor for demand response. CPUC should set realistic but ambitious demand response targets. • Plan does not include use of advanced inverters to provision reactive power. CPUC should develop pilot project for Southern California. • Maximize use of local preferred resources. • 50% limitation on local preferred resources is arbitrary, based on outdated assumptions about the potential of local preferred resources, and not in compliance with the Loading Order. • Southern California Edison’s Living Pilot should be a showcase for using local preferred resources to meet grid reliability needs. • Policy Forums: • CPUC Long Term Procurement Plan Track 4 (SONGS) • CPUC SCE Living Pilot • CEC Integrated Energy Policy Report • CPUC Demand Response

32. Replace SONGS – Demand Response California must implement FERC Order 745 and greatly expand use of demand response. PJM was the first grid operator to comply with Order 745, and now demand response bids into PJM markets and responds like a generator.

33. Replace SONGS – Solar Potential • SMUD installed 100 MW of local solar in just 2 years. • Equivalent to 2.5 GW of local solar if a similar program were extended across the entire state. Eric Garcetti committed to 1,200 MW of local solar within LA city limits by 2016

34. Replace SONGS – Solar PV + Advanced Inverters vs. Huntington Beach 290 MVars (minus line losses = 261 MVars) 570 MW of local solar with advanced inverters, oversized by 10% set at 0.9 Power Factor = 261 MVArs

35. Replace SONGS – Energy Storage Potential Targets set by CPUC include 745 MW storage in Southern California