Integration of Renewable Resources in California

1. Integration of Renewable Resourcesin California 2nd International Conference on Integration of Renewable and Distributed Energy Resources Presented by David Hawkins Lead Industry Relations Representative December 5, 2006 Napa, CA

2. The California ISO • A not-for-profit, public benefit corporation created by state statute • 5 member board appointed by the Governor and confirmed by State Senate • Regulated by FERC • Location of one of three Reliability Coordinators in the West FUNCTIONS • Operate the High Voltage Grid for 75% of California in a safe and reliable manner • Created to provide open and non-discriminatory access to the transmission grid • Maintain grid reliability by matching supply and demand in real time and meet WECC mandated power reserves • Recommend appropriate grid upgrades • Schedule and coordinate power plant and transmission lines coming out of service for maintenance

3. Grid Operations Key Roles • Scheduling of Power Transfers • Congestion Management • Grid Planning • Real-Time Dispatch • Other control area operator duties such as time error monitoring • Ancillary Services Management • Outage scheduling - Transmission & Generation • Regional & Reliability Coordination Ensure reliable operation of the grid:“keep the lights on”

4. Biomass - 864 MW Cogeneration - 6,109 2% Wind - 2,544 MW MW 5% 12% Geothermal - 1,505 Various - 507 MW MW 1% 3% Hydro - 9,759 MW 19% Thermal - 23,027 MW Nuclear - 4,450 MW 43% 8% Solar - 466 MW Peakers - 3,209 MW 1% 6% CAISO Control Area Generation by Technology (As of February 28, 2005 before de-rates for availability)

5. CAISO Operational Numbers Summer 2006 Peak Load was 50,270 Megawatts • 55,183megawatts of power plant capacity • 15,000market transactions per hour • 25,526circuit-miles of transmission lines • 30 millionpeople served • $2.7 billionannual billings • 230 billionkilowatt-hours of power delivered annually

6. California Summer 2006

7. California’s RPS Goals SB 1078 passed in 2002 establishes the State’s Renewable Portfolio Standard (RPS). • By the year 2010, 20% of electric energy to serve IOU customer loads must come from renewable resources. • By 2020, 33% of the energy should come from renewables • Renewable Resources include: • Wind • Solar • Geothermal • Biomass • Small hydro (less than 30 MW)

9. Wind Generation Issues • Selection of Suitable locations • Adequate wind • Reasonable distance from transmission • Acceptable to community • Time / Cost of transmission upgrades • Plant Costs (capital, energy, O&M) • Variability Impacts (ancillary services costs) • Finding buyers / contracts for energy • Environmental Considerations • Produces energy at night when not needed • Non-dispatchable; output cannot be adjusted by ISO dispatch instructions • Difficult to forecast beyond the next few hours

10. Wind Generation Regions in CA Total Installed Capacity = 2856 MW, October 2006 Solano County Cap. = 327 MW Tehachapi Mount./ Mojave Desert Cap. = 809 MW 5000 MWs on new Wind Generation Planned Altamont Pass Cap. = 1007 MW San Gorgonio Pass Cap. = 691 MW Pacheco Pass Cap. = 21 MW

11. Solar Power

13. CAISO Renewables Integration Program Primary Goal(s) / Objectives: • One of the ISO Corporate Goals for 2006 is to develop a program for supporting State policy regarding renewables. • This is a coordinated program to achieve the Corporate Goal to manage the integration of renewable resources into CAISO’s • Transmission planning • Markets, and • Operations • The objective is to support the State’s goal of 20% of customer load being served by renewable resources by the end of 2010 and 33% by 2020.

14. Transmission Planning Why is CAISO proposing 3rd Category for assessing transmission costs? • Current interconnection policies create barrier for the efficient development of renewable generation resources. • – Most economic means of renewable generation development is often not pursued due to combination of • – Renewable resources often located far from existing transmission grid and load • – Optimally sized expansion significantly exceeds the size of needed to support the initial generation development • – Generation developers not able to finance full cost of optimally sized facilities • The current requirement that the generation developer fund all interconnection facilities before interconnection imposes a high hurdle

15. Transmission Planning New Transmission for Location Constrained Resources • Concept similar to justifying new gas pipelines – “Open Season” process • Key Principles for Eligibility • Not a network facility or generator tie • New Transmission is required to access significant energy resource that is not transportable • Transmission will be under CAISO operational control • Must serve multiple power plants with non-transportable energy resource • Evaluated with prudent grid planning process – cost effective • Economic impact is limited – TAC rate impact limited to 5% over a 10-year period. • Demonstrated commercial interest from multiple generation developers

16. Three Proposed Transmission Projects

17. Tehachapi Project • A 500 kV transmission infrastructure in the Tehachapi wind generation area to interconnect developing wind generation in that area to the SCE (and the PG&E) transmission systems • Purpose: • Help California reach its RPS goals for the year 2010 and beyond • Facilitate access to wind resources in Tehachapi area • Improve the reliability of the CAISO South by mitigating congestion on Path 26 and offering new energy sources • Include reinforcements to the SCE system for additional flow on Path 26 as well as normal load growth in SCE area • Part of the transmission infrastructure may develop prior to full wind generation development • Project Sponsors: SCE • PG&E and wind generation developers play critical roles

18. Wind Variability: Power-System Operation Impacts • Regulation -- seconds to a few minutes -- similar to variations in customer demand • Load-following -- tens of minutes to a few hours -- demand follows predictable patterns, wind less so • Scheduling and commitment of generating units -- hours to several days -- wind forecasting capability? Supply-demand balance maintained instantaneously. Wind controlled by nature, not power-plant operators!

19. Wind VariabilityCan Increase Power System Operating Costs • Day-Ahead dispatch Notices to start up fossil fueled generation that is not needed in the Operating Day • Dispatch notices to quick start units to replace unexpected loss of energy from wind generation • Allocating extra load-following capability • Procurement of additional regulating capacity • Increased cycling operation • These are reflected in additional ancillary services costs

20. Major Tasks in CAISO Action Plan • Improve accuracy of Day Ahead Energy Forecasts for wind generators • Need accurateDay-Ahead forecastsfor procurement of Operating Reserves and Regulation Resources and generator start-up dispatch notices • Improve accuracy of Same Day Energy Forecasts for wind generators • Need accurate(5 & 2 hours in advance) forecasts and schedules for all Wind Generation Resources • Develop Ramp management strategies • Ramp forecasting tools for Real-Time Operations • Improve weather data available from WG areas • Develop ramp mitigation strategies • Develop new graphical displays for Real-Time Operators so they can anticipate WG Production

21. Major Tasks in CAISO Action Plan (cont.) • Develop strategies for mitigating over generation conditions • Link renewables forecasting with new market design • Upgrade the existing PIRP II Program • Treatment of Exports of Energy from WG in PIRP Program • Transmission Line Loading and overload mitigation strategy • Scheduling Imports and Exports of Renewables • Identify Information needed for Grid Operators • Identify Information needed for Market Operators • Analyze the Additional Regulation and Load Following Requirements with seasonality adjustment factors

22. 700 Each Day is a different color. 600 • Day 29 500 • Day 9 400 Megawatts • Day 5 • Day 26 300 • Average 200 100 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour Wind Generation in April 2005 Could you predict the energy production for this wind park?

23. CAISO Hour Ahead Forecast Tool Next step is the development of a Neural Network forecasting tool that provides 5 minute forecasts for the next 7 hours Forecast for next hour

24. Integration of Wind Generation with Markets • Day Ahead Market – November 2007 • Need for accurate day-ahead wind generation forecasts for hourly energy production and anticipated hourly ramps • Forecast Influences the procurement of Ancillary Services (Regulation and Operating Reserves) and accurate Day-Ahead Generation Dispatch notices for start-ups • Assess impact of wind generation schedules on transmission congestion (source to sink) • Real-time Operating Day and Operating Hour • Need for 5 hour ahead forecasts for accurate dispatch notices to quick start generators • T-270 min Dispatch Notice to Short Start units • T-75 min Hour Ahead market closes • All PIRP Wind Generation Schedules must be in • Strategies for Import and Export of Renewables (Wind Generation Energy) between Control Areas

25. Operational Issues • Regulation Resources • Impact on the amount of regulation up and down to be procured. • Supplemental Energy • Impact on the amount of that must be dispatched per hour. • Large Energy Ramps -both Up and Down • Lack of frequency response capability. • Off peak energy production • Wind generation is an primarily an off-peak energy resource and it has significantly reduced capacity for meeting afternoon peak loads. • Day Ahead and Hour ahead forecasts • Need accurate(5 & 2 hours in advance) forecasts and schedules for ALL Wind Generation Resources • Need accurateDay-Ahead forecastsfor procurement of Operating Reserves and Regulation Resources

26. Impact of a January Winter Storm Front

27. Forecasted Hourly Ramps for Added Wind Gen

28. Ramp Planning Tools • Ramp Up Issues • Ramp Forecasting tools - location, timeliness, data sharing • Doppler Radar - shows directions and speeds of the winds blowing around the raindrops, insects and other objects • Sodar (sonic detection and ranging) systems are used to remotely measure the vertical turbulence structure and the wind profile of the lower layer of the atmosphere. • Display of Ramp Forecasts to Grid Operator • Ramp Mitigation Strategies • Criteria for initiating ramp mitigation actions? • Calculation of hourly ramp limits for reliable operation • Analysis of transmission loading impacts • Formulation of dispatch notices for limiting of ramps • Procurement of additional regulation resources

29. Ramp Planning Tools • Ramp Down Issues • Ramp Mitigation Strategies • Require wind generators modify their operations to modify the speed of ramp down? • Deployment of energy storage technology. • Use of dispatchable loads, such as cutting of pumping loads for short periods, to allow other generation to ramp up • Use of quick start units to replace the lost energy • Increase amount of load following – supplemental energy dispatches and regulation resources for hours with large ramp downs. • Develop new graphical displays for Real-Time Operators so they can anticipate Wind Generation Ramps and Forecasted Energy Production

30. Conclusions • We need to start testing new forecasting tools now to validate the models and methodologies. • We need new methods to control the Wind Generation Ramps if we are going to accommodate 6000 to 8000 MWs of wind generation. • California will need a portfolio of generating resources that can ramp fast, have short start up and shut down times, and have fast governor response for frequency control. • The Regulation and Load Following burden to accommodate wind generation is not trivial but can be managed with good forecasting techniques and the right mixture of generation resources.

31. Any Questions? Thank you! CAISO Web Site: http://WWW.CAISO.COM