Monday, March 18, 2019

Overheard at RTO Insider/SAS ISO Summit

CARY, N.C. — Despite a late spring Nor’easter that closed airports and forced some speakers to participate via phone, dozens of RTO and ISO officials journeyed to SAS’ snow-free campus in North Carolina last week for a discussion on data and technology challenges. Here’s some of what we heard at the RTO Insider/SAS ISO Summit.

Duck Curve, Meet Armadillo Shell

The duck curve — which came out of California to describe the ramping challenge provided by solar resources — has since been adopted as a term by other regions, including ISO-NE. (See “New England’s Duck Curve,” Overheard at NECA Renewable Energy Conference.)

Kenon Ögleman, ERCOT | © RTO Insider

But not in Texas, if Kenan Ögelman, vice president of commercial operations for ERCOT, has his way. Texas, which has led the nation in wind development, is starting to make strides with solar as well.

So Ögelman is pitching an alternative description: an armadillo on its back. “The belly of the duck is the shell of the armadillo,” he explained.

As in California, solar generation stops just as demand is rising to its daily peak. But Texas’ width may make it a bit easier to manage the ramp. “Because most of our load centers are in the center and the east … of Texas, and most of the highest potential solar is in the west, we might be able to buy ourselves … an extra hour there potentially because Texas is so big.”

When solar is wanting to dispatch and use the grid, that isn’t necessarily overlapping with wind as much so there might be some … complementary ability to use the grid.”

California, meanwhile, will be releasing a new version of the duck curve soon, said Lorenzo Kristov, principal for market and infrastructure policy for CAISO.

The new curve is necessary, Kristov said, because solar has grown so fast that the duck curve is playing out four years ahead of projections.

“We actually hit 11,000 [MW] net load last year — that’s just below what we forecasted for 2020,” he said. “And we actually hit this very steep ramp — the 13,000 [MW] that was … the projection for 2020 — we hit it in December 2016.”

iso summit

Left to right: Tim Fairchild, SAS; Chris Hendrix, Walmart; Lorenzo Kristov, CAISO | © RTO Insider

The California Energy Commission’s 20-year forecast for rooftop solar adoption is updated every two years. “And invariably the forecast they did two years ago is way lower than the forecast when they revise it two years later,” Kristov said.

One other development: Peak demand is coming later in the day. “The solar starts to reduce the magnitude of the normal peak hours, leaving a residual peak that happens a little bit later because the air conditioning is still running, but the sun has now gone down,” he said.

RTOs, Retail Choice Help Walmart Meet Renewable Goals, Cut Costs

As Walmart’s director of markets and compliance, Chris Hendrix is charged with controlling energy costs while meeting the retail giant’s goal of obtaining half of its electricity needs from renewable power by 2025.

That has led the company to set up its own energy supply company to power its 4,500 Walmart and Sam’s Clubs locations in the U.S. It also has invested in more than 400 renewable generation projects, including wind in Texas and solar in California, Arizona, Massachusetts and Connecticut. “In ERCOT, about 30% of our load is [served by] wind. It’s going to grow over time,” Hendrix said, citing two projects under construction.

“Not only are we buying power, we’re also a market participant in all the ISOs. … We have a retail supply license in 11 states, plus the U.K. We just act like everybody else, your Direct Energy, your Constellations of the world. The only difference is … I don’t have a sales force and I don’t have customer parallel on the backside.” His customers are the store managers.

“Every single market, every single co-op, every single utility, we’re there. So we have a good cross-section of the U.S. markets,” he said. But only ISO/RTO markets and states with retail choice give him all the tools he needs to do his job, he said.

“The only way that we’re able to buy large-scale renewables is through an ISO,” he said. And ISOs and RTOs with retail choice provide transparent LMPs that allow price hedging.

“Where we run into problems is in parts of California, where we don’t have choice, [and] SPP [and] MISO, where we’re exposed to an average price. It may not even be a time-of-use price. … So that’s not really setting the right price signal for us to implement renewables or energy efficiency or demand response, because all I have is a flat price of 7 cents/kWh.”

Alberta Capacity Market to Create New Forecasting Challenge

Steven Everett, AESO | © Cassondra Wilson, SAS Institute Inc.

There will soon be one less energy-only market in North America. The Alberta Electric System Operator is planning to introduce a capacity market to ensure it has sufficient firm generation supply as the province seeks to add renewables and eliminate coal generation by 2030.

That means new challenges for Steven Everett, forecasting manager for AESO.

“Whether it’s two or three or five [years] — or however many years out our capacity market is — our load forecast will determine what will be the size of that market,” he said. “So there’s going to be new layers of scrutiny on that forecast.”

NYISO Teaching QA Staff Hacking Skills

No electricity conference is complete without a discussion of cybersecurity. Top technology officials from PJM and NYISO took part in a conversation with moderator Stu Bradley, vice president of SAS’ cyber business unit.

Jonathon Monken, senior director of system resiliency and strategic coordination for PJM, noted that an RTO’s challenge is different from that of utilities.

“We are very, very [information technology] heavy. We have a very small amount of physical infrastructure at PJM and a massive IT infrastructure. What that means … is that the attack surface area is significant. It’s huge.”

NYISO Executive Vice President Rich Dewey, who oversees operations, markets and information technology, said the ISO is spending more on training to enhance its defenses and address the shortage of IT security experts.

Rich Dewey, NYISO (left), Stu Bradley, SAS | © RTO Insider

“Typically in the energy space, 5% of your IT budget is kind of the norm [for training]. … We actually spend probably a higher percentage of our budget on training in the security space. We look at it from two areas: One is trying to close that skill gap of trying to find qualified individuals on the market. There’s not a lot of them.”

The ISO also is training some of its quality assurance team, which tests software before it is put into production, “how to hack,” Dewey said.

“Every time we’re getting ready to put a new piece of software into production, they try to break into it. They try to go through the standard list of the most well-known vulnerabilities and try to see if they can actually get into the system and compromise the security of the system.

“It’s been kind of eye-opening. … We’ve taken delivery of production-ready software. We set it up in our QA environment, we let our QA guys loose on it and before you know it we’ve discovered five or six vulnerabilities — pretty common vulnerabilities — that they didn’t even realize that their own software had. And we work with them to patch those [holes].”

Monken said the electric industry is working with the Defense Advanced Research Projects Agency (DARPA) on a “rapid attack detection and characterization system” for industrial control systems. “That’s something that [the Defense Department] has the money and time to invest in because they see it as a threat factor for national defense. It might not be a tool that we use with great frequency, but being able to provide some tactical expertise from the industry side to the development side tool is something that has significant benefits to us later on as that moves past the prototype stage and into something that can be utilized in the industry.”

Tips for Winning Regulatory Change

ToNola Brown-Bland, NCUC | © RTO Insider

North Carolina Utilities Commissioner ToNola Brown-Bland said those seeking regulatory changes to accommodate new technologies should consult with regulators to seek tailored solutions.

“The lawyers in the room and the regulators don’t want to be ‘No.’ We want to help get to ‘Yes.’ But … the current regulatory regime [has] served us very well. … You don’t necessarily want to throw it [all] out.”

Solar for All: San Antonio’s Strategy

Tim Fairchild, director of SAS’ Global Energy Practice, asked CAISO’s Kristov how to make solar more than what Microsoft founder Bill Gates has termed “a toy for rich people.”

“There are a lot of things that don’t make sense from a societal perspective, one of them being the incentive to size your solar installation to the needs of your house,” responded Kristov. “Many houses have shade trees. We don’t want you to cut down shade trees to put on solar panels. But if you have sunny rooftops, why not make those a resource for the entire community, sized to the maximum size you want, and sell the excess?”

That’s the approach San Antonio’s municipal utility has taken. “Essentially, they viewed all sunny rooftops as an asset and they paid for the solar panels — paid rent in the form of a per-kilowatt-hour [fee] to the residents of the house. And then all the energy generated just became part of the supply resource portfolio of the utility.”


Although California was the first state to mandate utilities obtain energy storage, the “value stack” compensation method for DER is still a “work in progress” at the state Public Utilities Commission, according to Kristov. New York regulators this month introduced the “value stack” concept to replace net metering for distributed energy resources. (See NYPSC Adopts ‘Value Stack’ Rate Structure for DER.)

Ralph Masiello, Quanta | © Cassondra Wilson, SAS Institute Inc.

“If [storage is used] for peak shaving and capacity deferral on a distribution feeder — to put off the day when you upgrade the conductors — you need to be able to use it off-peak on something else to get a little extra funding for it,” said Ralph Masiello, senior vice president of Quanta Technology. “You see that in study after study. One or 2 or 3% of the feeders can be justified on capacity deferral alone. But if you can do the capacity deferral plus time arbitrage year-round — even when you’re not overloaded — then the economics improve to 10% of the feeders or more.

Meanwhile, “storage is on a declining cost curve, as PV was, and it will become more and more attractive for more applications. Today we’re adding storage to the market models in an incremental fashion — not changing the paradigms; making it look like a generator. But if we thought more broadly and towards the future when it was cheaper and more plentiful, this needs to be part of a capacity planning exercise. Ask the question: How much storage is good, is right, for a given market?”

Kiran Kumaraswamy, market development director for AES, foresees storage displacing peaking plants with 4 to 5% capacity factors. “Based on what we’re seeing in the solar space, I think there’s going to be utility-scale storage and there’s going to be consumer storage as well,” he said. “Exactly to what level it’s going to happen in the future is anybody’s guess.”

Plug for EIA

The Trump administration’s proposed federal budget announced last week would cut the Department of Energy’s spending by 6%. Chuck Newton, president of Newton-Evans Research, said it is essential that the department protect its Energy Information Administration. “It’s very important that we give good data to Congress,” he said. EIA “has to continue in place.”

– Rich Heidorn Jr.

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