Electricity Infrastructure: Overview and Issues (2)

H. Scott Matthews

February 5, 2004

Admin IssuesHW #2 Out Today Semester Projects

Groups of 1 or 2 (max) Topic on managing infrastructure Pricing can be component but should have

higher-level, decision type model

Recap of Last LectureSource of energy changed dramatically

in 100 years in US Now mostly fuel for transport, elec all else Electricity still mostly fossil fuel dependent Nuclear / renewables still very limited

Electricity grid has developed as needed over time with changing requirements/demands affecting it

Interstate Commerce (IC) In early US history, states treated each other

like foreign countries Taxes, licensing, port restrictions, etc. States had their own agreements with foreign

countries (e.g. Britain) This activity was not in ‘spirit of Union’

Constitution gave Congress power to regulate IC (as well as foreign nations) Note regulate was intended to mean “make

uniform”

Electric “Utilities” (Utils) Electricity businesses eventually crossed jurisdictional

lines and became regulated Economies of scale - cheaper to have many users Regulated as “natural monopoly” Strategy was vertical integration (ownership of all local

pieces - generation, trans, dist) Started to interconnect - helps reliability, cost Easier to regulate, but hard to control price Recently USA decided to ‘deregulate’ and push for

wholesale markets to trade power End result: electricity sent over longer distances and

through more systems than originally designed for

System Statistics (End 2000) 127 million “customers” (all sectors)

Total electric power demand = 3500 TWh/yr Number of power plants

Non-utility: 6500 units, 208 GW (growing - dereg) Utility: 9350, 600 GW

154,000 miles of AC transmission lines 3,300 miles of DC transmission lines Next 10 yrs: 6% transmission (line-miles) growth,

but 20% capacity/demand growth Not a problem, if plants sited near demand But, of course, its not!

http://www.eia.doe.gov/oiaf/aeo/

Electric System Challenges Unique Instantaneous management of supply and

demand Imagine having built infrastructure that dynamically

reconfigured itself to get you to your destination efficiently, without delay

Maintain 60Hz frequency Passive Transmission

Few control valves Just open and close switches to dispatch transmission

lines

ImplicationsEvery action can affect everyone else

Need to coordinateCascading problemsNeed to be ready for next contingency

dominates design “what if” planning

Flows near speed of light - need to act fast

Diagram of U.S. Electric Power Grid Removed

Due to National Security Implications(Seriously!)

Blackout of November 9, 1965 By 1965, electricity part of everyday life Most of NE US (and Canada!) dark Sign that we were not managing well

Six days to realize source of problem 1 relay failed at station in Canada (Niagara Falls) Caused transmission line to go ‘open’ Caused series of cascading failures all the way back to New

York City Took only 15 minutes to blackout NE US

Caused people to rethink dependence Until then, power systems design geared around

‘isolation’ to prevent damage

As a Result of 1965 Blackout.. Consumers made contingency plans As did firms and large industrial users At high/policy levels, coordinating entities were formed to

manage North American Elec. Reliability Council (NERC) New York Power Pool (NYPP) Developed industry equipment standards Developed reserve gen. capacity Interconnection and reliability methods

Isolation had led to islands/points of failure Now we more heavily ‘network’ the system so there are

multiple paths for power to flow

NERC

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Voluntary organization to promote reliability Alternative to being regulated

Sets standards, collects data, etc. No longer sufficient after dereg.

Three majorinterconnectedpower systems in US that coordinateactions to keepreliability

Reliability ComponentsAdequacy

Does (projected) Supply = Demand? A long-term planning process

Security Robust system against failures (short-term)

NERC transitioning to have enforcement power to meet reliability

Electric Power ‘Jurisdiction’ FERC - Fed Energy Regulatory Comm.

Regulates trans/sale of energy and fuels Electricity : regulate bulk power

Oversees environmental issues Budget from fees to regulated firms

NERC (already done) Control Areas - fundamental entity (150)

Vary: PJM (50,000 MW) others 100 MW Regional Reliability Councils (10) Interconnects (3) Note State PUCs not mentioned

Deregulation Effects Transmission built primarily over 100 years by vertically

integrated utilities Originally built close to fuel supply Recap: at first only local transmission built Some interconnections built for reliability, relief Utils cooperated - in mutual best interest

Dereg. sought to lower elec prices by: Making capital available for new capacity Increasing efficiency of operations

Trans. grid ‘interstate’ for wholesale electricity But highway congestion just means delay Electric transmission congestion = lost energy!

Deregulation (cont.) Now > 50% of power sold wholesale first Congestion - demand & construction of new

generation not matched with new trans. Incentives to cooperated reduced

What happened in California? Depends! Imbalance in supply/demand - not much new supply

approved for construction, demand higher Big part of problem was faulty market design Lack of adequate transmission for competitive power to

come into market to ease prices 1996: FERC opened ‘wires’ to non-utilities

Basically opened market to competition

Energy Policy Act - 1992 1980s: electricity trading had taken off Act pushed trading: Gen & Trans competition Non-utils to have power plants By 1998: nonutils 13% market share

Called Independent Power Producers (IPP) Don’t forget regulatory process!

Congress : laws + authority, implementation : agencies FERC Order 888: encouraged ISOs

Independent System Operators Independent of commercial interests Could own no generation

Recent changes ISOs - Independent System Operators

Open and fair access to regional grid; non-discriminatory governance structure; facilitating wholesale electric rates; independent - don’t own gen/trans

1999: FERC Order - RTOs Regional transmission organizations

Factors for Transmission and Distribution Losses Location of generating plant and load connection points (how

close to demand) Types of connected loads Network configuration Voltage levels and voltage unbalance Dynamic factors (e.g. power factor, harmonics, control of

active and reactive power) Length of the lines - almost linear relationship Current in line - a square law relationship Design of lines, particularly the size, material and type of

cables California / US about 10%

Cost Issues Average electricity price 7 cents/kWh

Decreasing by new const and coal prices Expected demand growth 2%/yr til 2020 Transmission costs ~10% of total cost

Resulting bottlenecks cause short-term price increases and thus higher costs! Problem areas California, PJM, NY, New England $500M / yr in these areas alone

Management Metrics Capacity Margin = Generation/Demand Base load - min. amount electricity required

over a given time interval, at steady rate Peak load - max load requirement during a

given time interval Intermediate load - between base & peak

Energy Balance for Typical Coal Plant

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Energy Balance for Typical Coal Planthttp://www.energy.qld.gov.au/electricity/infosite/elec&env7/roleofenergy7_3/efficiencyinpowerstat/energylosses/energylosses.htm