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7/29/2014
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Helping to keep the lights on,
businesses running and communities strong®
Preliminary
Wisconsin Public Utility Institute
ENERGY UTILITY BASICS
Systems within the Electric Utility Business
Generation – Transmission – Distribution -
Consumption
RTOs and Markets
Ken Copp
July 31, 2014
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SOURCE Generating Plant
CONSUMER
Transmission
System
Distribution
System
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Wisconsin Public Utility Institute
Basics …
• Generation is the production of electric
energy in a form which can be transported to
be used elsewhere (near or far) by people.
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Generation … Energy Conversion
• Electric energy for human use is converted
from another form
– Batteries produce electricity from a reaction
between different chemicals
– Solar cells produce electricity by changing light
energy from the sun into electricity
– Fuel cells convert chemical energy directly to
electricity, like batteries with a constant supply of
new chemicals to react with each other
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Generation … Energy Conversion
• Prime mover generators use machines
which rotate coils of wire through magnetic
fields to convert mechanical energy to
electrical energy
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Generation …
• Prime mover generators include:
– Wind turbines
– Water turbines
– Steam turbines
– Gas (combustion) turbines
• Simple Cycle
• Combined Cycle
– Internal combustion engines
• Prime mover generators provide most of the
electricity we use
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Electricity …
• Electricity is a physical phenomenon in
which an electric field exerts a physical force
on charged particles of matter, causing them
to move when they are not somehow
constrained
• Lightning is an unconstrained example of
electricity; an electric field between cloud
and ground causes charged particles to
move in great amounts and at high speed.
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Electricity …
• An electric power system provides a
controlled, constrained pathway for electricity
to be safely generated, transmitted over
large or small distances, and utilized by
consumers
• The measure of electric field strength in an
electric power system is the volt (V)
• The measure of electric current – the flow of
charged particles within the system – is the
ampere (A)
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Electricity …
• Power is a measure of energy transfer
• Electric power is measured in watts
• One ampere flowing under a voltage of one
volt represents one watt (W); a thousand
watts is a kilowatt
• The energy represented by one watt flowing
for one hour is one watt-hour; the typical unit
used in the electric industry is thousands of
watt-hours, or “kilowatt-hours”
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Heroes …
• Electro-physicists and Electrical Engineers
celebrate their heroes by naming physical
quantities after them
– Ampere: Andre-Marie Ampere developed the
theory of electrodynamics/electromagnetism
(France)
– Volt: Count Allesandro Volta invented the
electrochemical pile[(battery] (Italy)
– Watt: James Watt developed the condensing
steam engine (Britain)
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Pleasant Prairie Power Plant
(Coal)
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Kewaunee Nuclear Plant
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Port Washington
(Combined Cycle
Natural Gas) www.atcllc.com
Big Q Generating Plant
(Hydro)
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Where Do You Find Solar
Arrays?
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California
Arizona Nevada
New Mexico
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Where Do You Find Solar Arrays?
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Duluth, MN
At Church (New Jersey) Shropshire, England
Warren, Michigan
Anywhere
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Basics …
• Transmission is the movement of electric
energy from a source (generator) location to
a location where the energy can be
distributed to multiple end-users
(customers).
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Basics …
• Distribution is the movement of electric
energy from central delivery points to the
points of end-use consumption – where
people convert the electric energy to other
forms
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Basics …
• Network or Radial?
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Basics …
• Loop Flows, Counter Flows
Gen 1
Gen 2
Gen 3
Load
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Basics … • Physics and Economics
– Locational Market Prices (LMP)
Gen 1
Gen 2
Gen 3
Load
GEN #1 200MW @ $30/MWH
GEN #2 500MW @ $20/MWH
GEN#3 100MW @ $100/MWH
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Lattice 345kV Dbl Cir
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Steel pole 138 kV double circuit
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138 kV H frame structure
Shield wires intercept
lightning strikes
Phase conductors;
always 3 per circuit
Aerial patrol structure
identification number
(yellow tag)
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Wood Pole 69kV & Dist Davit Arm
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Typical 138 kV suspension insulators
Suspension insulator
Vibration damper
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138 kV vertical break disconnect switch in the closed position.
Disconnects are usually manually operated and used to isolate
pieces of equipment from the transmission system for visual
verification that a piece of equipment is safe to work on.
Disconnect
switches
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138 kV vertical break disconnect switch in the open position. Disconnects are usually manually
operated and used to isolate pieces of equipment from the transmission system for visual verification
that a piece of equipment is safe to work on.
Disconnect
switches
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345 kV Oil Circuit Breaker.
Three tank design where circuit
interruption for each phase is in
a separate tank.
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345 kV SF6 gas, live tank with ganged operation. There is only one operator for the three poles, so
they all operate together. Circuit interruption takes place in the large tank on top of the porcelain
column. This tank is at system voltage, hence the phrase live tank. External-mounted, free-standing
CTs (current transformers) are used for relaying.
Live
tank
Current
transformer
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345 kV/138 kV
Transformers
SUBSTATION
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Pole with Transformer
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Padmount TransformerPadmount Transformer
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Basics …
• [Consumption] is the conversion of electric
energy to a different, useful form such as
heat, light, radio waves, or mechanical work,
by end-users for their own benefit
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[Consumption] … • The electricity customer drives everything
• The pattern of combined electricity use of all
the customers connected to a system
determines the amount and types of
generators, transmission lines and
distribution systems required to reliably
serve those customers
• Customer behavior interacts with utility
planning and programs to influence
investment and cost of electric service
• What happens when you flip the switch?
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Operations …
• When you flip the switch, your usage impacts
the system.
• All generators and motors across the
interconnected transmission and distribution
systems slow down imperceptibly
• Their control systems react to restore the
frequency of rotation to 60 Hertz or cycles
per second
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What is demand/load?
• Every time you turn on a light, air conditioner, electric stove, the
transmission grid responds to that demand instantaneously
• The “load” – the amount that is demanded each instant –
changes constantly but traditionally has had the following shape
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Potential Future Demand and
Generation Patterns
48
Utilities, transmission owners and grid operators are concerned about
going from this load shape to this load shape and still keep the lights on.
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Markets
• Roles of Systems in Markets
– Generators compete for customers
– Transmission connects customer areas to distant
generation options
• Federal Tariffs (FERC) govern access to transmission
service and the terms of payment for use of the
transmission system
– Distribution is local and not involved in markets
• Very important for reliability
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Types of Markets
• Energy Markets (8760 Hours/Year)
– Day Ahead and Real Time
• Wholesale
• Retail
• Capacity Markets (1 Hour/Year)
– Look 1 to 10 years into the future
• Ancillary Services Markets
– Manage the Reserves needed for reliability
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Types of Markets
• Energy Markets
– Wholesale
• Utilities shop for energy for their customers
– Retail
• Customers shop directly for their own energy
• Federal Regulators (FERC) governs the
wholesale market
• State Regulators determine whether
customers have access to a “Retail Market”
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Types of Markets • Bi Lateral Energy Markets
– Day 1 Markets involve “Bi-lateral” contracts
between individual suppliers and users
– Energy Purchase and Contract Path are separate
transactions
• LMP Energy Markets (MISO 2005)
– A Market Operator creates a clearing house
where load and generation can trade
– Generation “Offers” energy
– Load Serving Entities “Bid” their load
– The market automatically matches buyers and
sellers
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Types of Markets • Bilateral Markets capture about 97% of the
value in matching buyers and sellers of
energy
• LMP Market systems are complex and costly
• LMP Markets cover very large areas to
capture the remaining value and to offset
their costs
– MISO covers 15 states and one Canadian
Province
– MISO Day 2 Market costs $100 Million per year
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MISO Markets
• MISO Energy Markets
Begin in 2005
– Day Ahead and Real Time
Energy Markets
– ARR/FTR Transmission
Rights Market
• 2009 Ancillary Services
Market Begins
• MISO Ancillary Services
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MISO LMP
Market
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MISO LMP Market
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MISO Real Time Market
LMP Differential Example
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Types of Markets
• Capacity Markets
– Cover the adequacy of energy on the highest use
hour of the year
– Drive the need to build new resources
• Resources can be new generators
• Resources can be “Demand Response” loads
– Capacity includes the generation to cover load
and reserves to assure reliable operation
• PJM has a capacity market
• MISO has a “Capacity Construct” with an auction for
capacity purchases.
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Types of Markets
• Ancillary Services Markets
– Create a market to manage the cost of “Operating
Reserves”
– MISO ASM began in 2009
• Covers Supplemental Reserves
– Spinning Reserves
– Non-Spinning Reserves
• Covers Regulation
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Focus on Markets • Where are we going?
– Demand Response Resources
• PJM & MISO
– “Smart Grid” technologies
– Increasing Use of Variable Resources
• Wind, Solar
• Storage
– Record Low Natural Gas Prices 2012
• Fracking
– Significant Retirements of Smaller Coal
Generators
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Questions and Answers