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This is an excerpt from the Second Quarter 2012 edition of the Wind Program R&D Newsletter.

Since February 2010, the Variable Generation Subcommittee at the Western Electricity Coordinating Council (WECC) has been investigating the benefits of cooperation between Balancing Authorities (BAs) in the Western Interconnection. In support of this investigation, the Energy Department funded the Pacific Northwest National Laboratory to lead a team of researchers from the National Renewable Energy Laboratory, WECC, and Energy Exemplar. The team is working to develop a detailed procedure for demonstrating the benefits of BA consolidation, and to determine the savings in production costs from consolidating BAs within a large geographic area and by operating them as a single consolidated BA (CBA).

As part of its detailed procedure, the team proposed and evaluated four key technical metrics—capacity and ramp duration, rate, and energy—to demonstrate the potential gains with respect to reductions in balancing reserve requirements that would be accrued from operating 37 geographically contiguous BAs in the Western Interconnection as a CBA.

The main function of a BA is to maintain the balance between load and generation in an interconnected power system to avoid instability that could lead to large-scale blackouts. This is done by consistently matching loads to resources within the system, maintaining scheduled interchanges with other BAs, maintaining frequency within reasonable limits, and providing sufficient generation capacity to maintain operating reserves.

The nature of wind and solar power, as variable natural resources, makes it more challenging for operators to manage these sources of energy within a given electric power system or BA. As wind and solar penetration increases in each of the 37 BAs in the Western Interconnection, it becomes more challenging and costly for the individual BAs to operate independently from one another. Cooperation among BAs can facilitate a high level of variable-generation penetration without significant increase in integration costs, because the collective impact of variability and uncertainty is accumulated over a large geographic area, across multiple distributed resources, and is combined with all other sources of variability and uncertainty(including system load).

The research team found that effective use of the diversity in load and renewable generation over a wide area can indeed achieve significant savings. The team tested its detailed procedure for computing the savings derived from BA consolidation and its evaluation metrics for demonstrating the benefits of BA consolidation using several study scenarios designed for the set of BAs in the western United States. Study results showed significant reduction in the required capacity and ramp rates of balancing services. The CBA, with a much wider geographical boundary, results in significantly less load following, and regulation reserve requirements compared to the sum carried by the individual BAs. It allows for the sharing of variability between BAs and can provide access to additional existing physical response capability. The savings could be realized immediately by reallocating regulation and load following reserve requirements between the BAs to reduce the operational burden.

For a scenario where wind and solar penetration in the Western Interconnection equals 11% of total expected 2020 demand, the research shows that the yearly production cost savings of thermal units for a consolidated WECC ranges between $400 million (2.4% of total annual production cost) to $600 million (3.2%) without taking into consideration the implementation cost for the CBA. The research also shows that the consolidated WECC will have about a 50% overall reduction in balancing reserves in comparison with total reserve requirements that need to be carried by different BAs if they operate individually. The study is currently investigating the potential benefits as the variable generation penetration level increases to 33%. It is also investigating the potential benefits of another form of BA cooperation through the implementation of 10-minute interchange schedules between BAs rather than traditional 1-hour schedules.

Outcomes reported represent an upper bound of potential benefits of BA cooperation and provide the evidence needed to motivate such cooperation to enable higher levels of renewable penetration without significant integration costs. WECC is performing a complementary study to quantify the cost/benefits of implementing a real-time energy imbalance market in the Western Interconnection, which represents another form of cooperation between BAs.

The Pacific Northwest National Laboratory (PNNL) is working to help increase wind and water power production using its expertise in environmental sciences, atmospheric sciences, and electric grid management. This includes developing tools and methodologies that allow more variable generation to flow through our grid system, as well as improving the accuracy of renewable resource predictions through observations and modeling.

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