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Wind Integration in Alberta:Market & Operational Framework ImplementationAESO Stakeholder Information Session
October 19, 2007
Warren Frost
Vice President,
Operations & Reliability
Laura Letourneau,
Director, Market Services
2
Purpose of Today’s Session
• Ensure understanding of the Market & Operational Framework (MOF) for Wind Integration in Alberta
• Communicate our plans for MOF implementation and ensure stakeholders understand when and how they can participate
• Provide opportunity to receive input and feedback on our approach and plans for developing and implementing MOF
3
Outline
• Role of AESO and facts about Alberta
• Reviewing Wind Integration Challenges
• Wind Integration Journey in Alberta
• Market and Operational Framework Addresses the Challenges
• MOF Implementation Plans
• Next steps
4
Role of Alberta Electric System Operator (AESO)
• Independent System Operator for the Alberta Interconnected Electric System
– System Operations: direct the reliable operation of Alberta’s power grid
– Markets: develop and operate Alberta’s real-time wholesale energy market to facilitate fair, efficient and open competition
– Transmission System Development: plan and develop Alberta’s transmission system to ensure continued reliability and facilitate the competitive market and investment in new supply
– Transmission System Access: provide system access for both generation and load customers
5
Alberta’s Electric Industry
• 9,661 MW peak and 80% LF
• 11,849 MW total generation
• Over 280 generating units
• Wholesale market with about 200 market participants
• > 21,000 km of transmission
• Interties BC (up to 780 MW) & Sask. (up to 150 MW)
BC
AltaSask
5,893 MW
4,412 MW(Other renewables)
178 MW
(Wind)
497 MW
869 MW
6
Reviewing the challenges to integrating wind
• Reliability issues beyond 900 MW – need mitigating measures, resources and the scale/costs escalate rapidly beyond 900 MW
• Wind power is variable – sometimes unpredictable, increases or decreases rapidly and wind patterns can be counter to load
• Need dispatchable generation – capability from conventional generation considering physical limits (ramping limits and start up times)
• Transmission upgrades – need upgrades in SE/SW of the province
• Large wind potential in Alberta – framework, mitigating measures, obligations and costs were not defined
Wind power and load do not
correlate well
7
2006 DataGeneration Characteristics
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2006 Data 2weeks per division
MW
Cap
acit
y
Non-Disp. Disp. MW Reserves (Active+Standby) Off
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Need Dispatchable Resources to Accommodate Wind
Baseload Generation
Ma
rke
t C
ap
ab
ilit
y
Ab
ov
e B
as
elo
ad
Amount of dispatchable generation varies according to
market conditions
9
Adding more wind
• To integrate more wind the operator needs to “know what to do” and “have the necessary resources/tools”
• Current resources/tools
The energy merit order
Regulating reserves
• New resources/tools
Wind power forecasting
Additional regulating reserves
Supply / load following service, (i.e. the service would accommodate pumped storage, batteries, others?)
Power and/or ramp-rate limiting of wind power facilities
10
Wind Integration Journey
2003 2004 2005 2006 2007
Initiate study on large
scale wind1200 MW
Wind Power Facility
Standard put in place with caveats on wind power
management
Further studies on operational issues and
need for Wind Power Management
Wind Variability
study released
Phase 1 System Impact Studies
Confirms need for
additional mitigating measures
Phase 2 System Impact Studies
Confirms need for
additional mitigating measures
Develop and finalize
market and operational framework
(MOF)
Replace temporary threshold with MOF
900 MW Threshold
Initiate joint AESO-
CANWEA collaboratio
n
11
Market and Operational Framework
• Market and Operational Framework (March 2007) replaced the temporary 900 MW threshold – effective September 26, 2007
• Premise of framework - If the System Operator receives a reasonable forecast of wind power generation, then they can establish an operating plan to accommodate the forecast wind energy by using the following resources/tools:
– Forecasting
– The Energy Market Merit Order
– Regulating Reserves
– Wind Following Services
– Wind Power Management
12
Challenges and Solutions
CHALLENGES MOF SOLUTIONS
Backup generation for wind power
Energy Market, RegulatingReserves, Wind Following
Wind variability, supplysurplus, ramping events
Predictability of wind powerWind power forecastingrules and requirements
Wind power management, forecasting & OPPs
Transmission developmentCredible forecasts of
wind project development
Wind interconnection projects Queue management
Cost Allocation
LoadTransmission and ancillary services
Wind Facility OwnersForecasting and Power management
13
Key MOF Conclusions
• Wind is not fully dispatchable therefore:– Wind Must Forecast supply ‘offer’ (Must Offer = Must Forecast for wind generation
Wind Power forecasts will not set price - $0/price taker
• Regulating Reserves and/or Load/Supply Following are Ancillary Services – therefore according to current Policy (TDP) and Regulation (TReg) costs will be
allocated to load
– level of reasonable procurement of additional ancillary services is less clear and will be monitored
• Market participants are obligated to comply with dispatch instructions and directives from the system controller. Wind generators will meet this obligation by:
– installing power management technology as a condition of service
– complying with instruction from the system controller to limit output in the event the system cannot absorb all the forecasted or actual wind generation
• As per TDP, “constrained down payments will not be paid to generators”
14
What’s Changed?Replacing Threshold with MOF
• Industry acceptance of mitigating tools to manage load-supply balance with increasing supply variability
– Wind responsibility for power management
• Industry acceptance order of use of tools
– Forecasting > Energy Market > Ancillary Services > Wind Power Management
• Industry acceptance on cost allocation
– Forecasting – wind generators
– Ancillary Services – load
– Power Management costs (operating & capital) – wind generators
• We have made progress on forecasting and system operator tools
15
Next Steps in Wind Integration
• Currently 497 MW operating on the grid today with;
– No major operational issues & no increased ancillary services
– Gaining experience with wind and learning from events
• 545 MW anticipated by end of 2007
• 1400 MW can be accommodated with approved transmission upgrades
• Continued strong interest in wind development in Alberta
• Implement Market and Operational Framework over the next year or so
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InterconnectionQueue
Management
Implementing the Market and
Operational Framework
Technical Requirements
for Power Management
Wind Forecasting
System OperatorTools
Integration Beyond 2000 MWDiversity?
Market & Operational Rules
Generation Scenario Development &
Tx Planning
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Next – Implementation Plans
• Introduce leader for each work activity who will speak to:
– Focus/objective for work
– Work approach & plan
– If / how / when stakeholders participate
– Progress to date
• Stakeholder Input / Feedback (please hold comments and questions until all work leaders have presented, unless needed to clarify understanding)
• Conclusion & Next Steps
18
Wind Integration Work Streams
• Market & Operating Rules (Laura Letourneau)
• Power Management (John Kehler)
• Forecasting (Darren McCrank)
• System Operator Tools (Ming Hu)
• Interconnection (Fred Ritter)
– Queue Management Practices
– Standards for Interconnection (Power Management & Forecasting Requirement)
• Generator Scenario Development Methodology (Jeff Nish)
• Transmission Planning (Ata Rehman)
• Diversity (John Kehler)
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Market & OperationsRules & Procedures
Laura Letourneau
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Structure of the ISO Rules
• Primarily the combination of three documents:
– Market Participation Rules
– Settlement System Code (Load Settlement)
– Operating Policies & Procedures
• Public document posted on the AESO web site “www.aeso.ca”
21
How are ISO Rules made?
• Need identified and reviewed by applicable business area
• Rule change analysis (add, modify, delete)
• Initial proposal
• Stakeholder consultation
• Recommendation
• Decision
• Implementation
The ISO Rules Change Process is a quarterly cycle and typically takes 4-5 months to complete. Implementation may be delayed, depending on complexity.
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ISO Rule Change Process
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MOF – Anticipated Rule Changes
• Forecasting requirements
– Frequency/timing
– Accuracy/Compliance
• Power Management procedures
– Supply Surplus - $0 offer dispatch procedures
– Other wind power management conditions & curtailment protocol
• Ancillary Services
– Refinement/improvements to Operating Reserve Market
– Development of Supply Following Service
• Other?
24
Approach/Timelines
• AESO has well established processes for the development and approval of all rule changes (Market/OPP/Settlement)
• These processes will be used for all rules developed to implement MOF
• Stakeholders, therefore, have opportunity to provide input/feedback during the consultation stages
• Timelines for changes are dependent on other work activities
– Forecasting (interim-earliest mid-08; final-earliest Dec ‘08)
– Power Management (earliest mid ’08)
– Ancillary Services
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Operating Reserves Market Redesign Proposal
• Timing
– Proposal will be circulated to industry in October.
– Opportunities for changes to product on current NGX platform as first phased in step. Interim proposal could envision:
• change of contract with NGX to address design issues
• change of procurement to auction format
– Decisions for Operating Reserve market will be made following normal consultation
– In the interim, the AESO will continue to procure Operating Reserves to meet forecasts developed by the Operations Planning Group.
• expect increase in levels as wind is added.
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Operating Reserves Market Redesign Proposal
• Current design overly complex for size
– AESO forecasts operational need at least day ahead
– AESO as single buyer
– Price established at equilibrium between bid and offers
– Misalignment with energy market
• Proposal to align Operating Reserves (OR) with energy at T-2
– Dispatch OR offers from merit order instead or “pre-purchasing”
– Changes to pricing
• Moving Operating Reserves closer to real time allows for:
– use of near real-time forecasts
– Integration of the active and standby products – increasing market depth
– Convergence and efficiencies of assets across energy and OR
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Operational Overview
John Kehler
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Real-time system operation
SupplyDemand
Supply-demand balancing seems simple at first - When demand changes, supply is dispatched up or down to match
The trick is keeping up with changes to prevent large imbalances from occurring - So operators need additional information to help out
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Supply-Demand Balancing InputWhat is Changing?
How good is the load forecast today?
How good is the load forecast today?
What is the wind power forecast? What is the ramp rate?
What is the wind power forecast? What is the ramp rate?
What are the Interconnection schedules?
What are the Interconnection schedules?
What is the load forecast change? What is the ramp rate?
What is the load forecast change? What is the ramp rate?
How good is the wind power forecast today?
How good is the wind power forecast today?
Net ChangeRamp rate requirement
Is the merit order changing?
Is the merit order changing?
What generators are still ramping from the last dispatch? How much energy is still to come?
What generators are still ramping from the last dispatch? How much energy is still to come?
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Supply-Demand BalancingDispatch Decision
What are the Regulating Reserve units doing?
What are the Regulating Reserve units doing?
What is the ramp rate capability in the merit order over the next 10, 20, 30 minutes?
What is the ramp rate capability in the merit order over the next 10, 20, 30 minutes?
How much capacity to dispatch to get the required ramp
rate?
How much capacity to dispatch to get the required ramp
rate?
Do I need to dispatch more ancillary services?
Do I need to dispatch more ancillary services? Will I need to
activate any Wind Power Management procedures?
Will I need to activate any Wind Power Management procedures?
Dispatch Decision
Will I need to activate Supply Surplus / Shortfall procedures?
Will I need to activate Supply Surplus / Shortfall procedures?
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Repeat When Necessary
What are the Regulating Reserve units doing?
What are the Regulating Reserve units doing?
What is the ramp rate capability in the merit order over the next 10, 20, 30 minutes?
What is the ramp rate capability in the merit order over the next 10, 20, 30 minutes?
How much capacity to dispatch to get the required ramp
rate?
How much capacity to dispatch to get the required ramp
rate?
Do I need to dispatch more ancillary services?
Do I need to dispatch more ancillary services? Will I need to
activate any WPM procedures?
Will I need to activate any WPM procedures?
Dispatch Decision
Will I need to activate Supply Surplus / Shortfall procedures?
Will I need to activate Supply Surplus / Shortfall procedures?
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Wind Power Management
John Kehler
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Review of Wind Power Management and the Market and Operational Framework
• “ In situations where the system cannot absorb all the forecasted or actual wind power generated, maintaining system security will call for wind power to be dispatched down, ramp rate limited or dispatched off”
• “This may occur during the following conditions:
– Forecast loss of wind and insufficient ancillary services or ramping services
– Supply surplus – thermal units will not be dispatched below minimum stable operating limits
– Insufficient ancillary services
– Unforeseen wind conditions
34
Workgroups and Industry Representation for Wind Power Management
• Work groups will implement the Market and Operational Framework for wind power management
• Work groups will develop recommendations to put forth to industry and stakeholders for consultation
• Three work groups are proposed primarily due to the different mix of participants required. – Work Group #1 - WPF technical requirements
• AESO, manufacturers, technical staff from wind power developers with operational facilities, new wind developers
– Work Group #2 - Supply Surplus protocol• AESO, Merchant generators, Industrial generators, Importers, Wind power
developers from existing facilities, new wind power developers
– Work Group #3 - Wind power management protocol• AESO, Wind power developers from existing facilities, new wind power
developers, regulating reserve providers
35
Purpose of Workgroup #1
• Wind Power Facility technical requirements
– Provide recommendations to the AESO on;
• Technical specifications at WPFs for ramp rate limiting, power limiting and supplemental over frequency control
• Technical specifications for WPF operators to activate / deactivate ramp rate limiting and power limiting from AESO dispatch systems
• The recommendations are planned to be complete during early Q1 2008 and posted for industry feedback
• The recommendations once approved by the AESO will be forward to the Standards group for implementation using existing consultation processes
36
Purpose of Workgroup #2
• Supply Surplus protocol
– Provide recommendations to the AESO on a new protocol for out of market $0 offer dispatch
• Recommendations will include considerations for generation curtailment from the merchant, industrial and wind generation when supply surplus conditions exist.
• The recommendations are planned to be complete by Q1 2008 and posted for industry feedback
• The recommendations once approved by the AESO will be forward to the OPP groups for implementation using existing consultation processes
37
Purpose of Workgroup #3
• Wind power management protocol– The purpose of the workgroup is to provide recommendations to the
AESO to implement ramp and power limiting protocol for;
• Forecast loss of wind and insufficient services
• Insufficient ancillary services
• Unforeseen wind conditions
• Disturbances and emergency conditions
• The recommendations are planned to be complete by Q1 2008 and posted for industry feedback
• The recommendations once approved by the AESO will be forward to the OPP groups for implementation using existing consultation processes
38
Next Steps
• Kickoff meeting will include all 3 work groups and proposed date is Wed. Nov 7 from 9:00 to 12:00 AM.
• Industry or stakeholders seeking interested in participating on a work group or work groups please contact [email protected]
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Wind Power Forecasting
“If the System Operator receives a reasonable forecast of wind power generation, then …”
Darren McCrank
40
The Pilot Project Defining a Reasonable Forecast
Purpose:
• To evaluate different forecasting methods in order to find the most effective means to forecast wind power in Alberta.
• To leverage the experience of other jurisdictions globally
• To educate Alberta’s power industry, including the AESO, on wind power forecasting techniques and capabilities
• To recommend wind power forecasting requirements to be implemented in Alberta
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The Pilot Project Design
• Trial three very different forecasting methods over a one year period:
• AWS Truewind (US)
• WEProg (Denmark)
• energy and meteo (Germany)
• 4 different geographic terrains / wind regimes in Alberta
• T-1 to T-48 hrs refreshed hourly
• 7 existing and 5 future facilities to represent geographic diversity and future expansion
• Data Collection by Phoenix Eng. (Calgary) – 1 met tower/site
• Independent analytical analysis from ORTECH (Canada)
Funded by AESO
Alberta Energy Research Institute
Alberta Department Of Energy
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The Pilot Project Schedule
• Feb 2007 - April 2007
• Data Collection, model training (using historical information)
• April, 2007
• Forecast Delivery Began
• Quarterly Reports
• Sept 07, Nov 07, Feb 08
• Final Report
• Draft End May 08
• Final End Jul 08
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Wind Forecasting Work GroupEstablished in July 2006
• Implied task: Be prepared to complete any additional tasks assigned by the AESO
• Additional tasks could include designing an interim method of forecasting until the pilot project is complete
• This task could be triggered by operational issues or inefficient use of Ancillary Services
• No change to current work group membership, meetings and timelines
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September 6, 2007Day Ahead Forecasts (delivered 7am Sept 5)
7am Forecasts on [2007/09/05] for Next Day
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The forecasts delivered at noon on Sept 6
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October 10, 2007Day Ahead Forecasts (delivered 7am Oct 9)
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System Operator ToolsMing Hu
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Purpose
– Engineering tool
• To design and test protocols, procedures before implementation into OPPs
– Real-time system operation tool
• To effectively manage:
• The procedures in the real-time
• complicated real-time system operation with Efficiency, Consistency and Transparency
– Common basis for knowledge sharing, experience and continuous improvement
49
Status and Consultation
• Status
– Design and development started in Q4 2006
– Testing started July 2007 with System Operators
– Several improvements based on operator feedback
– Ready to help out the workstreams
• Workgroup and Consultation
– No external working groups due to the confidential nature of the tools and the data
– The AESO will update progress and demonstrate tools when applicable
50
Architecture of the Tool
System Supply and Control
• Energy Market Merit Order
• Generator ramping characteristics
• Regulating reserve merit order
• Load Supply Following (new)
• Wind Power Management (new)
System Change• Load forecast
• Actual and forecast Interchange Schedules
• Wind power forecast (new)
System Considerations• ATC Limits
• Uncertainty Analysis (new)
System Status• What has been dispatched
• Actual generator output
ToolAssess the situation & risk of:
- System Ramping Capability - Supply Shortfall issue
- Supply Surplus (Zero-offer) issue - Minimum technical output issue
OTC violation issue
• Energy Market Dispatch• Trigger Supply surplus procedure• Trigger Supply shortfall procedure• Trigger Additional AS procedure• Trigger WPM procedure
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Minimum Technical Output
MO Dispatch
Zero offer in MO
Example of 8 Hour Assessment
Wind generation forecast
MO Ramping issue
Alberta Internal Load
Load served by Market
TMR
EMDtarget
MO TOP
Wind generationforecast
Numbers are not realFor concept demonstration only
Grid Load
The graph assumes we are at midnight
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Customer Interconnections
Fred Ritter
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Customer Interconnections
• Interconnection queue management
• Wind power facility technical requirements
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Technical Requirements-Interconnections
Modifications planned to the AESO’s existing “Wind Power Facility – Technical Requirements – November 15, 2004”
•Voltage Ride Through
•Governor Control
•Operational controls (ramp rate and power rate limits)
•Forecasting
55
Standard Applicability
• Determine which of the existing wind power facilities will be obligated to meet the new requirements.
– November 15, 2004 Technical Requirements provides direction
• Much like the last revision to the Generation and Load Standard each wind generator will be informed of their specific obligations.
– Draft standard for stakeholder comment
– Reference in AESO Project Functional Specifications
– Direct customer contact
56
New or Modified Requirements
• Voltage Ride Through – WECC is in the process of developing new requirements which will become an AESO requirement.
• Governor Control – The need for the addition of governor control and how it would be implemented.
• Operational controls – The technical requirements for the operation of both ramp rate limits and power rate limits.
– Includes SCADA signaling and the required setting ranges. Actual settings and application will be determined by System Operations and documented in an OPP.
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New or Modified Requirements (continued)
• Forecasting - The technical requirements for forecasting will be determined by the end of 2008 and incorporated into the standard as a separate revision.
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Standards Development Timeline
• Draft Standard for external comment by March 1, 2008.
• Final Standard by June 1, 2008.
• Forecasting will be a future revision planned for the end of 2008.
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Technical Requirements – contacts
Questions, please contact either of the following:
Dan Shield at (403) 539-2502 or [email protected]
OR
Fred Ritter at (403) 539-2616 or [email protected]
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Generation Scenarios for Transmission Planning
Jeff Nish
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Transmission Planning Approach
20-Year OutlookGeneration and Load Focused
High Level, Conceptual Transmission Alternatives
10-Year Transmission PlanRoadmap for Transmission Development
Context for Need Applications
Individual NeedApplications
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Generation Scenarios for 10-year Plan Published in 2007
Wind1,200-2,900MW
Coal650-1,650MW
Cogeneration1,700-2,200MW
Coal0-1,000MW
IGCC0-500MW
A 10% reserve margin was used to determine the amount of required new generation.
Hydro100MW
Gas400MW
Other100MW
63
Long-term Planning Underway
• AESO load forecast and generation scenarios are key inputs to bulk and regional transmission system concepts
• Generation scenarios describe the development that may occur under the Market & Operational Framework
Consultation:
– Ongoing with generation developers and CanWEA to create reasonable 10 and 20 year generation development scenarios
– Stakeholder session presenting draft generation scenarios in late November 2007
– Current target to update 10-year Plan and 20-year Outlook in 2008
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Transmission System PlanningAta Rehman
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Transmission Planning at the AESO
20 Year OutlookGeneration and load focused
High level, conceptual Transmission Alternatives
10 Year Transmission Plan - Roadmapfor Transmission DevelopmentContext for Need Applications
Specific Bulk and Regional Studies
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Planning Stages for Need Applications
• Need Assessment
• Alternative Screening
• Alternative Assessment and Recommendation
– Technical
– Economical
– Social
• Environmental/Landowner Impacts
• Need Identification Document filed with the Alberta Energy and Utilities Board (EUB) for approval
• Extensive Stakeholder Consultation during each Stage
67
Regional Transmission Development Initiatives
• Northeast Alberta Transmission Development
– Interconnection Proposals at different stages
– Regional Plan in Initial Stages
• Northwest Alberta Transmission Development
– TFO in Facility Application Stage
• Wabamun/Edmonton Area Transmission Development
– Need Analysis Underway
• Central Area (Hanna, Battle River, Sheerness)
– Need Analysis Underway
68
Regional Transmission Development Initiatives Cont.
• Southwest Transmission Development
– TFO in Facility Application Stage
• Southeast Transmission Development
– Need Application Submitted in September
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Wind Integration in Southern Alberta
• Two Aspects for AESO Transmission
– Interconnection Proposals
– System Reinforcements
• Challenges
– Time Lines
• All IPs to be completed by 3rd Quarter of 2008
• System Reinforcements with Extensive Stakeholder Consultation
• Stakeholder Consultation on System Reinforcement
– One-on-one meetings – early November
– Open houses scheduled for mid – November
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DiversityJohn Kehler
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Background
• MOF
– “ The AESO does not expressly have a role in the centralized planning of generation investments. As such, the final arbiter of the value of wind power diversification will be with the investors that allocate capital to specific wind generation facilities”
• That being said, many stakeholders expressed interest in better understanding diversity and market signals for diversity
• AESO Response to MOF Comments:
– “We do intend to conduct further studies to explore the degree and value of diversity as it pertains to the managing wind variability costs and the development and implementation of policy, rules and business practices
72
Principles where Diversity Changes the Behavior or Wind Power
Alberta Wind Generation
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1 Hour Per Division
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Diversity can effect the short termvariability and the longer term
ramps
Short term variabilityLong term
ramps
Diversity East-West
Existing WPFs dispersed throughout southern Alberta
AESO studies indicated that short term
variability increases with wind power
development “but” not in proportion to growth
AESO studies and observation of the
existing WPFs is that diversity has less effect on the long term ramps
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What do we know about diversity in Alberta today
• Existing and proposed facilities are dominantly in Southern Alberta
• For analysis purposes the regions have been identified as SW, SC, SE and Central
• Existing facilities are in the SW, SC and SE areas and have strong correlation (ramp up or down together) in the 1 hour time frame
• It is possible that with no threshold that wind power development in Alberta will take on a larger footprint and change the behavior of wind power through diversification
The most amount of correlation observed in 2007
Wind Power Generation by Region in Alberta(1 Hour Average Data)
0
50
100
150
200
250
300
350
400
1 Day Per DivisionAug 2007 Week 3
MW
SE
SC
SW
The least amount of correlation observed in 2007
Wind Power Generation by Region in Alberta(1 Hour Average Data)
0
50
100
150
200
250
300
350
1 Day Per DivisionAug 2007 Week 3
MW
SE
SC
SW
Wind Power Facilities
Diversity East-West
SW SCSE
Central
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Next Steps
• Commencing Nov 2007, the AESO will monitor and publish a weekly report that will show the diversity of the operational wind power facilities as well as other operational aspects of wind power generation.
• The AESO has examined diversity in the data from the 2004 system impact studies and can publish our findings of this work.
• The AESO will continue to work with the industry and explore the understanding of diversity as wind power developments consumes a larger footprint in Alberta.
• No specific work group on diversity will be developed at this time.
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Questions/Commentson Implementation
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Next Steps
• Please provide any feedback on implementation to [email protected]
• AESO will publish comments
• Each work stream will keep market participants informed and up to date through our newsletter and our website. Please monitor progress and opportunities for participation.
• In addition, the leads for each work stream are appropriate contacts for further information.