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Holistic Planning (For the Good of the Whole)
 

Holistic Planning (For the Good of the Whole)

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Presentation made to the San Francisco Chapter of the IEEE PES Society in March 2008

Presentation made to the San Francisco Chapter of the IEEE PES Society in March 2008

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    Holistic Planning (For the Good of the Whole) Holistic Planning (For the Good of the Whole) Presentation Transcript

    • Holistic Transmission and Resource Planning - For the Good of the Whole Stephen Lee Senior Technical Executive Power System Planning and Operation March 3, 2008 Presented to IEEE Power Engineering Society IEEE Power and Energy Magazine, San Francisco Chapter Sept/Oct 2007 Hosted by California PUC, San Francisco
    • Outline • Electricity – Central Planning or Free Market • What is Holistic Planning? • Integrated Planning Revisited • Reliability Assessment of Whole Operating Space • Holistic Transmission Planning • Holistic Resource Planning • Concept of Unity in Diversity • Optimal Holistic Resource Mix with CO2 Cost • Costs and Benefits Distribution • Demonstration of the CAR software © 2007 Electric Power Research Institute, Inc. All rights reserved. 2
    • Electricity – Central Planning or Free Market • Decades of the regulatory model or “Central Planning” – Problems of cost-overrun and/or over-capacity – Central planning does not handle uncertainties well • Power markets – California market meltdown and bankruptcy of Enron – Free markets tend to be short-sighted and not social conscious • Lessons learned – Both systems have problems © 2007 Electric Power Research Institute, Inc. All rights reserved. 3
    • Need for New Approach • With restructuring and greater market activities, the power grid is being used in ways not in the original designs • Increased reliability risk to grid operation • Increased burden on greater situational awareness by operators • It is time to revisit the way we plan the power grid • The power grid should again be designed to be operated in the new ways it will be used, and perhaps even in unanticipated uses • Key words: HOLISTIC, ROBUST, FLEXIBLE © 2007 Electric Power Research Institute, Inc. All rights reserved. 4
    • What is Holistic Planning? • Holistic Planning is to develop a whole or a part of the electric power system, with full consideration of all its parts, responsive to the public, modeling all reasonably probable scenarios of uncertainties affecting planning as well as future power system operating conditions, with additional tests to assess the robustness of the system when exposed to “unlikely” but potentially devastating disturbances or other events, in order to achieve a system which has: – Economic efficiency – Adequate reliability – Acceptable environmental impacts © 2007 Electric Power Research Institute, Inc. All rights reserved. 5
    • Principles of Holistic Planning • To compare alternative plans, a comprehensive and quantitative metric which corresponds to the maximization of public benefits for the whole system. • Probabilistic reliability criteria in lieu of deterministic criteria; otherwise, transmission investments could be driven equally by contingencies that have widely different probabilities, resulting in non-optimal resource allocation. • The scope of the whole system extends beyond the power system to include the local, regional and global environment. • Fair and equitable method for allocating costs and benefits having a causal and proportional relationship between the use of the assets and the costs or benefits to be borne by the parties. • The rules of the road for each party should be such that its incentive does not induce decisions against the global objective of the whole system. Instead, each party would stand to gain if the whole system achieves more and more global optimality. By following individual and diverse incentives, unity in global objective should be achieved. © 2007 Electric Power Research Institute, Inc. All rights reserved. 6
    • Integrated Planning Revisited • The ideological platform is “optimal resource allocation” • A balanced evaluation of the supply side and the demand side in which all energy supply alternatives and all conversion of energy into energy services are subject to evaluation on a level playing field. • Involves individuals as well as collective preferences • For example, on the individual side, customers want full control of choices which they make based on the options presented to them; on the collective side, customers do accept affiliation to a group and therefore admit to assume their share of a collective responsibility • Integrated planning can be viewed as a process for balancing individual as well as collective preferences. © 2007 Electric Power Research Institute, Inc. All rights reserved. 7
    • Reliability Assessment of Whole Operating Space • We assess reliability for limited operating conditions, e.g., – Annual peak load – All transmission lines in service • What about? – Other load levels or other hours – Maintenance schedules of transmission and generation – External or market transactions © 2007 Electric Power Research Institute, Inc. All rights reserved. 8
    • Boundary Conditions Wh c at M –p sis wD Outside Boundary i tF ln oo Conditions eer ra P ow en G Load and Load Profile Inside Boundary Conditions Voltage Operating State – “You are here” System Operating Limits Transmission and Generator Connectivity and Topology © 2007 Electric Power Research Institute, Inc. All rights reserved. 9
    • G1 is net export out of area A1, when positive. Community G2 is net export out of area A2, when positive. Activity G3 >0 G3 is net export out of area A3, when positive. G4 = - G1 - G2 - G3, is automatically given, Room when G1, G2, and G3 are specified. G3=3000 G2 >0 G3=2000 A 4-Area Interconnection G3= 0 G1 >0 A1 A2 G3= -2000 A3 A4 G3= -3000 The Constraints on Any Combination of Net Exports (G1, G2, G3 and G4) are walls of this 3-D “CAR” A floor plan is a two-dimensional nomogram. © 2007 Electric Power Research Institute, Inc. All rights reserved. 10
    • G3 >0 G3=3000 G2 >0 G3= 0 G1 >0 G3= -3000 © 2007 Electric Power Research Institute, Inc. All rights reserved. 11
    • N-0 N-1 Boundary = N-1 Contingency Criteria © 2007 Electric Power Research Institute, Inc. All rights reserved. 12
    • N-1 criteria enforce possibly uneven reliability N-1 Boundary = N-2 Contingency Criteria © 2007 Electric Power Research Institute, Inc. All rights reserved. 13
    • CAR Provides Statistics of Contingency Constraints to TNB (Malaysia) © 2007 Electric Power Research Institute, Inc. All rights reserved. 14
    • Bar Chart for a Month © 2007 Electric Power Research Institute, Inc. All rights reserved. 15
    • Holistic Transmission Planning • White space is the inside of the CAR (community Activity Room) where operation is reliable • Future growth requires operating outside the white space • How do we expand the grid to fit all future Line 2-4 operating conditions (described by the ellipse?) Line 1-4 • CAR gives the holistic answer by moving all necessary walls the right amount (increase capacities of line 1-4 by 2500 MW and 2-4 by 1200 MW) © 2007 Electric Power Research Institute, Inc. All rights reserved. 16
    • Variation of CAR with Different Load Levels Duration Load Level © 2007 Electric Power Research Institute, Inc. All rights reserved. 17
    • Relate Monthly Load Duration Curves to Scheduled Outages Monthly Load Duration Curves Hours 0 5000 10000 15000 20000 25000 Load (MW) © 2007 Electric Power Research Institute, Inc. All rights reserved. 18
    • No. of Simultaneous Scheduled and Unscheduled Line Outages (Within Same Day) Over 12 Months of a Year (Maximum, Average and Minimum) Simultaneous Line Outages (All) 20.0 15.0 No. of Lines 10.0 5.0 0.0 1 2 3 4 5 6 7 8 9 10 11 12 Month Max Outages / Day Min Outages / Day Average Outages / Day © 2007 Electric Power Research Institute, Inc. All rights reserved. 19
    • Holistic Resource Planning • How to achieve results of integrated planning in today’s non-vertical utility structure? • Parts of the whole maximizing their separate incentives may work against achieving the good of the whole © 2007 Electric Power Research Institute, Inc. All rights reserved. 20
    • Unity in Diversity • Diversity means the exercise of an individual’s right of free choices. • Unity in Diversity means creating unity while preserving diversity, or allowing diversity to achieve unity. • Hypothesis – – Align an individual’s selfish incentive more with the socially optimal objective – Then the creative energy of individuals would achieve the social objective. © 2007 Electric Power Research Institute, Inc. All rights reserved. 21
    • Optimal Decisions Total Cost = Tier 1 Cost + Tier 2 Cost Tier 1 Costs Tier 2 Costs (Public Good) (Direct Costs) * Best Decision Decision is not optimal if Tier 2 costs are ignored © 2007 Electric Power Research Institute, Inc. All rights reserved. 22
    • Common Property of the Human Race? “It is a position not to be controverted that the earth, in its natural, cultivated state was, and ever would have continued to be, the common property of the human race.” -- Thomas Paine, Agrarian Justice • Tier 2 assets (e.g., air, water, land) with PROPERTY RIGHTS belonging to the inhabitants • Create a Tier 2 class of ownership • Distribute Tier 2 revenues and benefits to all Tier 2 owners through Public Benefits Funds (PBF) • People will then behave in accordance with the objectives of minimizing the total Cost (direct Tier 1 + Tier 2 costs) © 2007 Electric Power Research Institute, Inc. All rights reserved. 23
    • Basic Principles of UDi-ism (Unity in Diversity) • Tier 2 Assets and Prices to capture externalities • Tier 2 Ownership and Property Rights What if the price of a hamburger includes a medical cost due to health effect? What benefits will it bring to the consumer and to the country? What new and healthier food will become good businesses? © 2007 Electric Power Research Institute, Inc. All rights reserved. 24
    • Levelized Annual Cost for Six Power Plant Types with CO2 Cost = $40/ton 1000 900 800 700 Nuclear 600 COAL $/kW/yr Comb Cycle 500 IGCC 400 CT 300 Wind/Solar w Storage 200 100 0 0 1000 2000 3000 4000 5000 6000 7000 8000 Hours per Year Operation © 2007 Electric Power Research Institute, Inc. All rights reserved. 25
    • CO2 Price Sensitivity of Electric Generation Market Shares with Oil Price at 60 $/bbl, Coal Price at 4 $/MBTU and Wind/Solar w Storage at 5000 $/kW 100% 90% 80% 70% Wind/Solar w Storage Market Share 60% CT IGCC 50% Comb Cycle 40% COAL Nuclear 30% 20% 10% 0% $- $5 5 0 5 0 5 0 5 0 5 0 5 0 0 5 0 $1 $1 $2 $2 $3 $3 $4 $4 $5 $5 $6 $6 $7 $7 $8 CO2 Cost ($/ton) © 2007 Electric Power Research Institute, Inc. All rights reserved. 26
    • © 2007 Electric Power Research Institute, Inc. All rights reserved. 27
    • Oil Price = $60 / bbl © 2007 Electric Power Research Institute, Inc. All rights reserved. 28
    • Oil Price = $90 / bbl © 2007 Electric Power Research Institute, Inc. All rights reserved. 29
    • Flow of Money for Cap and Trade System Exchange $ $ Allowance Certificates Green Power Plant Non-compliant Power Plant $ $ Electricity Electricity Electricity Consumers © 2007 Electric Power Research Institute, Inc. All rights reserved. 30
    • Flow of Money with CO2 Public Benefits Fund Accountable to International Agreements Trustee of CO2 Charge High $ 0 or Low $ Rebate incentives and Electricity subsidies Green Power Plant Non-compliant Power Plant $ $ Electricity Electricity Electricity Consumers © 2007 Electric Power Research Institute, Inc. All rights reserved. 31
    • Costs and Benefits Distribution • Economics should be based on costs and not on prices • Rational decisions by non-public entities are based on financial incentives (selfish) + other factors of persuasion • If costs and benefits are not distributed equitably, rational decisions may not be compatible with optimal resource allocation for the Good of the Whole © 2007 Electric Power Research Institute, Inc. All rights reserved. 32