IEEE Electrification Magazine - September 2015 - 53

Can the grid accommodate the high growth in renewable sources for a decade or
more? In a word, yes. Electric grids, especially those that are larger and tightly interconnected, are tremendously efficient at accommodating dramatic shifts in fuel supply.
However, integration of renewable sources into the grid will not be automatic. It will take
innovative engineering and planning to incorporate large amounts of renewable resources seamlessly and cost-effectively over the long term.
One solution is energy storage. There is a tremendous amount of hype surrounding
energy storage-and for good reason. Energy storage devices may provide the best
resource for services needed to maintain grid reliability in a scenario where a large percentage of generation will come from variable resources. Because renewable generation
carries a higher degree of uncertainty and variability of supply compared to traditional
resources, new value propositions are emerging for energy storage technologies as an
integration tool.

Performance-Based Regulation

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To maintain the frequency of an interconnection and to balance supply and demand within a balancing authority, power grid operators use a cruise-control-like system called automatic generation control, also called regulation. The regulation dispatch signal is used to
fine-tune the system by ramping generation up or down when supply and demand are out
of balance.
This service is especially critical for restoring the system frequency to 60 Hz during largefrequency excursions typically caused by sudden losses of generation, transmission, or load.
Power system operators carry an appropriate amount of regulation according to the size of
their systems. Larger systems have an easier time balancing their grids due to the number of
resources connected and the resulting amount of inertia. Therefore, larger systems need
fewer megawatts of regulation as a percentage of their peak loads.
Conversely, smaller systems need a greater amount of regulation as compared to their
peak loads. For example, PJM Interconnection, a system with a peak load of 163,500 MW carries an average of 650 MW of regulation every hour. By contrast, the California Independent
System Operator, about one-fourth the size of PJM in terms of peak load, carries between 300
and 400 MW.
Providing regulation is a demanding service. Every 2 to 4 s, grid operators send a signal to
adjust the output of a generator, ramping it up or down in response to the balancing needs of
the system. PJM competitively selects resources to provide this service from offers in the regulation market. Offering resources are then cleared on a least-cost basis and
are committed hourly. Once committed, at the top of the operating hour,
resources begin to receive the regulation signal dispatching them within the
range of their offers. (For example, an offer of 10 MW of regulation will receive
dispatch instructions between +10 and −10 MW of the set point.) As long as
resources meet a minimum threshold of performance within the operating
hour, they are paid the regulation market clearing price (in US$/MW) for the
total megawatts of capability they provided that hour.
In PJM, coal, gas, and hydro resources typically have provided this service. In 2010, operational demonstrations using battery and flywheel technology to provide regulation revealed two key findings. First, the new technologies were extremely fast, responding to regulation dispatch signals in
milliseconds. Second, the market structure did not provide compensation
incentives for resources that were faster responding and more accurate in
following the regulation signal and, therefore, contributing a greater amount
toward system control.
To address these technology advancements and the resulting market shortfall, the Federal Energy Regulatory Commission (FERC) issued Order 755, which instructed the competitive wholesale markets in the United States to compensate fast-responding regulation resources appropriately. To comply with FERC Order 755, PJM made two major regulation market changes to take
advantage of fast-responding resources and to provide a performance incentive to all resource types
following PJM's dispatch signal.

Additional ramping
is calculated as
mileage, which is the
sum of the absolute
value of the change
in dispatch between
each interval.

IEEE Electrific ation Magazine / S EP T EM BE R 2 0 1 5

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Table of Contents for the Digital Edition of IEEE Electrification Magazine - September 2015