1

IEEE PES GM 2019

Thursday (8/8)
Ensuring Grid Resilience through Policy,
Standards and Market Constructs
• Chairs: T. Zheng, ISO New England
E. Ela, EPRI

Panelists:
M. Lauby, NERC
P. Leevanschaick, Potomac Economics
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Resilience Framework
Mark Lauby
Senior Vice President and Chief Reliability Officer
North American Electric Reliability Corporation
August 8, 2019
 NERC’s Definition of Reliability

• NERC’s view of “reliability” for the bulk power system consists of two
fundamental and aspirational concepts:
 Adequacy is the ability of the electric system to supply the aggregate electric
power and energy requirements of the electricity consumers at all times, taking
into account scheduled and reasonably expected unscheduled outages of system
components.
 Operating reliability is the ability of the electric system to withstand sudden
disturbances such as electric short circuits or unanticipated loss of system
components.
 A Reliable System is a Resilient System

• The 2005 Federal Power Act requires NERC to develop and enforce
Reliability Standards that:
 Support Reliable Operations
 Provide for an adequate level of reliability.
• System with an Adequate Level of Reliability is resilient
 Industry has designed a reliable Bulk Power System that is robust, resourcefully
operated, and rapidly recovers
 Lessons learned are actively considered during and after an event
 Resilience is a Characteristic of a Reliable System

NERC Reliability Assessments and

Performance Analysis
• Reliability Assessments Bulk Power
• System Analysis System Reliability
• Events Analysis and Security
• Performance Analysis
• Situational Awareness
Operator Training

E-ISAC

*Solely the Bulk

Power System.
Does not include
local distribution
systems.
 Resilience is a Characteristic of a Reliable System

NERC Reliability Assessments and

Performance Analysis Bulk Power System
• Reliability Assessments Reliability and Security
• System Analysis
• Events Analysis
• Performance Analysis
• Situational Awareness Bulk Power System
Operator Training Resilience*
E-ISAC

*Solely the Bulk Power

System. Does not
include local
distribution systems.
 Resilience is a Characteristic of a Reliable System

Bulk Power
NERC Reliability Assessments and
System Reliability
Performance Analysis
• Reliability Assessments and Security
• System Analysis
• Events Analysis
• Performance Analysis Bulk Power System
• Situational Awareness Resilience*
Operator Training

E-ISAC

Bulk Electric System

NERC Reliability Assurance Reliability
• Standards
• Compliance
• Enforcement
• Registration *Solely the Bulk Power
System. Does not include
• Certification local distribution systems.
 Adequate Level of Reliability (ALR)

• Performance Objectives*
 The BES does not experience instability, uncontrolled separation, Cascading, or
voltage collapse under normal operating conditions and when subject to predefined
Disturbances.
 BES frequency is maintained within defined parameters under normal operating
conditions and when subject to predefined Disturbances.
 BES voltage is maintained within defined parameters under normal operating
conditions and when subject to predefined Disturbances.
 Adverse Reliability Impacts on the BES following low probability Disturbances (e.g.,
multiple contingences, unplanned and uncontrolled equipment outages, cyber
security events, and malicious acts) are managed.
 Restoration of the BES after major system Disturbances that result in blackouts and
widespread outages of BES elements is performed in a coordinated and controlled
manner

* See Definition: Adequate Level of Reliability for the Bulk Electric System
 Adequate Level of Reliability

R(t)

R100%
Reliable
Low-Risk/High-Cost
Reliability

RTarget
Adequate Level of Reliability:

Risk Tolerance
• No instability, uncontrolled separation, cascading, or voltage collapse
• Frequency is maintained within defined parameters
Reliable • Voltage is maintained within defined parameters
• Adverse Reliability Impacts beyond design criteria are managed
Operation • Restoration after major system disturbances is coordinated and controlled
RALR-Nadir

Tdisruption Trebound Trecovered t

 Resilience Indicators

• Robustness: the measured ability to withstand certain threats

• Amplitude: a measure of the impact on BPS performance
• Degradation: a measure of a change in system response with respect to an impact
of varying amplitude
• Recovery: a measure of the rate at which the system returns (rebounds) to a normal
or stable state after the disruptive event, including any preparation time
• Recovery state: the state of BPS performance following the recovery period.
 Stable
 Improved
 Deteriorated
 Disruption on BPS

R(t)
Disruptive
Event

R100%
Reliable If Detectable,
Pre-Position
RTarget
Reliability

Recovered
Reliable
Steady-
Operation
RALR-Nadir State

Tdisruption Trebound Trecovered t

 Resilience Framework

R(t)
Disruptive
Event
R100%
Reliability

Reliable If Detectable,
Pre-Position

RTarget

Recovered
Reliable
Steady-
Operation
RALR-Nadir State
Robustness Resourcefulness Coordinated & Adaptability
Disaster Prevention Resistance Period Controlled Recovery Lessons Learned and
and Maintenance Recovery Period Implementation Period
Period
Tdisruption Trebound Trecovered
t
 Resilience Indicators

R(t)
Disruptive
Event Degradation Recovery Recovery State
R100%
Reliable If Detectable,
Pre-Position Improved
Reliability

Stable
RTarget
Deteriorated

Amplitude

RALR-Nadir Robustness

Tdisruption Trebound Trecovered t

 Ensuring ALR

R(t)
Disruptive
Event
R100%
Reliable If Detectable,
Pre-Position
Reliability

RTarget

Recovered
Reliable
Steady-
Operation
RALR-Nadir State

Avoid & control

(e.g. serve critical load)

Tdisruption Trebound Trecovered t

 1

Outlook for Fuel Security and Market Design Enhancements

in New England

Raghu Palavadi Naga

Pallas LeeVanSchaick

Potomac Economics
 2

I. Background
2,000 - New England Resource Mix

Change in Summer Qualified Capacity (MW)

1,500
• Share of 1,000
gas-fired generation has steadily increased in New England over
the last decade.
500
• From 2010 to 2020, 4 GW of oil and coal-fired capacity has/will retire, and
0
other such capacity is economically challenged.
-500
Summer Qualified Capacity in ISO-NE
-1,000

-1,500

-2,000

Dual Fuel Oil Nuclear Coal Hydro Other Natural Gas

 3

I. Background - Fuel Supply Concerns in New England

• New England faces a constrained natural gas pipeline and LNG infrastructure.
– Increased core gas demand in cold weather limits access of gas for power.
– New pipeline and expansion projects typically encounter several challenges.
• ISO studied the region’s vulnerability to fuel security issues in its Operational
Fuel Security Analysis (“OFSA”).
– Considered a range of scenarios to evaluate fuel risk over 90 days of winter.
– Quantified number of hours and days of reserve depletion and load shedding.
– Results suggested significant hours of load shedding.
– Heightened concerns with proposal to retire Mystic plants and Distrigas LNG.
 4

I. Background - Efforts to Address Fuel Security Issues

• In light of the OFSA findings, ISO-NE:
– entered into out-of-market contracts to retain the Mystic units and Distrigas
LNG facility,
– created a short-term compensation mechanism for units that maintain firm fuel
inventories, and
– is working with its stakeholders to design long-term market-based solutions.
 5

Potomac Economics Studies

• Background
• Assessed utilization of oil-fired and dual-fuel resources to identify factors
that limited their availability in a recent cold snap.
• Assessed potential effects of efficient incentives to existing resources on
risks identified in OFSA.
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II. Cold Snap of December 28, 2017 – January 8, 2018

• Late December 2017 to early January 2018 saw a severe cold spell in New
England – daily average temperatures were up to 24 degrees below normal.
• Severe weather conditions resulted in an extended period of natural gas
scarcity.
– Gas prices exceeded $100/MMbtu at times.
• Oil-fired generation was significantly higher this winter relative to the
historical levels.
– Oil inventories depleted rapidly.
– Several units experienced limitations on continued oil usage for various
reasons.
 7

II. Utilization of Oil-Fired and Dual-Fuel Capacity

11000
Emission Limitation
10000
Inventory (Limited by Owner)
9000 Inventory (Postured by ISO)
8000 Outages and Deratings
Forward Reserves Obligation
7000
Average MW

Burning Gas (Low Inventory)

6000 Real-Time Oil Generation
5000 Economic Level on Oil

4000

3000 Output Not

Produced
2000
Actual
1000
Ouput
0
1/1
1/2

1/3

1/4
1/5
1/6
1/7
1/8

1/9
12/26
12/27
12/28

12/29
12/30
12/31

Calendar Day
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II. Utilization of Oil-Fired and Dual-Fuel Capacity

• Oil production averaged only 48% of the estimated level that oil-fired
generation would have been economic. Under-utilization primarily due to:
– Fuel inventory limitations; and
– Forced outages and deratings.
• Price formation and performance incentives were insufficient for efficient
management of fuel inventory limitations.
– Resulted in out-of-market actions, including supplemental commitments and
“posturing” of resources.
 9

III. Fuel Security Outlook for Winter 2022/23 and Winter

2024/25
• ISO currently designing additional incentives for suppliers to acquire fuel
needed to maintain reliability.
• ISO’s OFSA assumptions are based on past experience – but past behavior
is not a fully predictive of future actions in this context.
– ISO’s assumptions are very conservative and could overstate the extent of
reliability issues.
• Reran the OFSA model with two modifications to default assumptions.
– Oil tank replenishment rates
– Dispatch order
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III. Fuel Security Outlook for Winter 2022/23 and Winter

2024/25
Results (Hrs)
30 Min 10 Min Res
Scenario Load
Oil Tank Refills Res Depletion (<
Shedding
Depletion 700MW)
Winter 2022/23
ISO Reference 1.25 138 12 2

Modified Dispatch 1.25 24 0 0

Modified Dispatch Heavy - Unlimited

0 0 0
and Replenishment Light - 2
Winter 2024/25
Modified Dispatch Heavy - Unlimited
0 0 0
and Replenishment Light - 2
Winter 2024/25 - Mystic 8 and 9 and Distrigas LNG Retirement
Low LNG Injection 216 2 0
Heavy - Unlimited
High LNG Injection Light - 2 23 0 0
 11

III. Fuel Security Outlook for Winter 2022/23 and Winter

2024/25
• OFSA model may indicate the need for additional installed capacity to
address fuel security due to conservative assumptions.
• Total oil inventory and LNG import capability are likely high enough to
satisfy the demand during a severe winter event.
– Require utilization rates far above any observed in the past.
• Market design that incentivizes suppliers can address fuel security concerns.
– In 2022/23, system would be reliable even with significant supply reductions.
– In 2024/25: (a) No significant fuel security issues with Mystic and Distrigas in service,
and (b) Impact of retiring these facilities depends on response from other supply.