Modernizing the Electricity Grid MILESTONES

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1 Modernizing the Electricity Grid MILESTONES

2 Altamont Pass Wind Farm, Alameda County, California

3 INTRODUCTION The California Independent System Operator (ISO) has been recognized for its innovation in reliably operating the grid while integrating record amounts of renewable resources. The ISO is committed to greening California s grid by finding new ways of balancing intermittent resources, establishing a new real-time market across the West that optimizes resources while lowering costs, and developing technologies that can balance supply with demand in today s fast-changing energy landscape. Working in collaboration with state agencies and stakeholders, the ISO has made significant strides since 2014 in modernizing the grid, improving system reliability, protecting the environment, incorporating advanced technologies, and enhancing energy market performance. California ISO headquarters in Folsom, California

4 THE ISO ON... GRID RELIABILITY A reliable, stable grid is the ISO s most critical objective. Without it, no other goals, no matter how valuable, can be accomplished. Grid operations must follow strict guidelines to ensure the transmission system remains stable at all times. Fluctuating weather conditions complicate this work, as does the unpredictability of equipment failures and natural disasters that threaten transmission lines or force generating units offline. Based on metrics used to measure consistent grid reliability, the ISO performed well since ISO s backup operations center in Lincoln, California, improves operations, and is designed to respond during an incident if the Folsom control center is unavailable. The ISO s experienced operations staff have consistently maintained reliability and compliance standards while meeting fluctuating demand. The ISO has operated with no system operating limit violations since November The ISO also made significant enhancements to grid reliability since 2014, including: Improved emergency communications and business continuity processes The ISO improved emergency responses internally and externally while testing its ability to stay online during a catastrophic event with full-scale simulations. The ISO also built a new backup center that can perform all critical grid functions. Coordination of natural gas resources Following the Aliso Canyon Natural Gas Storage Facility leak, the ISO and its partners developed advanced forecasts on gas needs, and reserved transmission capacity to avoid power interruptions. The ISO also developed a sophisticated software program to limit gas use when supplies are low.

5 The ISO developed a process to validate power flows and behaviors, and Solar field installation in Rosamond, Kern County, California shared the process with participating transmission owners and planners to establish consistent data use. The updated models are included in the transmission planning cycle. The Great American Eclipse The ISO s ability to manage the grid reliably was on full display during the August 21, 2017 Great American Eclipse. The ISO, utilities, generators, and state energy agencies began planning a year in advance on managing the loss of solar generation during the eclipse, which saw solar output drop by 55 percent, or 3,500 megawatts (MW) at the eclipse apex. That does not include the loss of an estimated 1,500 MW of rooftop solar not connected to the grid, which increased demand on the ISO system. Imported energy, such as hydropower, replaced most of the solar production loss. As the eclipse waned, the ISO effectively managed stress on the grid as solar production increased rapidly, ramping as much as 150 MW per minute until leveling off to normal rates of 70 to 90 MW a minute. Megawatts 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 Solar dropped by 55% or 3,500 MW (does not include loss of rooftop solar ~1,500 MW) Renewables - August 21, 2017 Solar Wind Hydro Thermal 1:00 3:00 5:00 7:00 9:00 11:00 13:00 15:00 17:00 19:00 Hour

6 THE ISO ON... THE ENVIRONMENT The electric system in the West is undergoing a historic transformation. Ambitious environmental policies, regulatory changes, consumer demands and advanced emerging technologies are reshaping the types of resources and the operational strategies to meet demand. Over the past several years, the ISO supported this transformation by integrating higher amounts of renewable resources while maintaining system stability. Here are some of the ISO s major accomplishments in greening the grid: Exploring a Regional Energy Market An ISO study, mandated by state legislation to examine the benefits of a regional energy market, found that an expanded, multi-state energy market in the western United States could help the state meet, and even exceed, its current green energy policies while saving consumers up to $1.5 billion annually. Tehachapi Pass Wind Farm, Kern County, California Studying time-of-use rates for consumers The ISO teamed with state agencies to align time-of-use periods with a growing portfolio of renewable resources, and proposed a timeframe for providing price signals to consumers. Proved renewable resources can provide reliability services In the most extensive testing of its kind worldwide, the ISO and its partners discovered that solar generators can offer reliability services such as frequency control, voltage control, and ramping capacity. This creates new opportunities to stabilize the grid using primarily renewable sources to power our economy. PATHWAYS study The ISO worked with state agencies to evaluate avenues for reducing greenhouse gas emissions in California. The study focused on increasing energy efficiency by switching to lower carbon fuel sources for buildings, transportation and electric generation. Expanding the grid across the western U.S. could allow the state to meet or exceed current green energy policies save consumers up to & $1.5 billion annually

7 Enhanced greenhouse gas emissions accounting The ISO implemented accounting for greenhouse gas emissions from energy resources serving California load. Distributed Energy Resources (DER) market participation In 2015, the ISO adopted a groundbreaking policy allowing DERs to aggregate and participate in the ISO markets. The ISO is now helping to develop a microgrid roadmap for California. Measuring system-related greenhouse gas emissions The ISO launched a new webpage showing CO 2 emissions associated with serving ISO load. Greenhouse gas emissions in the ISO footprint has dropped almost 23 percent since Regulators set the storage target at 1,325 MW in 2013 storage interconnection requests 121 have been submitted to the ISO Energy Storage and DER The ISO made changes to its rules, market products and models to allow more energy storage and distributed energy resources (ESDER) to participate in the ISO market. Modified metering rules The ISO updated its metering rules to accommodate the growth in renewables, energy storage, DERs, and the western EIM, to reduce costs and provide flexibility. Identified oversupply and ramping concerns The ISO helped define the Duck Curve to highlight the oversupply phenomenon, and established a Managing Oversupply webpage to track overproduction and curtailment trends. mtco 2 (millions) Electricity sector CO 2 emission trends Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Energy Storage Roadmap The ISO has set interconnection rules for storage, and helped develop the California Energy Storage Roadmap to integrate storage projects onto the grid. 23% Reduction in CO 2 EMISSIONS since 2014

8 THE ISO ON... MARKET IMPROVEMENTS As the grid evolves and markets expand, it is important that the ISO continues to build the confidence of stakeholders, participants, and policy makers in the performance, quality, and integrity of the ISO market. Here are some of the improvements made since 2014: Streamlined market operations The ISO has overseen a significant drop in market price corrections, settlement disputes and resolution time, and real-time congestion costs, key indicators of a healthy and efficient market. Market design changes Improving fair cost allocation principles to support transparent, accurate, and timely price signals to reflect grid conditions, while minimizing manual plant dispatches. Bidding rules enhancements Refined the calculation of cost for a generator to run at minimum load. Aliso Canyon mitigation Better coordination of the market with gas supplies and procurement, reducing curtailment and electricity outages. Financial settlement rules Modified to ensure variable resources, such as wind and solar, are treated fairly. Capacity procurement Replaced with a market-based competitive solicitation process. Generator modeling Fine-tuned to ensure forecasted demand is served at the lowest cost. Using renewables to integrate renewables Allows renewables to maintain grid reliability, a job traditionally handled by natural gas resources. Working with neighbors Reduced barriers between neighboring balancing areas to enable more robust bids to import and export energy. California ISO control room in Folsom, California

9 THE ISO ON... TECHNOLOGY Advanced technology is key to maintaining grid reliability and creating a sustainable low-carbon electric system. The ISO is a leader in taking advantage of new technology and updating software. California ISO control room in Folsom, California Developed visualization tools Critical for grid operators to see system conditions for improved situational awareness. Integrated voltage stability and dynamic security Gives operations engineers forwardlooking information and improved grid information. Synchrophasors Expanded synchrophasors reporting capabilities to give precise condition data at a faster rate. New market displays New system monitoring screens give operators more accurate information on the impact of demand response on the grid and helps incorporate rooftop solar into market forecasts. Lower cost telemetry solutions Now offering distributed energy resources, such as rooftop solar and electric vehicle aggregators, a lower cost telemetry solution. Balancing and ramping requirements Developed tool to measure when fast ramping is needed. Forecasting Now forecasting for every balancing area in the Western Electricity Coordinating Council s 14-state area in the day-ahead market, and for EIM balancing areas in the real-time market. Pilot projects Over the past several years, the ISO has worked with several stakeholders on pilot projects to accommodate demand response and electric vehicle aggregations, and pump load participation in the ISO market. Full Network Model Improved day-ahead and real-time market results by extending the transmission network model beyond the ISO footprint. Improved market software performance, including workflow, data storage, and processing. The ISO has implemented more than 50 software architecture improvements to add redundancy to key systems.

10 THE ISO ON... CUSTOMER SERVICE As part of our commitment to serve our customers, the ISO has worked to educate and inform our stakeholders, while improving their access to technical resources, policy developments and training. The ISO conducts stakeholder calls, webinars, workshops, surveys, focus groups, and personal interviews, and hosts an annual stakeholder symposium, one of the largest gatherings of energy experts in the West. The ISO has also invested in its electronic platforms, including its web and social media presence. These recent improvements are aimed at boosting transparency, access, and information sharing, and encourage direct engagement and customer self-service. The ISO s annual Stakeholder Symposium is a premier forum in the West for sharing ideas and engaging customers. The two-day event hosts 1,000 attendees and is streamed live. California ISO s Board of Governors panel at the 2017 Stakeholder Symposium Customer service The ISO shortened resolution time of customer issues, extended its issue-tracking tool to other business units, and crafted knowledge articles to explain key issues to stakeholders. Increased transparency The ISO increased access to teleconferences by posting audio recordings of public meetings on its website, and formed customer partnership groups that allow stakeholders to help shape product design and improvements. Customer training -- The ISO launched a new computer-based training program that had more than 1,300 users in The training program also helped more than 150 new participants learn how to navigate energy markets, planning, operations, settlements, and resource interconnections. Resource Interconnection Fair -- A yearly meeting provides information on connecting resources to the grid and participating in the wholesale energy market.

11 Today s Outlook The ISO updated its most visited webpage to include current electricity demand and supply totals, emissions levels, and real-time wholesale prices. Twitter following has TRIPLED since 2014 Legislative/state agency outreach The ISO collaborates with state agencies, the governor s office, and legislators to develop roadmaps and studies on a vast array of energy-related topics, including demand response, energy efficiency, electric vehicles, energy storage, low-carbon pathways, and renewable integration. The work builds healthy engagement and a common vision for state leaders to achieve the green grid of the future. Over 400,000 page views in 2017 Other web improvements or additions Added or refreshed pages to include the Monthly Renewables Performance Report, Monthly Statistics, Managing Oversupply, News, etariff Viewer and Dynamic Transfers. Western Energy Imbalance Market Created a dedicated website, for utilities across the West to use and learn about participating in the ISO s real-time market. Includes information on the governing body, a meeting calendar, and resources for existing EIM participants. ISO Today mobile app has 25,000 downloads Flex Alert The ISO s voluntary conservation program directly reaches 28,000 consumers through its subscription notification service, triggered during times of stress on the electricity grid. Many more Californians hear about the alert through the media or social media channels, and join in the conservation effort. The program has been credited with reducing electrical demand by up to 500 MW a day. Tours improve access to grid information The number of public tours of its Folsom headquarters rose 34 percent from 2016 to 2017, part of an effort to educate visitors and engage the public. Nearly 200 groups toured the ISO campus in 2017 with over two-thirds of those from foreign countries.

12 250 Outcropping Way, Folsom, CA