Distribution System Operator (DSO) Construct as a Bridge for End-to-End Transactive Operation

Distribution System Operator (DSO) Construct as a Bridge for End-to-End Transactive Operation Farrokh Rahimi, Ph.D. Senior Vice President Market Design and Consulting Ali Ipakchi, Ph.D. Senior Vice President Smart Grid and Green Power GWAC/CAISO Meeting and Workshop Lake Natoma Inn, Folsom, CA September 10-11, 2014

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Topics Opportunities and Challenges for Demand-Side Participation in End-to-End Transactive Operations The DSO Concept: Bridging Bulk Power and Prosumer Side Operations DSO Roadmap and Enabling Technologies Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc. 3

Problem Formulation Changing Electric Industry Paradigm Increasing use of renewable energy at bulk and distributed New technologies Increased demand-side capabilities Bidirectional Flow of Energy, Information, and Money Utility Perspective Explore new products and services to compensate for loss of revenue due to distributed customer side resources Revise operational procedures to maintain distribution system reliability in the face of distributed Demand Response/Distribute Energy Resource (DR/DER) Leverage distributed resources (including DR/DER, storage) to create derivative tradable products for bulk power/market operation Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc. 4

Problem Formulation (Continued) Balancing Authority/ISO/RTO Perspective Need for increased/new products and services (regulation, ramping, load following, etc.) to maintain bulk power operation Need to rely on demand-side assets to participate in providing such products and services to reduce need for conventional generation How to ensure DR/DER will perform Consumer Perspective Resiliency (MicroGrids) Economic/Transactive Opportunities (MicroGrids, Building Energy Management Systems, HAN, Intelligent Devices, etc.) Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc. 5

End-to-End Operational Transactions ISO and Wholesale Markets Day-Ahead Real-Time Trans. Constraints Wholesale Prices and Energy Ancillary Services Capacity DR, Ancillary Services Legend Data Pricing Electricity Bulk Power Operation DR Info. and Dist. constraints Settlement Charges Supply Distribution System Direct Load Control Retail Prices Supply and Demand Response Customers Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc. 6

Linking Demand-Side Capabilities to Wholesale Operations Virtual Power Plant (VPP) Construct Bulk Power Products Hour-Ahead Firm Non Spin Spinning Reserves Market-Based Prices Virtual Power Plant Grid Location P MAX, P MIN Ramp Rate Min/Max Up and Down Time Incremental Cost Curve Capability Data Telemetry Dispatch Instructions Retail Tariff Direct Load Control Time of Use Critical Peak Price Dynamic Pricing Commercial and Industrial Curtailment Contracts Etc. Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc. 7

Consideration of Power System Characteristics for End-to-End Operation Power system characteristics can impact delivery of transacted quantities from distributed DR/DER assets Reactive power/voltage impacts Phase unbalance impacts Impact of distribution losses Impact of distribution congestion Bulk Power/Wholesale Operator is oblivious to such distribution system impacts associated with its DR/DER resource scheduling and dispatch Distribution Management Systems (DMS) can help determine such impacts Distribution System Operator (DSO) can act as facilitator to ensure such impacts are avoided or mitigated Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc. 8

Example: Distribution Grid Volt/Var Effect on Available DR Use Case Feeder Voltage: 13.8 kv Feeder Base Load: 9 MW with Unity Power Factor: 3 MW Constant Impedance (Z); 3 MW Constant Current (I); 3 MW Constant Power (P) Participating DR: 900 kw with 0.8 Lag Power Factor Remaining load after deployment of DR: 8,100 kw with Lead Power Factor Feeder Voltage Increase due to Lead Power Factor: 1.5% Increase in base load due to voltage increase: 135 kw Net Demand Reduction: 900-135 = 765 kw Voltage Increase (%) Z Load I Load P Load Total 1.5% 3% 1.5% 0% 90 kw 45 kw - 135 KW Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc. 9

Example: Operational Impact of Phase- Unbalanced DR Use Case: Feeder Voltage: 13.8 kv Feeder Base Load: 9 MW phase-balanced (3 MW per phase) Participating Demand Response: 900 kw with different amounts on each phase: 300 kw on Phase A; 100 kw on Phase B; 500 kw on Phase C For simplicity, assume both the base load and the DR are unity power factor When the 900 kw DR is deployed, the remaining load will no longer be phase-balanced This results in neutral current and losses for the remaining load; thus reducing the effective DR For a system operator, it is important to know the expected effective DR beforehand With 1% Neutral Losses for Remaining Load, Net Demand Reduction: 900-1%*8,100 = 819 kw Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc. 10

200 180 160 140 120 100 80 60 40 20 - Operational Impact of Phase-Unbalanced DR (Continued) Phase C 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 50 kva Single Phase Residential 25 kva 25 kva 138 kv Substation 12.47 kv 400-A peak 600-A emergency Feeder rating 21 MVA 138/12.47 Voltage Regulator Single Phase Residential Lateral 1.5 MVA 120 A Fuse Primary Feeder 25 kva Secondary Distribution 50 kva 12.47kV/220V Phase A 200 180 160 140 120 100 80 60 40 20-1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Three-Phase Residential Three-Phase Residential Lateral 1.5 MVA Recloser Single Phase Residential 50 kva 12.47kV/208Y/120 Three Phase Commercial Lateral - 2 MVA 5 MVA 12.47 kv 1 MVA 12.47kV/4160/480V 1.5 MVA 12.47kV/4160/2.4kV Open Tie Neutral current for 10% phase unbalance 3000/2700/3300 kw Neutral current for 10% DR phase unbalance 300/270/330 kw Neutral current for 20% DR phase unbalance 300/240/360 kw DR release: Neutral current for 10% phase unbalance 1200/1080/1320 kw 150 A 7.5 A 15 A 87 A Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc. 11

The DSO Construct Linking Bulk Power and Distributed Resource Operations DSO to ISO/RTO Forecast Net Load and Dispatchable Products Schedules and Bids Metering and Telemetry DSO Functions Distribution Planning Distribution Reliability Operations Scheduling Forecasting (Load, DR, DER) Scheduling (DR, DER, Market) Dispatch and Real-Time Control Retail Metering and Settlements Retail Market Administration ISO/RTO to DSO Schedules Dispatch Instructions Prices Settlements Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc. 12

DSO Construct Basic Responsibilities Distribution System Planning Distribution System Reliability/Protection Possible Responsibilities as Linkage Between Bulk Power/Wholesale and End-Use/Retail Market Operations Scheduling Forecasting and Availability Assessment (Load; DR; DER) Aggregation; Virtual Power Plant Creation (Aggregation of distributed demand-side capabilities for provision of different products such as Energy, Ancillary Services, Flexible Ramping, etc.) Scheduling/Bidding into Wholesale Market Dispatch and Real-Time Control DR/DER Resource Dispatch Real-time Control Interchange Management (MSS or Pseudo-BA function) Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc. 13

DSO Construct (Continued) Possible Responsibilities as Linkage Between Bulk Power/Wholesale and End-Use /Retail Market (continued) Metering and Settlements Interval Metering Measurement and Verification Settlement with Bulk Power/Wholesale Market Operator Settlement with DR/DER asset operators Retail Market Administration DR/DER Programs DR/DER offers (single buyer) Bilateral DR/DER (Full Transactive) Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc. 14

Different DSO Models DSO-Lite Reliability & Protection Pseudo BA DSO Reliability & Protection Planning Forecasting & Scheduling Planning Forecasting & Scheduling Settlements Dispatch & Control Settlements Dispatch & Control Retail Market Retail Market Comprehensive DSO Reliability & Protection Maximalist (Fully Transactive) DSO Reliability & Protection Planning Forecasting & Scheduling Planning Forecasting & Scheduling Settlements Dispatch & Control Settlements Dispatch & Control Retail Market Retail Market Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc. 15

Functions Functionality Timeline Timeframes Months Ahead Days Ahead Hours Ahead Real-Time Post Operations Planning & Resource Adequacy Forecasting Market/TE Facilitation Scheduling Dispatch & Control M&V and Settlements Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc. 16

DSO Key Application Requirements Customer Service Resource & Market Operations Grid Operations Bulk Power Interfaces Forecasting Billing & Settlements CIS Scheduling & Dispatch Retail Market/TE Facilitation GIS OMS MDMS Distribution Assets and Operations Data DERMS DMS Field/Customer Interfaces AMI End-Use Customer Portal R-SCADA D-SCADA Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc. 17

Illustrative Example S5 S6 S7 S13 S16 S17 S9 S8 SubStation-B 32 MVA 138-12.46 kv S15 S4 S12 S18 SubStation-A 32 MVA 138-12.46 kv S1 S20 S2 S14 S10 S11 S3 Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc.. 18

Distribution Switching Operation S5 S6 S7 S13 S16 S17 S9 S8 SubStation-B 32 MVA 138-12.46 kv S15 S4 S12 S18 SubStation-A 32 MVA 138-12.46 kv S1 S20 S2 S14 S10 S11 S3 Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc.. 19

Changing Load and Voltage Profiles S5 S6 S7 S13 S16 S17 S9 S8 SubStation-B 32 MVA 138-12.46 kv S15 S4 S12 S18 SubStation-A 32 MVA 138-12.46 kv S1 S20 S2 S14 S10 S11 S3 Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc.. 20

Distribution Congestion Management S5 S6 S7 S13 S16 S17 S9 S8 SubStation-B 32 MVA 138-12.46 kv S15 S4 S12 S18 SubStation-A 32 MVA 138-12.46 kv S1 S20 S2 S14 S10 S11 S3 Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc.. 21

Distribution Congestion Management S5 S6 S7 S13 S16 S17 S9 S8 SubStation-B 32 MVA 138-12.46 kv S15 S4 S12 S18 SubStation-A 32 MVA 138-12.46 kv S1 S20 S2 S14 S10 S11 S3 Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc.. 22

DSO - New Application Requirements Customer Service Resource & Market Operations Grid Operations Legend: Conventional New Bulk Power Interfaces Forecasting Billing & Settlements CIS Scheduling & Dispatch Retail Market/TE Facilitation GIS OMS Distribution Assets and Operations Data MDMS DERMS DMS+ End-Use Customer Portal AMI R-SCADA D-SCADA Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc.. 23

DSO as Retail/Transactive Facilitator Balancing Authority (ISO/RTO/Market Operator) Bids and Offers; Forecasts Dispatch Instructions Balancing Authority (Transmission Operator) Availability; Forecasts Deployment Instructions TX Substation TX Substation TX Substation TX Substation BEMS DSO BEMS BEMS DSO BEMS HAN HAN HAN HAN µgrid µgrid µgrid µgrid µgrid µgrid Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc. 24

Challenges and Opportunities Challenges Regulatory barriers Operator acceptance Free rider concerns Cost shifting concerns Opportunities The DSO construct helps promote use of preferred resources and avoid disruptive operational impacts The DSO construct supports Transactive Energy roadmap There are no technological barriers for implementation of fully transactive (maximalist) DSO Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc. 25

Concluding Remarks Electric industry landscape is changing due to proliferation of renewable resources and active demand-side participation Emerging technologies help improve efficiency and reduce environmental impacts of energy production and consumption, but create operational problems Preferred Resources (efficiency and environment viewpoints) Disruptive Technologies (operational viewpoint) The DSO construct helps promote use of preferred resources and avoid disruptive operational impacts The DSO and Transactive Energy roadmaps have important touch points in the emerging industry landscape There are no technological barriers for implementation of fully Transactive (maximalist) DSO Regulatory barriers do exist. DSO scope increases as regulatory barriers are lowered Proprietary and confidential. Do not copy or distribute without permission from OATI. 2014 Open Access Technology International, Inc. 26

Questions

Thank You Farrokh Rahimi Ali Ipakchi sales@oati.net 763.201.2000