Regional Transmission Organizations Research Articles

Toward a physical Dodge City high voltage direct current (HVDC) electricity hub

A physical Dodge City high voltage direct current (HVDC) electricity commodity hub would foster the kind of risk transfer that would invite the full participation of the financial industry in an interstate transmission system essential to the speedy development of renewable electricity and complementary storage technologies. Obstacles lie in the way of such a vision, however. Chief among them, paradoxically, is the administrative system that has evolved since the late 1990 s to promote regional electricity markets. That system abstracts from investment risk and the nation’s uneven geography of renewable resources. It lodges a kind of monopoly planning and scheduling power in a small group of bureaucratic centralized system operators that mimics a command economy in their own distinct regions, not the kind of market economy that has traditionally driven investment in US interstate energy infrastructure. And yet, in dealing with the vexing transmission constraints faced by the renewable generating sector (the “queue”), the Federal Energy Regulatory Commission (FERC) continues to pursue ever greater authority for those regional transmission organizations (RTOs). Such FERC action regarding its RTOs in 2022–23 represents a highly evident case of path dependency—a problem—that state or federal policy makers wishing to speed the entry of large-scale renewable generation, and complementary storage technologies, will have find a way either to confront directly or to work around.

Optimal SOC Headroom of Pump Storage Hydropower for Maximizing Joint Revenue from Day-ahead and Real-time Markets Under Regional Transmission Organization Dispatch

Optimal SOC Headroom of Pump Storage Hydropower for Maximizing Joint Revenue from Day-ahead and Real-time Markets Under Regional Transmission Organization Dispatch

The role of electricity market design for energy storage in cost-efficient decarbonization

The role of electricity market design for energy storage in cost-efficient decarbonization

Economic evaluation of variable renewable energy participation in U.S. ancillary services markets

Variable renewable energy (VRE) is not yet meaningfully participating in U.S. ancillary services (AS) markets. VRE participation in AS markets could provide a new source of revenue for VRE resource owners to offset declining energy and capacity values and a new tool for power system operators to address emerging system constraints. This paper uses a price-taker dispatch model and historical prices to estimate the economic value of standalone and hybrid (battery-paired) VRE participation in AS markets, from the resource owner and electricity system perspectives, in each of the seven U.S. independent system operator and regional transmission organization (ISO/RTO) markets where ancillary service prices are set. Across ISO/RTO markets, average (2015–2019) simulated incremental revenues from power regulation market participation were $0.0–2.9/MWh (+0–15% of revenue without participation) for standalone VRE owners and $1–33/MWh (+1–69%) for hybrid VRE owners. However, ISO/RTO reserve markets are relatively thin and have the potential to become saturated by energy storage projects that are currently in ISO/RTO interconnection queues. In most markets, standalone and hybrid VRE could provide power regulation reserves during periods with high power regulation prices, suggesting that VRE participation in AS markets could have high system value. The analysis highlights the relevance of separate upward and downward power regulation products and indicates that ISOs/RTOs might consider initially focusing on enabling hybrid VRE provision of AS.

Transmission impedance control impacts on carbon emissions and renewable energy curtailment

Increased levels of renewable energy penetration have created new congestion patterns in recent years. Since the grid is not designed for the new patterns, the operators may need to curtail renewable energy to maintain transmission flows within acceptable limits. Transmission line impedance control, using flexible ac transmission system (FACTS) devices, has been proposed as an approach to relieve congestion in transmission systems and enhance renewable energy utilization. In this paper, we conduct a comprehensive study to provide insights on FACTS implementation’s impact on renewable energy integration and carbon emission reduction. The study considers variations in renewable energy penetration level, system loading patterns, location of renewable generation, and location of FACTS devices. Furthermore, generation mix data from prominent regional transmission organizations (RTO) are used to achieve more realistic results. Simulations studies are carried out on a modified RTS-96 system with a two-stage stochastic unit commitment model. The results show that, even though impedance control is effective in cost reduction, it has limitations in facilitating renewable energy integration in systems with prominent cheap fossil fuel power plants.

Intraday markets, wind integration and uplift payments in a regional U.S. power system

U.S. electricity markets adopt a two-settlement structure with day-ahead and real-time markets. Wind power integration poses a challenge for this market structure because day-ahead wind production forecasts are uncertain and significant rescheduling costs may occur in real time, increasing the need for out-of-market uplift payments. We investigate whether a multi-settlement structure with four intraday stages taking place 18 to 3 h before electricity generation reduces uplift payments and system costs, relative to a two-settlement structure. We develop unit commitment and dispatch models that account for intertemporal constraints and solve them on a 36-node test system using historical wind forecasts provided by a Regional Transmission Organization, as well as synthetic wind forecasts reproducing the observed correlation in the historical data. Combining historical and simulated forecasts allows us to account for wind uncertainty and draw more robust conclusions about the relative merits of each market structure. Finally, we compare the performance of market designs under varying levels of wind penetration. Under any level of wind penetration, the proposed multi-settlement market design is more likely to yield higher uplift than the two-settlement market design. Wind forecast accuracy and structural differences between the U.S. and European electricity markets are key drivers of our results.

Why capacity market prices are too high

The Federal Energy Regulatory Commission and regional transmission organizations have fixated on a concern that prices in electricity capacity markets are too low. In fact, however, capacity markets are significantly overpriced. The reason for this is that the administratively determined demand curves in capacity markets create conditions that procure far more electricity capacity than what is needed to meet reliability objectives. In particular, the operators of these markets systematically overestimate both the relevant peak demand for electricity and needed payments for generators to enter the market. The result is that consumer pay billions of dollars extra for excess capacity.

A Dynamic Behavior-Based Bulk Power System Event Signature Library With Empirical Clustering

The grid reinforcement, advanced grid stabilizing systems, and inverter-interfaced loads have varied power system dynamics. The changing trends of various dynamic phenomena need to be scrutinized to ensure future grid reliability. A dynamic behavior-based event signature library of phasor measurement unit (PMU) data has great potential to discover new and unprecedented event signatures. This paper presents an event signature library design that further defines more granular event categories within the major event categories (e.g., frequency, voltage, and oscillation events) provided by electric utilities and regional transmission organizations. The proposed library design embraces a supervised machine learning approach with a deep neural network (DNN) model and manually-generated labels. The input of the model uses representative PMUs that evidently express dominant event signatures. The performance of the event categorization module was evaluated, via information entropy, against labels generated automatically from clustering analyses. We applied the event signature library design to two years of over 1000 actual events in the bulk U.S. power system. The module obtains remarkable event discrimination capability.

Structural Power in Sustainability Transitions: Case Studies of Energy Storage Integration Into Regional Transmission Organization Decision Processes

Highly technical rules for regional electricity markets shape opportunities for new technologies and the pace of transition to a cleaner and more distributed power system. We compare three case studies of regional transmission organizations and identify common mechanisms that describe the relationship between institutional design and administrative policy decisions. We compare industry actors, old and new, across these case studies to better understand structural power and institutional stability through four mechanisms drawn from the literature: (1) self-reinforcing interests, (2) participation in and position of groups, (3) influence over communication and information, and (4) control over problem framing and pace of decisions. A focus on the mechanisms that operate within RTO governance provides insight into needed RTO governance reform.

An analysis of electricity congestion price patterns in North America

The present paper illustrates the use of principal component analysis (PCA) on the congestion component of local (i.e. zonal) electricity price data to detect the most salient congestion patterns in electricity transmission grids managed by either a Regional Transmission Organization (RTO) or an Independent System Operator (ISO). Outputs from the PCA along with some data visualization tools are shown to make the identification of such patterns seamless and straightforward. An empirical analysis is conducted for three North American power systems, namely NYISO, ISO New England and PJM. Finally, a simple time series model representing the evolution of PCA scores is proposed.

Air quality-related health co-benefits from Pennsylvania’s entry into the Regional Greenhouse Gas Initiative (RGGI)

BACKGROUND AND AIM: Climate policies can provide local health co-benefits by simultaneously reducing local and regional air pollutants co-released with greenhouse gas emissions. The Regional Greenhouse Gas Initiative (RGGI) is a regional cap and trade system that seeks to reduce CO₂ emissions from the electric power sector in eleven northeastern and mid-Atlantic states in the United States. Here we focus on Pennsylvania’s anticipated entry into RGGI in 2022. As a major power producer and carbon-emitter in the PJM interconnection (i.e., the Regional Transmission Organization that manages the wholesale electricity market in Pennsylvania and twelve other states), Pennsylvania’s participation affects both the PJM electricity market and the RGGI carbon market. METHODS: By combining a power system model of PJM with a reduced form model of CO₂ emissions abatement from RGGI states that are not in PJM, we first simulate the effects of Pennsylvania’s participation in RGGI on electricity market outcomes, CO₂ emissions, and other local and regional air pollutants. We then use a range of marginal damage estimates derived from reduced-form air pollution models to monetize air quality-related health impacts. RESULTS:Comparing the scenarios with and without Pennsylvania’s participation in RGGI, we find the annual average power sector CO₂ emissions in Pennsylvania to be 40% lower from 2022 to 2030. During the same time period, the annual emissions are 79%, 68% and 76% lower for SO₂, NOx and PM2.5 emissions, respectively. Such a reduction in co-emitted air pollutants leads to cumulative health co-benefits of $17.7 billion to $40.8 billion. However, the reduced emissions and health damages in Pennsylvania are slightly offset by increases in the other states in PJM that do not participate in RGGI. CONCLUSIONS:Our study highlights the large potential for health co-benefits from Pennsylvania’s entry into RGGI, though the cross-state leakage issue requires careful consideration in the policy design and implementation process. KEYWORDS: Air pollution, climate, health co-benefits, policy

Opportunities for installed combined heat and power (CHP) to increase grid flexibility in the U.S.

Increasing use of renewable energy requires sufficient grid flexibility to address uncertainty and variability in electricity generation. Previous studies suggest that combined heat and power (CHP) systems may support grid flexibility but they do not consider operating hours. In this paper, we used CHP operating data and determined annual and monthly availability of the installed CHP capacity from various sectors (e.g., utility, independent power producer, commercial, and industrial) in all seven U.S. independent system operators (ISOs) and regional transmission organizations (RTOs). Also, we estimated hourly CHP availability installed in five facility types (i.e., hospitals, universities, hotels, offices, and manufacturing) in the state of New York. The results show that regardless of ISO/RTO, sector, or season, more than 40% of the installed CHP capacity (0.7–8.7 GW) was not fully utilized in 2019; the results are similar for 2018. This available CHP capacity accounted for up to 9% of the ISO/RTO's peak electric demand, which may yield cost savings up to $16 billion by avoiding installation costs of new natural gas combustion or combined-cycle turbines. To exploit the available CHP capacity to enhance grid flexibility, we recommend different policy implications including flexible contract lengths between CHP owners and grid operators, improved market designs, and simplified interconnection standards.

Toward carbon-neutral electricity and mobility: Is the grid infrastructure ready?

Toward carbon-neutral electricity and mobility: Is the grid infrastructure ready?

Energy Market Complexities and the Need for Certainty

As many of this Journal's readers are aware, the Federal Energy Regulatory Commission (FERC) is an independent agency organized within the US Department of Energy (DOE). Simply stated, FERC is responsible for regulating the interstate transmission of natural gas, petroleum, and electricity and for overseeing the establishment of just and reasonable rates for wholesale electricity sales of Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs). Sounds straight forward at first blush, but there is nothing simple about FERC's role. And, FERC's importance in energy infrastructure development and market operations cannot be overstated. As the nation and many states pursue aggressive decarbonization and clean energy goals, FERC's role in energy project permitting and compliance, and wholesale market operations is critically important. FERC can provide the leadership necessary to support private sector investment in infrastructure development and in fair market valuation and pricing of assets in energy markets. Coupled with federal and state funding and policy support, a clear and decisive role by FERC could provide the certainty investors need for committing capital to clean energy and decarbonization investments.

The Legal and Administrative Environment for Pennsylvania’s Bid to Join RGGI

In 2019, Pennsylvania Governor Tom Wolf ordered the Pennsylvania Department of Environmental Protection (DEP) to “develop and present to the Pennsylvania Environmental Quality Board [EQB] a proposed rulemaking package to abate, control, or limit carbon dioxide emissions from fossil-fuel-fired electric power generators” under the Pennsylvania Air Pollution Control Act (APCA). The rulemaking contemplated by the order would accomplish this end by, among other things, establishing a cap-and-trade system for carbon dioxide that can be integrated with other states’ cap-and-trade programs under the Regional Greenhouse Gas Initiative (RGGI) model rules. The order also asked DEP to work the Pennsylvania Public Utility Commission and the regional transmission organization encompassing all of Pennsylvania (PJM Interconnection) to “promote the integration” of the PA cap-and-trade rules in a “manner that preserves orderly and competitive economic dispatch within PJM and minimizes emissions leakage.” Almost immediately after the order, speculation began about potential legal barriers to achieving the goals set out by Governor Wolf. This white paper closely examines a set of legal questions that are likely to arise in litigation about DEP’s and EQB’s authority and discretion to promulgate rules in accordance with the order under existing laws. While it is difficult to anticipate exactly what kinds of challenges might emerge, especially since DEP has not yet finalized its approach, in general the challenges will likely emerge in four categories of issues : First, it is likely that arguments will be made that PA’s cap-and-trade system would be an unconstitutional tax on electric power generators, either because it imposes a carbon budget with financial consequences for affected firms that choose to comply by implementing carbon dioxide mitigation measures or because allowance auctions would result in financial payments by affected firms to come into compliance through the purchase of allowances. Such a “tax,” promulgated by the EQB, might be argued to violate the Pennsylvania separation of powers principle because it amounts to executive taxation. Second, even assuming that PA’s cap-and-trade is not an unauthorized tax, arguments may be made that a cap-and-trade program for carbon dioxide is not within the scope of delegated rulemaking authority under the APCA, and that EQB could only promulgate such a program with new authorizing legislation. Again, this would be framed as a violation of the Pennsylvania separation of powers principle. Third, separate and apart from the issue of whether carbon dioxide allowance auctions may be considered an unauthorized tax or beyond the scope of legislative authorization, arguments may be made about the precise scope of DEP’s authority to collect the revenues from auctions and use it for particular programmatic purposes. Finally, to the extent that DEP and EQB eventually integrate measures designed to minimize emissions leakage across state lines, challengers may argue that the regulations violate the Dormant Commerce Clause of the U.S. Constitution by impermissibly discriminating against inter-state commerce and trade. This white paper provides essential background understanding for each of these potential disputes, analyzes the potential arguments that might be leveraged for or against the agencies’ authority and discretion to create a robust cap-and-trade system without any additional legislative action, and concludes that the agencies have ample authority under existing law to create the program and join RGGI. The analysis focuses on Pennsylvania law and U.S. constitutional law, but also draws heavily from a survey of relevant New York laws, as New York is the only other state to have entered RGGI administratively, making it a particularly useful comparison for Pennsylvania’s attempt to do the same. It also draws more generally on state authorities from California, Delaware, New Jersey, and other states, but these treatments of cap-and-trade systems are not directly controlling in Pennsylvania and have only persuasive value.

Reforming FERC’s RTO/ISO stakeholder governance principles

The Federal Energy Regulatory Commission (FERC) has not provided detailed guidance on Regional Transmission Organization (RTO) and Independent System Operator (ISO) governance since Order 719 in 2008; meanwhile, markets have evolved considerably. This article reviews past FERC orders to identify explicit and implied governance principles and criteria to achieve those principles, then proposes additional principles and criteria based on governance problems in PJM Interconnection (PJM). Specifically, a Fair Representation Principle is developed in response to PJM member sectors failing to reflect member diversity, low member participation rates, and inadequately defined state roles. The Neutrality Principle is proposed to address structural and administrative bias, and lack of public transparency. FERC must also expand all governance principles – including the existing Independence and Responsiveness Principles – to apply to all RTO/ISO members and non-member stakeholders, not just market participants. A methodical review of governance issues in all RTO/ISO should inform future FERC-level action, and FERC should regularly evaluate RTO/ISO governance processes to prevent stale governance rules from frustrating the goals of competitive markets. Governance reforms have the potential to improve the public legitimacy of decisions emanating from RTO/ISO stakeholder processes; however, reform supporters shouldn’t view this as a panacea to all the challenges facing the contemporary RTO/ISO.

Increasing DER integration through discrete intraday settlements

Deployment of distributed energy resources (DERs) is accelerating across the United States. These assets have the potential to provide cost-effective grid services and bulk power while supporting a low-cost energy transition to carbon-free electricity. Full integration of these resources into the bulk power system remains a barrier to unlocking the potential value of these assets. The regional wholesale energy markets, originally designed to integrate centralized, dispatchable power plants, must be reformed to adapt to the changing potential resource mix. The current day-ahead and real-time system is poorly designed for DERs. Day-ahead DER forecast errors create exposure to real-time price variations, as resources committed in the day-ahead market are required to rebalance in real-time, challenging the business model for DERs. New intraday markets with multiple discrete intermediate auctions between the day-ahead market and real-time market are needed to enable proper integration of DERs and efficient mitigation of forecast uncertainty risk. These markets must incorporate financially-binding commitments, closer-to-dispatch price signals, and adequate liquidity to ensure competition. Intermediate auctions should be built on top of existing intraday processes in each regional market, incorporating the principles of the existing market structures and leveraging the benefits of the centralized dispatch systems. Regional transmission organization (RTOs) and Independent System Operators (ISOs) should pursue and implement intermediate auctions to support fair, open, and efficient markets in the U.S.

The Federation: Enabling interregional electric transmission development and operation

The electric utility industry in the United States continues to seek lower costs by employing increasing amounts of low-cost wind and solar energy. Some states are continuing to require utilities to increase the use of renewable energy in accordance with governmental policy.But as solar and wind resources become an increasingly important share of the power supply portfolio, the result can be serious negative operational impacts on system reliability. Some systems have begun to experience rolling backouts as a result.11Sammy Roth, California Blackouts are Public Utilities’ Commission’s Fault, Grid Operator Says, The Los Angeles Times, August 17, 2020. These rotating blackouts of course create high levels of customer dissatisfaction.Such loss of reliability and customer satisfaction must be addressed. Society will accept neither rotating blackouts nor significantly higher costs. Meanwhile, it still wants 100 % clean energy. How to reconcile these three goals at the same time? The problem is not the increasing levels of renewables. It is just that our utility business models have not evolved to effectively take advantage of them as the industry continues to use renewables to displace fossil-fueled resources.This article describes a new, innovative, and productively disruptive business and operating model that can enable high voltage direct current (HVDC) interregional transmission and the “macrogrid” it represents. Together, they can address the reliability shortfalls by improving the contributions to reliable generating capacity of ever-increasing levels of wind and solar while preserving their economic and environmental benefits.Founded on the principles of continued service reliability, lower costs and lower carbon emissions, the new model does not require a cogent federal energy policy (although that would certainly be useful) or the merging of current Regional Transmission Organization (RTO) or Independent System Operator (ISO) wholesale markets.The approach requires a new business model to position the participants for success in this changing market. It uses a small number of utilities, developers and states voluntarily joining together as coalitions of the willing in their own mutual self-interest. Using interregional HVDC transmission, it would aggregate at the wholesale level widely dispersed, time-diversified renewable energy sources, combine them with energy storage and other firming resources, and offer renewable energy products with various specific levels of reliability and associated prices to the wholesale markets. It would redistribute renewable energy surpluses and deficits caused by their otherwise non-dispatchable intermittency and make their aggregated capacity more reliable.The new business model is called the Federation.

Study on Power System Planning Modes under Market Environment at Home and Abroad

Electricity market reform has long been a global development trend, and has achieved good benefits in European and American countries due to their earlier marketization driven by the economic development. By studying the typical power system planning process of foreign countries with mature electricity markets, this paper figures out the general mode of power system planning under the market environment: The power source planning is decided by the generators who shall assume sole responsibility for own profits or losses, and the power network planning is generally made by market regulators or regional transmission organizations.

An Analysis of Electricity Congestion Price Patterns in North America

The current paper illustrates the use of principal component analysis (PCA) on the congestion component of local (i.e. zonal) electricity price data to detect the most salient congestion patterns in electricity transmission grids managed by either a Regional Transmission Organization (RTO) or an Independent System Operator (ISO). Outputs from the PCA along with some data visualization tools are shown to make the identification of such patterns seamless and straightforward. An empirical analysis is conducted for three North American power systems, namely NYISO, ISO New England and PJM.