1 The Tres Amigas SuperStation Low Carbon Summit October 22, 2011

2 LARGE INTERCONNECTED AC TRANSMISSION SYSTEMS

3 Common Interconnected AC System Problems Long Distance Transmission Line losses System Voltage Stability/Levels Reactive Power Loading Steady state Transient Stability Subsynchronous Oscillations Latency issues (ie Spinning Reserves) Inductive and Capacitive limitation factors Interconnections Uncontrolled Load flow problems and bottlenecks – Congestion Issues – Inter Area loop flow – Cascading Blackouts Oscillation Stability Frequency control Voltage Stability Physical interactions between power systems Diminishing Returns with large interconnected AC Systems

4 Common Interconnected AC System Problems High Cost of Interconnections – Reliability Costs: NERC, RC, Relaying – N-1 criteria often creates underutilization of transmission lines – Complex coordinating arrangements (RTOs, IA, JOAs, etc.) – Need for sophisticated and costly system impact studies – Participation agreement complications with multiple impacted entities – Regional/Subregional perturbations/phenomena difficult and costly to analyze and manage – Deterministic planning practices do not capture the true economic value of transmission additions/upgrades

5 China: Current HVDC National Grid Plan

6 FUTURE EUROPEAN SUPERGRID 2016 – 2020

7 “ PRESENTLY, ONLY 30% OF ALL POWER GENERATED USES POWER ELECTRONICS SOMEWHERE BETWEEN THE POINT OF GENERATION AND END USE. BY 2030, 80%OF ALL ELECTRIC POWER WILL FLOW THROUGH POWER ELECTRONICS.” Power electronics moves beyond devices that simply provide increased awareness, such as Phasor measurement systems. These devices will respond to, interface with and control real time power flows. From USDOE Office of Electric Delivery and Energy Reliability

8 BENEFITS OF POWER ELECTRONICS Increased power system reliability and security Increased efficiency and loading of existing transmission and distribution infrastructure Huge gains in real time power flow control Improved voltage and frequency regulation Improved power system transient and dynamic stability More flexibility in siting transmission and generation facilities The distinction between consumer devices and utility devices will largely be eliminated electrically

9 21st century smart grid technologies compared with those in use today Source: IBM Institute for Business Value

10 Dispatch Equation Generation + Imports (or- Exports)=Load Generators (real time data is known) Ties (Import/Export) (real time data is known) Load is not measured in real-time (load forecasted) Transmission with predetermined limits (known with historical data) New Solution every 5 minutes (SCED) DISPATCH EQUATION

11 Data to Information

12 Hierarchical View of the Issues facing the European Transmission System Operators (TSOs) Single European Electricity Market Pan-European Transmission Grid Load-Generation Balance Congestion management Ancillary services Settlement Balancing Mechanisms Variable Renewable energy Generation Storage Demand Side Management Source: ENTSO-E: The pathway towards common European network operation

13 SUMMARY OF KEY CHALLENGES 1. Developing the next generation dispatcher tools to turn the vast volumes of real time data to meaningful information not only for power dispatch and control, but to also fully integrate all user devices or aggregating systems in the dispatch equation, develop predictive control in microseconds, provide trading and public information in minutes, perform forensic analysis in days. 2. A security regimen to continuously update to the challenges 3. More HVDC expertise in engineering and planning, including solving the multi- node HVDC buss issues.

14 Strategic Partners and Vendors Foundation Fuel