Jim Mcintosh Director, Executive Operations Advisor California ISO Independent Energy Producers 2011 Annual Meeting - October 5, 2011 Stanford Sierra Conference Center – Fallen Leaf, CA It’s A 60 Hertz World: Renewable Integration

1 The Challenges For Grid Stability Variable generation short term forecasting Generation fleet characteristic changes – synchronous to asynchronous Maintaining capacity with fast ramping, fast start capacity, inertia, frequency response Maintaining capacity with regulation, load following and operations reserves Maintaining capacity with dynamic voltage and var control Reliability with fewer gas powered plants to maintain grid stability Cost containment – update on increased regulation and operating reserves We need to strike a balance between reliability, renewables, and reasonable cost to keep the grid stable and reliable. CAISO “The Physic’s Police” – Jan Smutny- Jones, 2009

MW The 2-3 year look-ahead: renewable resource portfolios in 2006 and 2012 (20% RPS), by capacity (MW) 2

The ISO grid control room faces significant short- and long-term challenges Uncertainty of grid infrastructure development Ramping requirements significantly increased Continued improvement of control room tools Load and wind short term forecasting accuracy Rapid changes in grid generation fleet, especially wind and solar technologies 1. Wind and solar variability will be a significant issue by Synchrophasors are the most significant advancement in control center technology in the last 30 years. 3

New record wind production About 40 mws Each cell is 2 hours Day ahead schedule Green is actual production 4 Wind Variability in 2011

Photovoltaic Plant Output on a Partly-Cloudy Day 10 Second Sample – March 25,

6 July 3 rd Solar Event – 65% Production Drop 8 a.m.9 a.m.10 a.m.11 a.m.12 p.m.1 p.m.2 p.m.3 p.m.4 p.m Dropped 65% in 40 minutes to

Requirements for Integration of Renewables Resources Required for Renewables Integration Quick Start Units Fast Ramping Wider Operating Range (lower P min ) Regulation capability Shift Energy from off-peak to on-peak Mitigate Over Generation Voltage Support Regulation capability Price sensitive load Responsive to ISO dispatches Frequency Responsive Responsive to Wind Generation Production Generation Portfolio Storage Demand Response “Partners in Success” Wind Generation Solar Generation Hydro Generation Geo-thermal Generation 7