1. Making Clean Local Energy Accessible Now September 12, 2013 Enhances System Reliability & Efficiency Distributed Generation + Intelligent Grid (DG+IG) Stephanie Wang Regulatory Policy Director Clean Coalition Steph@Clean-Coalition.org www.Clean-Coalition.org

2. Making Clean Local Energy Accessible Now 2 Contents of DG+IG Presentation Overview of Grid Support ServicesDG+IG Balances VoltageDG+IG Balances Power & FrequencyDG+IG Can Replace SONGS

3. Making Clean Local Energy Accessible Now 3 Overview of Grid Support Services ServiceSummary Voltage Control Keep voltage within optimal range by injecting and absorbing reactive power. Power Balancing Includes Regulation, Load Following/ Energy Imbalance, Operating Reserves. Balance real power supply and demand, keep frequency within optimal range. Frequency Response Provide real power to respond to sudden losses of large generators or transmission lines. ForecastingForecast power supply and demand. Grid support services enable the reliable operation of electric grid systems.

4. Making Clean Local Energy Accessible Now 4 Overview of Grid Support Services A number of studies, however, suggest that, as intermittent renewables become a larger presence in U.S. electricity generation, that 1% requirement will grow. Balancing power supply and demand Balancing power supply and demand Control voltage with reactive power Source: Oak Ridge National Laboratory (2004)

5. Making Clean Local Energy Accessible Now 5 DG+IG Enhances System Efficiency & Reliability Overview of Grid Support ServicesDG+IG Balances VoltageDG+IG Balances Power & FrequencyDG+IG Can Replace SONGS

6. Making Clean Local Energy Accessible Now 6 Distributed Advanced Inverters Balance Voltage sec per unit voltage Advanced inverters locally absorb reactive power Advanced inverters locally supply reactive power “Reactive power supply is the key controller of voltage in alternating current (AC) power systems. Reactive power supplied locally could be a major player in improving system reliability as well as improving system efficiency.” Oak Ridge National Laboratory (2008)

7. Making Clean Local Energy Accessible Now 7 DG+IG Core Solutions for Voltage Regulation SolutionsBenefits Distributed Generation Provisions reactive power where it’s needed most for regulation Avoids line losses Reduces congestion of transmission and distribution lines Advanced Inverters (paired with solar, storage) Provisions distributed reactive power Reacts automatically within fractions of a second (conventional resources can take minutes to react) Converts real power from the grid to reactive power 24/7/365 Oversized inverters can deliver reactive power without reducing DG real power output Ride-through voltage events, remain attached longer than conventional spinning generators without harm Modern inverters already have these advanced capabilities Energy Storage (batteries, flywheel) Provisions both real and reactive power Generally paired with advanced inverters

8. Making Clean Local Energy Accessible Now 8 Distributed Voltage Regulation – Location Matters Efficient & reliable reactive power (Advanced Inverters) Benefits of distributed voltage regulation: Enhances system reliability by providing reactive power where needed Improves system efficiency by avoiding line losses and reducing congestion Oak Ridge National Laboratory (2008)

9. Making Clean Local Energy Accessible Now 9 Distributed Voltage Regulation – Location Matters “The old adage is that reactive power does not travel well.” Oak Ridge National Laboratory (2008) Source: Oak Ridge National Laboratory (2008) T&D lines absorb 8-20x more reactive power than real power. Prevent Blackouts: When a transmission path is lost, remaining lines are heavily loaded and losses are higher. T&D lines absorb 8-20x more reactive power than real power. Prevent Blackouts: When a transmission path is lost, remaining lines are heavily loaded and losses are higher.

10. Making Clean Local Energy Accessible Now 10 Advanced Inverters Keep Voltage in Balance An inverter converts direct current (DC) to alternating current (AC) power. Advanced inverters from Germany to State of Georgia have been programmed to deliver reactive power. Proposed changes to IEEE 1547a and UL standards will allow advanced inverters to provide reactive power for voltage regulation in California. Source: EPRI (2011)

11. Making Clean Local Energy Accessible Now 11 Advanced Inverters – Voltage Ride Through Source: CPUC Advanced Inverters Working Group, SCE Comments, 2013 Enhanced Ride Through U.S. standards require inverters to automatically disconnect from the grid during any voltage event. Proposed changes to IEEE 1547a in California would allow ride through, enhancing system resilience.

12. Making Clean Local Energy Accessible Now 12 Advanced Inverters – Reactive Power P 90% Q 43.6% S 100% REACTIVE (Q) REAL (P) P: Real power (kW) Q: Reactive power (kVAr) S: Total power (kVA) 100 kW solar PV AC power 100 kVA inverter capacity 0.9 power factor 43.6 kVAr reactive power 90 kW real power Standard-sized inverter: Diverts up to 10% solar capacity to provision reactive power Standard-sized inverter: Diverts up to 10% solar capacity to provision reactive power Advanced Inverter at 0.9 Power Factor = 43.6% reactive power

13. Making Clean Local Energy Accessible Now 13 Advanced Inverters – Reactive Power (Oversized) P 100% Q 45.8% S 110% REACTIVE (Q) REAL (P) 100 kW solar PV AC power 110 kVA inverter capacity 0.9 power factor 45.8 kVAr reactive power 100 kW real power Oversized inverter: No reduction of PV real power Draws up to 10 kW real power from the grid Provides reactive power 24/7/365 Oversized inverter: No reduction of PV real power Draws up to 10 kW real power from the grid Provides reactive power 24/7/365 P: Real power (kW) Q: Reactive power (kVAr) S: Total power (kVA)

14. Making Clean Local Energy Accessible Now 14 Advanced Inverters – Costs for Producers UC Berkeley (2013) Oversize Inverter Cost = (Oversized Inverter) - (Standard Inverter) Lose Peak Real Power An example: 10 kW PV system Located in SF ($0.149/kWhr) Peak over 2 hours, PF = 0.9 Lose $109/kVAr-yr An example: 10 kW PV system 11 kW Inverter Cost = $113.5/kW Produce PF = 0.9 Produce 1.2 kVAr Cost $1.2/kVAr-yr

15. Making Clean Local Energy Accessible Now 15 Energy Storage Keeps Voltage in Balance Photos: CESA (2013) Storage can perform all voltage regulation functions: In addition to provisioning real power, generally paired with advanced inverters that can provision reactive power Batteries and flywheels can react automatically within fractions of a second

16. Making Clean Local Energy Accessible Now 16 Conservation Voltage Reduction 120 Volts vs. 117 Volts = 2.5% drop in power usage Potential to reduce total system power usage by up to 3% Pacific Northwest National Laboratory (2010) 120 Volts vs. 117 Volts = 2.5% drop in power usage Potential to reduce total system power usage by up to 3% Pacific Northwest National Laboratory (2010)

17. Making Clean Local Energy Accessible Now 17 DG+IG Enhances System Efficiency & Reliability Overview of Grid Support ServicesDG+IG Balances VoltageDG+IG Balances Power & FrequencyDG+IG Can Replace SONGS

18. Making Clean Local Energy Accessible Now 18 DG+IG Balances Power & Frequency Source: NERC (2011)

19. Making Clean Local Energy Accessible Now 19 Frequency Regulation Capacity Requirements Navigant / Pike Research projects that U.S. frequency regulation capacity requirements will increase. In 2011, assets that provide frequency regulation amounted to about 1% of peak load.

20. Making Clean Local Energy Accessible Now 20 DG+IG Solutions for Balancing Power & Frequency SolutionsBenefits Demand Response Automated demand response can address power imbalances within fractions of a second Reduces or shift load away from peak hours to free up other resources to provide real power Energy Storage (batteries, flywheel) Supplies and absorbs power Can reduce or shift load Can react automatically within fractions of a second Forecasting Forecasting improvements will reduce unpredicted differences between scheduled supply and actual supply Proactive Ramp Control Reduce output from intermittent generators for proactive ramp control to smooth out short term variations Curtailment Curtail intermittent generators to flatten system-wide steep ramps

21. Making Clean Local Energy Accessible Now 21 DG+IG Keeps Power in Balance DR, ES shifts load ES, Auto-DR, Curtailment for ramping DR, ES shifts load

22. Making Clean Local Energy Accessible Now 22 Power Balancing – Location Matters Efficient power balancing Efficient power balancing Benefits of distributed power balancing: Avoids line losses Reduces congestion of T&D lines

23. Making Clean Local Energy Accessible Now 23 DG+IG: Fast & Accurate Frequency Regulation FERC Order 784 (July 2013) requires transmission providers to consider “speed and accuracy” when determining reserve requirements for frequency response and regulation. Conventional Spinning Generator Flywheel Storage Storage provides both supply and demand Faster and more accurate regulation = less MW required Source: Beacon Power (2011)

24. Making Clean Local Energy Accessible Now 24 Proactive Curtailment for Ramp Control For an individual variable generation system, reduce output to control ramp down when there’s a forecasted reduction in solar/wind resources, and limit output to control ramp up. Puerto Rico requirement – no more than 10% of nameplate can change within 1 minute. Forecast system detects cloud edge moving toward PV installation and prepares curtailment order Start curtailment ramp down Start curtailment ramp up Minutes Source: Clean Coalition (2013)

25. Making Clean Local Energy Accessible Now 25 Proactive Curtailment for Ramp Control (Cont’d) Cost Considerations Proactive curtailment is less expensive for solar project owners than investing in storage in some situations. Proactive ramp down requires MC2 equipment – must be able to monitor and forecast resource reduction, communicate between equipment at the site, and control ramp up and down. Some utilities may claim that weather monitoring equipment will be expensive SMUD concluded that monitoring can be done with inexpensive solar battery systems generally used for grid communications.

26. Making Clean Local Energy Accessible Now 26 Frequency Response is a Regional Issue Western Electricity Coordinating Council (WECC) California Independent System Operator (CAISO) Each ISO must provide a certain amount of real power to respond to the sudden loss of a large generator or transmission line within the region.

27. Making Clean Local Energy Accessible Now 27 Frequency Response – CAISO Obligations Source: California ISO Frequency Response Study by General Electric (November 2011) CAISO contribution ~650 MW Less than 10 seconds to respond

28. Making Clean Local Energy Accessible Now 28 Solutions for Frequency Response SolutionsBenefits Conventional Response (spinning reserves) Traditionally, in California, natural gas power plants are kept in spinning mode to meet this need. These spinning reserves run less efficiently b/c not running at maximum rated output. Energy Storage (batteries, flywheel, pumped hydro) Energy storage may be used to dispatch power for frequency regulation within less than a second or up to 5 seconds, depending on the technology. California Public Utilities Commission has set energy storage procurement targets of 1.325 GW by 2020. Automated Demand Response Automated demand response can reliably free up power supply to respond within fractions of a second. Most existing demand response in California is too slow and not dependable enough to participate in frequency response.

29. Making Clean Local Energy Accessible Now 29 DG+IG Enhances System Efficiency & Reliability Overview of Grid Support ServicesDG+IG Balances VoltageDG+IG Balances Power & FrequencyDG+IG Can Replace SONGS

30. Making Clean Local Energy Accessible Now 30 Joint Taskforce Plan for Replacing SONGS / OTC Joint Taskforce (CPUC, CEC, CAISO) Preliminary Reliability Plan (Sept 2013) Issues: Replace SONGS and ~5000 MW of retiring Once-Through-Cooling Plants Address load growth in target areas through 2022 Solutions: Meet 50% of needs with 3,250 MW of local preferred resources (energy efficiency, demand response, renewables, combined heat and power, storage) Meet 50% of needs with transmission upgrades (including voltage support) and 3,000 MW of conventional generation Source: CPUC July 15, 2013

31. Making Clean Local Energy Accessible Now 31 Replace SONGS with IG Solutions Clean Coalition Solutions: Recognize the full potential of local preferred resources. Plan assumes low capacity factor for demand response. CPUC should set realistic but ambitious demand response targets. Plan does not include use of advanced inverters to provision reactive power. CPUC should develop pilot project for Southern California. Maximize use of local preferred resources. 50% limitation on local preferred resources is arbitrary, based on outdated assumptions about the potential of local preferred resources, and not in compliance with the Loading Order. Southern California Edison’s Living Pilot should be a showcase for using local preferred resources to meet grid reliability needs. Policy Forums: CPUC Long Term Procurement Plan Track 4 (SONGS) CPUC SCE Living Pilot CEC Integrated Energy Policy Report CPUC Demand Response

32. Making Clean Local Energy Accessible Now 32 Replace SONGS – Demand Response California must implement FERC Order 745 and greatly expand use of demand response. PJM was the first grid operator to comply with Order 745, and now demand response bids into PJM markets and responds like a generator.

33. Making Clean Local Energy Accessible Now 33 Replace SONGS – Solar Potential SMUD installed 100 MW of local solar in just 2 years. Equivalent to 2.5 GW of local solar if a similar program were extended across the entire state. SMUD installed 100 MW of local solar in just 2 years. Equivalent to 2.5 GW of local solar if a similar program were extended across the entire state. Eric Garcetti committed to 1,200 MW of local solar within LA city limits by 2016

34. Making Clean Local Energy Accessible Now 34 Replace SONGS – Solar PV + Advanced Inverters Huntington Beach 290 MVars (minus line losses = 261 MVars) Huntington Beach 290 MVars (minus line losses = 261 MVars) vs. 570 MW of local solar with advanced inverters, oversized by 10% set at 0.9 Power Factor = 261 MVArs

35. Making Clean Local Energy Accessible Now 35 Replace SONGS – Energy Storage Potential Targets set by CPUC include 745 MW storage in Southern California