1. International Meeting on Very Large Power Systems State Grid of China Beijing, China October 25-25, 2005 Presentation Brazilian National Interconnected Power System Operation Luiz Eduardo Barata Operational Director ONS – Operador Nacional do Sistema Elétrico – Brazilian ISO

2. 2 Operating Environment: The Brazilian National Interconnected Power System – SIN Characteristics

3. 3 Production & Market Data – 2004 – National Integrated Power System - SIN Integrated Operation by the Independent System Operator Introduces 25 % of Synergic Gains Isolated Systems 2% of the Brazilian Market 2002 2004 2008 Installed capacity – MW74,67079,57993,546 Hydro63,83466,42975,315 Thermal-conventional8,82911,14313,301 Nuclear2,007 Renewable (Proinfa)3,270 Max, Demand – MW50,75958,81672,788 Production – TWh347,5384,1468,7 TLs ≥ 230 kV – km72,50680,02290,347 No. of circuits614693775 No. of substations303321351 Transformer capacity (GVA) 166178195 Customers – millions4752 Annual Revenue - US$/bi19,324,2

4. 4 SIN Relative size Brazilian Transmission system x European 1 cm + 260 km 365.9468.2248.0376.0319.7 - 100 200 300 400 500 600 BrazilFranceSpainUKItaly TWh Production (TWh) – 2003

5. 5 Main Transmission Grid Role The Main Grid in the SIN, due to the hydroelectricity predominance and power plant locations far from load centers, besides the power transport role:   Is the main vector of system economical optimization:   Allows for hydrothermal optimal dispatch and optimal use of reservoir storage, by exploring basin hydrological complementarities - adding synergic gains – more than 20% of the system's assured energy   Helps postpone important generation expansion investments The Main Grid can be seen as:   A virtual power plant located at the border of power import regions 2004-2006 Configuration Legend Existent Future Complex 3,450 km 2,780 km Isolated Systems 2% of Brazilian market

6. 6 Subsystems Integration in Brazil – Evolution of Imports Capacity and Energy Demand by Subsystem (1) Itaipu as a Southeast/Midwest subsystem power plant North Northeast Southeast / Midwest South (1) Itaipu Binational Integration leads to enhanced system security Integration also leads to enhanced supply security

7. 7 The National Interconnected System Operator – ONS

8. 8 What ONS does – Attributions and Macro Functions   National Interconnected System – SIN Operations Planning and Scheduling   Real Time Operations   Transmission Services Administration   Operations planning and scheduling and optimal centralized generation dispatch   Supervision and coordination of utilities system operations centers   Operations supervision and control of the national power systems and international interconnections   Contracting and administration of transmission services, grid access and ancillary services   Proposition to MME of main grid installations upgrading and reinforcements   Definition of main grid operations rules   Issuing of actual dispatch performance statistics, for ANEEL auditing Macro functions Tight Pool operation Transmission system owned by utilities Attributions

9. 9 ONS activities chain Grid procedures  Operations rules Proposes of Main Grid upgrading & Reinforcements (*) Planning Generation Operations Planning Operation Transmission Services Accounting and Settling Inputs from utilities products Pre- operation Real time operation utilities consumers Electrical Operations Planning Post- operation analysis 3 years ahead Under demand Up to 5 years ahead Monthly, weekly and daily During the day / real time (*) Mandatory after ANEEL approval Access and Connection to grid Operation Scheduling

10. 10 ONS Control Centers Location and Hierarchy ONS presently has 1 National Control Center – CNOS, 4 Regional Control Centers, 1 for each of SIN’s subsystems, and 4 Local Control Centers ONS is responsible for: systems operations of Main Grid and centralized dispatched power plants (> 30MW), while Utilities are responsible by installations operations; Management of power grid above 230 KV Recife Brasília Rio de Janeiro Florianópolis

11. 11 SIN Reliability: ONS Experience

12.   Permanent concern with all time frames Expansion planning, Operation planning, Operation scheduling, Real Time operation, Post operation   Centralized Transmission Planning adjustments   Grid Procedures – Processes, Rules and Standards - -Requirements for substations arrangements & protection - -Requirements for generating units characteristics and controls - -Requirements, rules and procedures for new accessing Agents to the Main Grid - -Performance standards Reliability – ONS Experience

13. 13   Improvement of intrinsic characteristics of the existing substations, by means of refurbishing bus configurations, transpositions of circuits and other measures aimed at reducing the impact of large disturbances (11 Main Grid substations refurbished in the period 2000-2003);   Strategic installations identification related to system performance (84 out of 398 substations);   Constant upgrade of installations Control & Protection;   Upgrading of system controls (around 250 special protection systems and 4 regional interconnections out- of-step relays);   Yearly revision of controllers settings in the Brazilian major power plants (80 power plants);   Emergency dispatch evaluation;   Implementation of observability and controlability capacities Reliability – ONS Experience

14. 14 More extensive use of special protection systems (SPS) is relevant as demonstrated by experience (By september) Nº of SPS Evolution of SPS in the SIN Period of 2005/2006 Revisions21 Already implanted - 2005 Example: 440 kV double circuit loss 20 Being implanted22 In planning and conception phase 88 Blackout avoided: 1 - 06/14/05  Nine 765 kV towers down at Itaipu; 2 - 08/11/05  Isolation of Tucuruí Hydro Plant from SIN. - -Importance of participation: T, D and G Agents; - -ANEEL meeting – Set/05 to improve Resolution 158.

15. 15 SIN Safety Status

16. 1. 1.Measures designed to minimize the probability of the occurrence of large disturbances. Such measures must be effective in reducing the severity of events. 2. 2.Measures designed to minimize the propagation of unavoidable disturbances. Such measures must be effective in restricting the immediate spatial and temporal effects of the events. 3. 3.Measures designed to minimize load restoration times. These measures must be effective in reducing the load restoration times to the limits considered acceptable from the consumers point of view. Based on three pillars Brazilian Defense Plan Preventive Grid Corrective Actions

17.   Disturbance Analysis Reproduction of disturbances through digital tools Identification of corrective measures and preventive actions   Follow-up of recommendations implementation   Statistical analysis and protection performance evaluation systems Indices - Some examples: - Number of disturbances; - Geographical extension; - System robustness degree; - Non-supplied energy; - Severity (system, minute); - Average and total restoration times.   Analysis of events with no load-loss Operating Security Post Operation Actions By set of disturbances (aggregated time analysis) By disturbance (individual analysis)

18. Control Centers Instrumentation and Personnel Training   The main efforts of ONS are focusing on: Improving measurement system, in a joint Utilities- ONS project Implement in ONS control centers a tool to dynamically assess system security and indicate corrective actions Permanent system operators training on use of control room available support tools (and improvements) Implementation of system operators training simulator tool

19.   Effective restoration time in 1999 and 2002 blackouts Indices – Some Examples

20.   Power Quality / Continuity: Average freq. & duration of SIN outages   System robustness degree (SRD) – Percentage of disturbances in the Main Grid with no load shedding related to the total number of disturbances: Indices – Some Examples YearSRD 200060% 200385% 200488,6% Frequency (times/year): 1.6 (2000) to 1.4 (2003) Duration (hours/year): 2.8 (2000) to 2.2 (2003) Frequency 2004 (times/year): 1.03 Duration 2004 (hours/year): 2,04

21. 21 Main Challenges

22.   Define criteria to technical-economical optimal level of system security / reliability   Improve criteria to balance system electrical security and economically optimal generation dispatch   Evaluate adequacy of present risk of supply value of 5% to be used in system expansion planning Policy and Regulations Power Industry and Consumers Regulations   ISO Regulatory framework

23.   Ensure system optimal dispatch considering commercial interests of each utility   Acceptance by utilities of disturbance analysis conclusions/recommendations   For key substations – to assure system reliability, how to manage the legitimate utility proposal by fully automated (unmanned) systems   During system post-disturbances recovery, how to manage the utilities operator’s reactions to non- explicitly defined situations cited in operations instructions   Manage the balance between environmental requirements and power system operation Operations Environment Operator and Utilities

24.   Difficulties of utilities (time table and investment) to upgrade or reinforce older installations   Definition of load shedding schemes   Ensure system optimal operation face to increasing environmental restrictions   Ensure same reliability level for all system areas   Ensure a reliable measurement system   Ensure reliable protection systems   Ensure the use of adequate new technologies regarding system models, system applications and simulators   Ensure the use of new technologies to provide system operations flexibility and controllability regarding to power system equipment, protection and control, measurement and communications systems Technical / Operational