1. Enhancing Reliability of the North American Transmission Grid Enhancing Reliability of the North American Transmission Grid Presented By Dejan J Sobajic Power Delivery EPRI (650) 855-8537 dsobajic@epri.com April 5, 2001 NGA Forum On Electricity Restructuring

2. Grid Reliability and Its Components Financial Risk Management Grid Operations Power Markets Reliability Management Operations Planning Integrated Resource Planning System Maintenance Information Security Financial Incentives Obligation to Serve Load Management

3. Grid Reliability and Its Components Financial Risk Management Grid Operations Power Markets Reliability Management Operations Planning Integrated Resource Planning System Maintenance Information Security Financial Incentives Incentive to Serve Load Management

4. Change of the Players Planning and operating bulk interconnected electric power systems was once mainly the domain of planning and operations engineers within the utility company. Now this involves entities representing the interests and needs of –transmission owners, –system operators, –energy sellers, –large industrial customers and other end users, –regulators, –reliability councils, –security centers, –manufacturers, –marketers, –brokers, and –power exchange personnel.

5. Change in System Operations In parallel with the increase in the diversity of participants, the conditions under which power systems are operated have also become more diverse. Transmission loading patterns differ from those for which they were originally planned.

6. Maintaining System Reliability is a Must Maintaining reliability is fundamental to the proper planning and operation of the bulk electric power system. Significant deterioration in reliability levels could have social and economic consequences that directly counter benefits of decreased energy costs brought about by competition.

7. Safety Margins To maintain system reliability under uncertainty, studies are performed to aid in operating and planning decisions. The current practice within the industry uses deterministic methods to perform these studies, with significant safety margins to cover "all" the possible unknown uncertainties. Though investment and operational costs are relatively high, this has resulted in a correspondingly high degree of reliability in most power systems.

8. Present Realities Economic pressures are pushing systems towards lower security margins. To operate the system closer to the traditional deterministic limits, or even beyond them, –more refined methods for power system security assessment are needed at the operating and planning stage, –which take into account the probabilistic nature of many uncertain variables in the decision-making environment.

9. Why Change? There has been a real and tangible price to pay for using this approach: solutions tend to be overly conservative, due to the emphasis of the most severe, credible event. Utilities are less willing to invest in new facilities yet more willing to push transmission limits in order to take advantage of less expensive energy and lower production costs.

10. Adequacy and Security North American Reliability Council (NERC) Planning Standards defines: Adequacy is the ability of the electric systems to supply the aggregate electrical demand and energy requirements of their customers at all times, taking into account scheduled and reasonably expected unscheduled outage of system elements. Security is the ability of the electric systems to withstand sudden disturbances such as electric short circuits or unanticipated loss of system elements.

11. Three Causes of Insecurity We use the label "security," as the ability of the system to withstand sudden disturbances in terms: –circuit overload –voltage problems, and –dynamic problems. We are motivated to include these three types of problems under the same umbrella because our intent is to develop a single assessment framework to encompass all of them

12. Security Mapping

13. Risk and Reliability Reliability is a measure of: a system’s ability to avoid failure. Risk is a measure of: a system’s exposure to the consequences of failure. Reliability analysis primarily aims to identify likely failure modes. Risk analysis primarily aims to integrate reliability analysis with economic decision making.

14. Risk Definition Risk[impact i] = Prob[impact i] x Cost[impact i]Risk[impact i] = Prob[impact i] x Cost[impact i] This is an expectation of the economic impact of impact i This is an expectation of the economic impact of impact i It is the average cost associated with impact i over a long It is the average cost associated with impact i over a long period of time. period of time. We also compute the variance from this average. We also compute the variance from this average. Risk of several impacts can be summed to get a composite Risk of several impacts can be summed to get a composite risk for an operating condition risk for an operating condition Risk of a trajectory of operating conditions can be summed Risk of a trajectory of operating conditions can be summed to get a cumulative, composite risk for a time interval. to get a cumulative, composite risk for a time interval.

15. Interface Flow Line Flow Thermal Dynamic Voltage SECURE Risk Based Security Contours

16. In an Operator Own Words... Operators need to know the probability of occurrence, and then determine whether or not to apply preventive actions… If certain transaction is going to increase the loading on certain facilities will it have have a significant effect on the security of the system? What is the value of taking that next step? and then "What is the cost of having a major disturbance occur?”

18. Composite Risk Contours Composite Risk Contours

19. The Risk-Based Decision Criteria MW Flow on Transmission Interface 10E-5 10E-3 10E-1 10E+3 10E+5 10E+7 10E+9 risk benefit Max{benefit-risk}

20. EPRI Reliability Initiative Started in Fall 1999Started in Fall 1999 Phase 1 closing on April 20, 2001Phase 1 closing on April 20, 2001 “Proof-of-Concept” Studies“Proof-of-Concept” Studies –Risk Security Study of Southern Control Area of SERC –Risk Security Study of AEP System –Risk Security Study of Eastern Interconnection –Risk Security Study of ERCOT Phase 2 will be launched on April 20, 2001Phase 2 will be launched on April 20, 2001 Key developments for future use of risk-based security technology:Key developments for future use of risk-based security technology: –Culture Change –Data

21. Dejan (Dan) J. Sobajic - EPRI Phone : 650 – 855 - 8537Phone : 650 – 855 - 8537 Cell : 650 – 799 – 7670Cell : 650 – 799 – 7670 Email: dsobajic@epri.comEmail: dsobajic@epri.com