1. Integration of Variable Generation Task Force (IVGTF) & Emerging Issues Mark Lauby Manager, Reliability Assessments mark.lauby@nerc.net

2. About NERC  The electric industry’s “self-regulatory organization” for reliability Balances the interests of all stakeholders Represents industry consensus Independently acts in the best interest of reliability International “charter” lending government support and oversight to SRO activities, ensuring that the best interests of society-at-large are represented  Federally recognized “Electric Reliability Organization” in the U.S.  Agreements in place with several Canadian provinces and developing these agreements in others

3. About NERC: Mission  Develop & enforce reliability standards  Assess current and future reliability  Analyze system events & recommend improved practices  Encourage active participation by all stakeholders  Pursue mandatory standards in all areas of the interconnection To ensure the reliability of the North American bulk power system

4. 2007 LTRA Report  Operational challenges must be resolved  Transmission needed to support renewable development “Clean Energy Superhighway”  NERC to monitor federal carbon legislation for impact on reliability Integration of Wind & Solar Resources Require Special Considerations in Planning, Design, & Operation

5. NERC’s Actions  Evaluate operational requirements  Recommend standards.  Develop a consistent approach for rating variable resources Available capacity at time of system peak  Developed Integration of Variable Generation Task Force

6. Engaging Industry Experts  Integration must support a reliable bulk power system  Variable Resources affect planning/operations  Reviewed by the Operating & Planning Committees in December 2007  Integration of Variable Generation Task Force

7.  The Task Force will prepare A concepts document that includes the philosophical and technical considerations for integrating variable resources Specific recommendations for practices and requirements, including reliability standards, that cover the planning, operations planning, and real-time operating timeframes.  The document will include: Planning timeframe issues, such as contribution to reserve margins and modeling requirements to test system reliability, Operational Planning and Real-time operating timeframe issues, including Interconnection frequency, and primary and secondary generation control Review NERC Standards for any gaps Conclusions and recommendations. IVGTF Scope

8.  Bulk power system reliability must be maintained, regardless of the generation mix  All generation must contribute to overall bulk power system reliability  Standards and criteria established must be fair, transparent and performance-based  Planners and operators must understand the challenges presented by large scale integration of variable generation  Wind and other variable generation must effectively integrate into planning and operations practices to ensure reliability  New Planning/operating tool requirements will be described in terms of bulk power system reliability performance IVGTF Guiding Principles

9.  Characteristics of Variable Generation  Planning and Technical Impacts  System Operations  Other and Future Considerations  NERC Standard Review  Conclusions & Recommendations  Glossary IVGTF Outline of White Paper

10.  High Industry Interest 50 Nominations received  Liaisons being built with Industry Groups American Wind Energy Association (AWEA) Canadian Wind Energy Association (CanWEA) Utility Wind Integration Group (UWIG) Solar Energy Industries Association (SEIA) IEEE-PES EPRI U.S. Department of Energy Union for the Co-ordination of Transmission of Electricity (UCTE) IVGTF Status

11. IVGTF Status: Work Plan ItemGoalLead2008 Milestones Conf. CallReview Report outline & assignmentsLaubyFebruary OC/PCStatus ReportFrost & LaubyMarch MeetingReview assignments first draftsTask ForceMarch MeetingReview Second draftsTask ForceMay OC/PCStatus Report & preliminary findingsFrost & LaubyJune MeetingReview Final Draft ReportLaubyAugust OC/PC  Present Final Draft Report  Capacity Method Recommendations Frost & LaubySeptember Meeting Review OC/PC Comments & develop Final Report Task ForceAugust OC/PC Present Final Report and recommendations Frost & LaubyDecember Meeting/ Workshop Open Meeting to Present resultsTask ForceJanuary, 2009

12. Emerging Issues & Scenarios

13.  Collaborative Effort with NERC Staff  “Packaging” Condense focus to no more than five “key” emerging issues Broader issues do not change year to year –create separate document  Divide Key Findings section into: Key Findings – from Regional Assessments Emerging Issues – from the industry  Specific Emerging Issues identified  “Progress from 2007 Report” section 2008 Key Findings & Emerging Issues

14. Risk Assessment of Emerging Issues  Emerging Issues is critical driver for: Assessment concentration Scenario analysis  Industry experts to identify Emerging Issues for prioritization  Ranking based on combination of likelihood & severity (consequences)  To manage expectations and speculation by regulators & legislators about how utilities should respond to these issues  To inform the policy debate

15.  7 Issues Identified by NERC Staff & RAS, prioritized: 1.Greenhouse gas reductions 2.Fuel storage & transportation 3.Rising global demand for energy & equipment, increased off-shore manufacturing of raw & finished materials 4.Increasing adoption of demand-side & distributed generation resources 5.Replacing and upgrading transmission infrastructure for the 21st century 6.Water usage 7.Mercury emissions  RAS will expand on a number of these in the 2008 LTRA 2008 LTRA Emerging Issues Priority

16. Candidate Scenarios  Should have significant impact on the reliability of the bulk power system  Must be a future condition providing enough lead-time for assessment to inform a solution  Selected with consideration for the definition of Adequate Level of Reliability  Will be ranked by NERC PC based on likelihood & severity

17. Emerging Issues & Scenarios LTRA Published NERC Staff PC assigns RIS, RAS & TIS to develop list of emerging issues PC agrees to scenarios for the following year, based on risk assessment of emerging issues. Regions develop Scenario Study Outline RAS assigns scenarios. Sends with LTRA Data Request. Regions perform Scenario Reliability Assessment RAS Peer Review Scenario Year 1 Year 2 Scenario study outline peer reviewed by RAS & PC

18.  Scenario #1: Study renewable integration in 2009. If there is little or no impact of Scenario #1 on a region, then the Region must perform Scenario #2  Scenario #2: A scenario picked by the Region for study in 2009  Details of scenarios would be proposed by Regions, coordinated with RAS, and approved by the PC at June 2008 meeting 2008 Emerging Issues & Scenario Analysis

19. Thank You