Recent FERC Decision Provides Welcome News for Operators, Many Renewable Energy Generators
In late July, the Federal Energy Regulatory Commission (FERC) issued a ruling to help ISO-New England more effectively manage congestion on its grid due to growing renewable energy generation. Due to the intermittent nature of renewable generation, operators nationwide cannot predict when transmission lines might get overloaded. This can cause generators of renewable power to have to curtail their supply through a cumbersome and inefficient manual system. ISO-NE, having experienced this issue firsthand, appealed to the FERC for approval to upgrade from a manual dispatch to electronic management for wind and hydropower resources. In its ruling, FERC granted ISO-NE permission to use a modified electronic dispatch method called DNE Dispatch Points for wind and hydro resources classified as Intermittent Power Resources – those above 5MW. FERC required ISO-NE to submit a compliance filing within 30 days, with proposed tariff revisions effective April 2016. For implications and analysis on this change, read on!
A Shift Away from a Manual System: In its comments, ISO-NE noted that the manual process of curtailing renewable power resources is “inefficient” because the dispatch of generators required by congestion is then not “reflected in real-time prices.” Overall, this causes a “mismatch of economic signals and reliability requirements.” Notably, this also prevents renewable generators from operating at their most efficient capacity. A manual system of congestion management frustrates both parties: operators cannot produce efficient price schemes based on available resources, and system operators cannot allow generators to produce renewable energy to the full limit of their capability.
Embracing Electronic Efficiency: FERC, ISO-NE and the renewable generators all agree that the switch to an electronic system will improve price formation and system reliability. Intermittent generators can now generate power to their full capability without fear of being limited due to grid overload. The initiative has implications beyond New England – this switch is good news for operators and generators nationwide.
What about Solar?: Despite filings from companies such as RENEW Energy Partners and SunEdison arguing for its inclusion, solar was notably absent from the request. ISO-NE said that for solar, “the technology has not yet been developed to make plant-specific forecasts feasible.” Operators could make a change toward solar as they develop the ability to forecast accurate, short-term, plant-specific models. As technology improves, it will eventually allow operators to expand the dispatch method to solar.