7/29/2014. Wisconsin Public Utility Institute ENERGY UTILITY BASICS. Wisconsin Public Utility Institute

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1 ENERGY UTILITY BASICS Systems within the Electric Utility Business Generation Transmission Distribution - Consumption RTOs and Markets Ken Copp July 31, 2014 SOURCE Generating Plant Distribution System Transmission System CONSUMER Preliminary Helping to keep the lights on, businesses running and communities strong Generation is the production of electric energy in a form which can be transported to be used elsewhere (near or far) by people. Generation Energy Conversion Electric energy for human use is converted from another form Batteries produce electricity from a reaction between different chemicals Solar cells produce electricity by changing light energy from the sun into electricity Fuel cells convert chemical energy directly to electricity, like batteries with a constant supply of new chemicals to react with each other Generation Energy Conversion Prime mover generators use machines which rotate coils of wire through magnetic fields to convert mechanical energy to electrical energy Generation Prime mover generators include: Wind turbines Water turbines Steam turbines Gas (combustion) turbines Simple Cycle Combined Cycle Internal combustion engines Prime mover generators provide most of the electricity we use 1

2 Electricity Electricity is a physical phenomenon in which an electric field exerts a physical force on charged particles of matter, causing them to move when they are not somehow constrained Lightning is an unconstrained example of electricity; an electric field between cloud and ground causes charged particles to move in great amounts and at high speed. Electricity An electric power system provides a controlled, constrained pathway for electricity to be safely generated, transmitted over large or small distances, and utilized by consumers The measure of electric field strength in an electric power system is the volt (V) The measure of electric current the flow of charged particles within the system is the ampere (A) Electricity Power is a measure of energy transfer Electric power is measured in watts One ampere flowing under a voltage of one volt represents one watt (W); a thousand watts is a kilowatt The energy represented by one watt flowing for one hour is one watt-hour; the typical unit used in the electric industry is thousands of watt-hours, or kilowatt-hours Heroes Electro-physicists and Electrical Engineers celebrate their heroes by naming physical quantities after them Ampere: Andre-Marie Ampere developed the theory of electrodynamics/electromagnetism (France) Volt: Count Allesandro Volta invented the electrochemical pile[(battery] (Italy) Watt: James Watt developed the condensing steam engine (Britain) Kewaunee Nuclear Plant Pleasant Prairie Power Plant (Coal) 2

3 Port Washington (Combined Cycle Natural Gas) Big Q Generating Plant (Hydro) Where Do You Find Solar Arrays? Where Do You Find Solar Arrays? New Mexico Warren, Michigan Duluth, MN California Arizona Nevada At Church (New Jersey) Anywhere Shropshire, England

4 Transmission is the movement of electric energy from a source (generator) location to a location where the energy can be distributed to multiple end-users (customers). Distribution is the movement of electric energy from central delivery points to the points of end-use consumption where people convert the electric energy to other forms Network or Radial? Loop Flows, Counter Flows Gen 3 Gen 2 Load Gen 1 Physics and Economics Locational Market Prices (LMP) Gen 3 Gen 2 Load Gen 1 GEN #1 $30/MWH GEN #2 $20/MWH GEN#3 $100/MWH 4

5 Lattice 345kV Dbl Cir Steel pole 138 kv double circuit 138 kv H frame structure Wood Pole 69kV & Dist Davit Arm Shield wires intercept lightning strikes Aerial patrol structure identification number (yellow tag) Phase conductors; always 3 per circuit Typical 138 kv suspension insulators Vibration damper Suspension insulator 5

6 138 kv vertical break disconnect switch in the closed position. Disconnects are usually manually operated and used to isolate pieces of equipment from the transmission system for visual verification that a piece of equipment is safe to work on. 138 kv vertical break disconnect switch in the open position. Disconnects are usually manually operated and used to isolate pieces of equipment from the transmission system for visual verification that a piece of equipment is safe to work on. Disconnect switches Disconnect switches 6

7 345 kv SF6 gas, live tank with ganged operation. There is only one operator for the three poles, so they all operate together. Circuit interruption takes place in the large tank on top of the porcelain column. This tank is at system voltage, hence the phrase live tank. External-mounted, free-standing CTs (current transformers) are used for relaying. 345 kv Oil Circuit Breaker. Three tank design where circuit interruption for each phase is in a separate tank. Current transformer Live tank SUBSTATION 345 kv/138 kv Transformers Padmount Transformer Pole with Transformer 7

8 [Consumption] is the conversion of electric energy to a different, useful form such as heat, light, radio waves, or mechanical work, by end-users for their own benefit [Consumption] The electricity customer drives everything The pattern of combined electricity use of all the customers connected to a system determines the amount and types of generators, transmission lines and distribution systems required to reliably serve those customers Customer behavior interacts with utility planning and programs to influence investment and cost of electric service What happens when you flip the switch? Operations When you flip the switch, your usage impacts the system. All generators and motors across the interconnected transmission and distribution systems slow down imperceptibly Their control systems react to restore the frequency of rotation to 60 Hertz or cycles per second What is demand/load? Every time you turn on a light, air conditioner, electric stove, the transmission grid responds to that demand instantaneously The load the amount that is demanded each instant changes constantly but traditionally has had the following shape Potential Future Demand and Generation Patterns Utilities, transmission owners and grid operators are concerned about going from this load shape to this load shape and still keep the lights on

9 Markets Roles of Systems in Markets Generators compete for customers Transmission connects customer areas to distant generation options Federal Tariffs (FERC) govern access to transmission service and the terms of payment for use of the transmission system Distribution is local and not involved in markets Very important for reliability Energy Markets (8760 Hours/Year) Day Ahead and Real Time Wholesale Retail Capacity Markets (1 Hour/Year) Look 1 to 10 years into the future Ancillary Services Markets Manage the Reserves needed for reliability Energy Markets Wholesale Utilities shop for energy for their customers Retail Customers shop directly for their own energy Federal Regulators (FERC) governs the wholesale market State Regulators determine whether customers have access to a Retail Market Bi Lateral Energy Markets Day 1 Markets involve Bi-lateral contracts between individual suppliers and users Energy Purchase and Contract Path are separate transactions LMP Energy Markets (MISO 2005) A Market Operator creates a clearing house where load and generation can trade Generation Offers energy Load Serving Entities Bid their load The market automatically matches buyers and sellers Bilateral Markets capture about 97% of the value in matching buyers and sellers of energy LMP Market systems are complex and costly LMP Markets cover very large areas to capture the remaining value and to offset their costs MISO covers 15 states and one Canadian Province MISO Day 2 Market costs $100 Million per year MISO Markets MISO Energy Markets Begin in 2005 Day Ahead and Real Time Energy Markets ARR/FTR Transmission Rights Market 2009 Ancillary Services Market Begins 54 9

10 MISO LMP Market MISO LMP Market MISO Real Time Market LMP Differential Example Capacity Markets Cover the adequacy of energy on the highest use hour of the year Drive the need to build new resources Resources can be new generators Resources can be Demand Response loads Capacity includes the generation to cover load and reserves to assure reliable operation PJM has a capacity market MISO has a Capacity Construct with an auction for capacity purchases. 57 Ancillary Services Markets Create a market to manage the cost of Operating Reserves MISO ASM began in 2009 Covers Supplemental Reserves Spinning Reserves Non-Spinning Reserves Covers Regulation Focus on Markets Where are we going? Demand Response Resources PJM & MISO Smart Grid technologies Increasing Use of Variable Resources Wind, Solar Storage Record Low Natural Gas Prices 2012 Fracking Significant Retirements of Smaller Coal Generators 10

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