How Grid Planning Has Changed and New Challenges
MARKET SIMULATION MODELING: How Grid Planning Has Changed and New Challenges
By Jason Atwood | Director of Business Development jason@anchor-power.com
Part 1 of 4.
Industry and policy changes occur at a fast rate, how do we address these challenges? Proper resource and market planning is the answer.
Software simulations have always served as the foundation of generation and transmission planning in the power industry. Long-term grid planning used to mean looking forward 10 to 20 years. However, today, in some regions, three-year projections are often considered long-term system planning. This creates a challenge in market modeling simulations because changes in the industry occur more frequently, which means planners have a tough job getting the fluctuating simulation assumptions correct.
In the past, traditional investor-owned utilities performed all of the transmission, distribution, and generation planning for the grid. Currently, Regional Transmission Organizations provide transmission planning for much of the country. While there have been numerous changes in the power industry in recent years, modeling the grid and forecasting information like Locational Marginal Prices (LMP) are still at the heart of power planning. However, the process is significantly more complicated than it once was. Thirty years ago, planners studied summer and winter peak hours and sometimes included an off-peak hour. For analysis, planners considered their service territory and that of other utilities that were directly interconnected to them. Companies built generators in their own service territory. Energy markets did not exist. Today, companies have to examine every hour of the year or of multiple years in their study horizon. Planners must consider large regional areas for grid studies. It’s not uncommon for companies to build a power plant far from their service territory. Energy markets cover most of the country. To face these planning challenges, extensive analysis of the grid is required. EnCompass software helps companies make optimal power supply decisions by providing an in-depth view of the electric system.Â
As we transition to a zero-carbon footprint, vast amounts of renewable generators are being constructed in wind and solar rich areas of the country. The transmission grid of the future must facilitate the economic delivery of those new resources. Without an integrated process for transmission and generation planning, the following two types of investment decisions are made in reaction to each other instead of together:
- Transmission circuits are constructed to deliver energy and must meet minimum compliance standards to maintain system reliability.
- Generators are built to meet demand, reserve margins, and in some cases capacity requirements depending on location and load responsibility. Generators are also constructed for economic and public policy reasons. If enough renewable generators are constructed in an area where congestion and curtailment occur, then new transmission circuits will be built for economic purposes to deliver low-cost energy. If transmission and generation planning are performed independently, the chances increase to construct a grid that is inefficient, heavily congested, prevents the delivery of low-cost energy, and ultimately increases cost to the ratepayer.
Benefit and cost are the first items to consider in transmission and generation planning. This is determined by running simulations to forecast production costs, locational marginal prices, generator operations and curtailment, transmission congestion, emission levels, fuel usage, and other items. Planning for the next generator or transmission circuit has a lot of moving parts. It can be challenging to know where to begin the process. Without proper planning, companies risk building generation in sub-optimal locations where full output of the facility is not achieved, thus creating financial hardship. EnCompass, an agile power simulation system, evaluates congestion risk along with generation planning cost and benefit to overcome these hurdles.
The EnCompass software product is the industry leader in representing North American power markets and offers the ability to easily and thoroughly analyze changing market structures, zonal or nodal powerflow transmission representations, environmental compliance programs, price forecasting and resource planning applications. Don’t be limited by insufficient or outdated power planning software or software designed for different markets. Call or email us to schedule a demo to see what EnCompass can do for your organization.
Anchor Power Solutions provides planning software and consulting services for the power industry with a focus on market price forecasting, economic transmission analysis, integrated resource planning, budgeting, and risk analysis. Anchor Power Solutions developed EnCompass Software to accomplish all these functions in a single, easy-to-use system. For a custom demonstration, contact info@anchor-power.com.