On March 10th, 2023, the Alberta Electric System Operator (AESO), which is the ISO in Alberta with responsibility for power system planning and system and market operations, published the Reliability Requirements Roadmap to address the power system operational impacts of increasing levels of transmission connected renewable resources, distribution connected resources, and changes to demand patterns due to increasing electrification. This report provides an excellent overview of the challenges facing Alberta’s evolving power system and highlights the fact that “While this shift creates investment opportunities and helps the province to progress towards a decarbonized electricity system and economy, it also presents significant operational challenges.” The report focuses on 3 key areas of system reliability: Frequency Stability, System Strength, and Flexibility Capability.
Here are some key highlights of the report:
The AESO considers Frequency Stability to be their highest priority, stating “Existing frequency-related operational challenges mean that immediate action is required to reduce frequency stability risk. The need for mitigation will continue to grow over time as the generation fleet continues to transform.” Several actions are listed, including increasing arming levels of Fast Frequency Response (FFR) and procuring more FFR services by 2025.
The AESO sees System Strength as a localized challenge in pockets of the system in the near term but increasing in significance if not mitigated soon. Actions will include changes to renewables interconnection requirements and controls and possible market-based solutions.
Flexibility Capability is manageable today but will become more challenging as more variable generation sources are added. Potential solutions include increased levels of regulating reserves and incentives for flexible dispatchable generation.
Complex systems, such as the power system, respond to changes in ways that can be difficult to model and predict. The relatively recent power system changes associated large additions of renewable generation, increasing levels of distribution connected generation, and changing demand patterns are now combining in ways that were difficult to fully predict and plan for just a few years ago.
My concern: the characteristics of the Alberta grid have changed to an extent that we are now at risk of a blackout in the next 2 years if something isn't done to restore the resilience of the system.
My ask: Alberta and federal policy makers please read the AESO's report, consider the impacts of the current electricity sector policies on system reliability, and make power system resilience and reliability a non-negotiable, explicit, and companion policy objective to carbon neutrality. You cannot just assume reliability will happen with the energy transition, you must make it an explicit priority and fund it in parallel with green energy.
Policy makers in Alberta and Canada would be wise to look back on the Principles articulated in the Alberta DOE's 2005 Electricity Policy Framework as they consider the evolution of Alberta's power system and market towards a lower carbon future. While the policy direction on net zero in Canada is not explicit market policy per se, it does have significant impacts on our market and power system and these 2005 principles have stood the test of time and should be a starting point for any changes contemplated. Here are the Principles and links to the 2005 Electricity Policy Framework and the companion 2003 Transmission Development Policy:
2005 Alberta Electricity Policy Framework Principles:
1. The market framework must ensure that, over time, reliability is not compromised – the reliable delivery of electricity is the bedrock of Alberta’s economy.
2. The market framework must be guided and founded on fair and sustainable market and competitive forces.
3. The market framework must provide market signals to build new supply in a timely manner to meet growing demand while recognizing the lead-time required building new generation.
4. The market framework must provide confidence to investors and customers, and be supported by a clear and stable policy and regulatory framework.
5. The market framework must continue to preclude the exercise of market power and unwarranted transfer of wealth.
6. The market framework must accommodate the current state of restructuring and be flexible and adaptable to support the desired end state without any major government intervention.
7. The market framework and any required refinements must ensure the needs of all market participants, including the residential, farm and small business customers, are satisfied.
8. The market framework and any refinements or transition needed between the current and final states, must be fair, as orderly as possible, and provide certainty to existing and new market participants.
Applying these principles to the energy transition in Alberta is a good starting point to ensuring both continued system reliability and resilience and competitive outcomes as our system continues to evolve.