How California Brought Resource Adequacy Challenges to Light

Energy providers and system operators are tasked with making sure that customers have electricity to power their homes, businesses, and industrial processes every second, every hour, every day. Planning processes help ensure that a system is reliable, with adequate energy supply resources to meet demand, known as resource adequacy (RA), and sufficient capacity in the network and supply resources to deliver that energy reliably, often referred to as security. Both aspects are required to meet customer demand reliably. Increasingly the need to ensure adequate flexibility is becoming apparent, in addition to ensuring energy and capacity adequacy.

Multiple simultaneous events led to the recent rolling blackouts in California, highlighting challenges that utilities face in RA planning and raising the question: What research is needed to enhance accuracy in assessing adequacy needs, considering the uncertainty in demand profiles and supply resource mix?

Resource Adequacy Challenges

Distributed energy resources (DER) and demand response (DR) are becoming more critical for RA, and the tools and processes to quantify their contributions to capacity, energy, and flexibility require additional development. The following challenges exist in recasting RA as ‘finding adequate supply-demand equilibrium,’ as opposed to ‘procuring sufficient supply capacity to meet demand’:

• Understanding the physical capabilities of existing and emerging resources, and modeling likely availability given competing and changing use cases, as resource mixes change rapidly around the world;
• Understanding future customer electric use and net demand from the grid as electrification (e.g., heat and transport) and customer-owned DER increase, and understanding their ability to support resource adequacy;
• Identifying a set of scenarios that represent the distribution of methods of resource operation, and uncertainties that can affect investment efficiency as supply and demand become more variable, and as future scenarios occur across a broader range of conditions; and
• Understanding measures that best reflect adequacy and other related considerations, plus designing tools to help executives, regulators, and other stakeholders better assess dynamic system conditions before challenges occur.

Recent events in California highlighted the need to better understand the assumptions underpinning the representation of certain resource classes, including imports, DER, and renewables. This may mean increasing consideration of demand in neighboring regions, to account for the impact on the RA contributions of imports, and a deeper understanding of customer behavior to inform demand-side modeling and account for the adequacy contributions of flexible demand. And, in addition to typical capacity adequacy to meet peak system demand, hourly modeling in California assesses the ramping capability of the system so that sufficient capacity is procured to meet projected renewable generation ramps. Such assessments need to continue evolving so not just capacity, but flexibility and energy, are also sufficient. A recent EPRI white paper describes the performance of the various resource types, and how the CAISO treated them in its existing RA process.

Key Research Needs

Utilities on course for a changing resource mix can expect the range of planning scenarios to increase, which must encompass real-time conditions. To address this, the Electric Power Research Institute (EPRI) proposes the following research topics and the goals to enhance RA and grid reliability.

Resource Modeling

• Understand the physical capabilities of existing and emerging resources, and modeling of likely availability given competing and changing use cases;
• Adapt basic assumptions and modeling approaches to the expected operations over the horizon of the study (typically 1-10 years), for new technologies (e.g., storage, DER) and conventional resources whose operational profile is changing substantially (e.g., combined-cycle gas turbines, nuclear); and
• Balance a forward-looking approach to capture how resources may behave in the future, with the use of historical performance data where available.

Customer Demand Modeling

• Assess the need for RA studies to consider the adequacy contributions of various demand-side resources;
• Create more detail in modeling of future customer demand profiles to aid in identifying the portion of demand that is ‘flexible’ and could contribute to adequacy, and the portion that is ‘firm’ (i.e., exposed to involuntary load shedding); and
• Understand new behaviors (and resulting demand) that may emerge given the interactions between tariffs and incentives available to customers, and the adoption and use of DER and controllable loads.

Planning Scenarios

• Identify the set of scenarios that represent the distribution of uncertainties that can affect the economics or efficacy of investments and/or the methods of operation; and
• Build scenarios reflecting future conditions envisioned with climate change in mind, not merely sampling from historical years.

Metrics, Guidelines and Criteria

• Create updated or new reliability metrics that consider extreme events, new and emerging resources, and demand-side resources; and
• Find the right approach to developing and applying metrics that accurately reflect risks and criteria that maintain resource adequacy at justifiable levels.

Simulation Tools

• Move to chronological modeling (e.g., hourly or 5-minute) instead of simulating only select hours during a year (snapshots);
• Improve the representation of demand-side resources and other emerging technologies and of operational decisions, such as charging storage or using imports;
• Provide that not just capacity, but also flexibility and energy are simultaneously sufficient, recognizing how operations and markets may evolve; and
• Improve the ability to produce more insightful metrics and analyses for decision makers that inform them about how different resource options address shortfalls, enabling actionable strategic-planning insights.

The changing resource mix is occurring everywhere along the electricity supply chain and requires a fully integrated approach to planning that accurately represents the complex interactions of every type of resource. The EPRI white paper includes recommendations for bridging the technical gaps to ensure cost-effective RA.