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FERC to require new generators to have frequency response capability

Citing reliability and other concerns being created by the growth of wind power and other intermittent generation resources, the Federal Energy Regulatory Commission on Feb. 15 issued a final rule revising its regulations to require all new generators, with a few exceptions, to have the ability to provide frequency response.

Frequency response service requires a generator to change its output automatically, within seconds and for very short periods of time, to dampen large changes in grid frequency. In North America, that frequency must be maintained at roughly 60 hertz or the grid becomes unreliable. Primary frequency response, or PFR, is key in the initial stages of frequency control and occurs in the first few seconds after a frequency event.

Currently, the agency does not require generators to provide PFR or new generation resources to have frequency response capabilities as a precondition of interconnection. However, FERC has expressed concern that fewer generators are now capable of providing frequency response given the growth of variable energy resources, such as wind and solar, which traditionally were not built with that capability because of the high cost of doing so.

But that has changed, as new technology and equipment now allow a variable energy resource to provide frequency response much more easily and cheaply. Thus, after first floating the idea through a notice of inquiry and receiving mostly positive feedback, FERC in November 2016 proposed a rule that would require almost all new generating facilities interconnecting with the grid to be capable of providing PFR and to establish certain operating requirements.

Nuclear power plants would be exempted from the rule because of restrictions in their operating licenses. In addition, FERC proposed not to impose a generic "headroom" requirement to ensure that generating facilities can boost their real power output in response to under-frequency conditions or to require that new generating facilities be compensated for complying with the proposed requirements.

Stakeholders weighing in on the proposed rule mostly were supportive of the initiative. For instance, wind interests agreed that new wind generators could meet the proposed new requirement at a relatively low cost — in many cases, by simply changing the software settings of new wind turbines. They further agreed that FERC should not impose the new requirement on existing generators, citing the costs involved in retrofitting existing wind generators to meet such a requirement.

As outlined by staff during the agency's Feb. 15 regular open monthly meeting, the final rule — Order 842 — largely reflects the proposal, with agency officials stressing that it is intended to address the increasing impact of the evolving generation resource mix. Moreover, the agency said the reforms reflect recent technological advancements and address potential unduly discriminatory and preferential treatment of new generating facilities.

Thus, FERC now will require that all new generating facilities install, maintain and operate equipment capable of providing primary frequency response as a precondition of being allowed to interconnect with the power grid. The final rule also establishes certain minimum, uniform operating requirements.

As in the proposed rule, existing generating facilities will not be subject to the new requirements unless they take certain actions, such as making major modifications to an existing facility, that require the submission of a new interconnection request. The commission also agreed that nuclear facilities indeed should be exempt from the final rule.

However, in a major change from the original proposal, FERC decided that certain combined heat and power facilities should also be exempt from the final rule. Such facilities usually perform a dual function in that they generate electricity but also produce thermal energy that is used in manufacturing and other industrial processes. Requiring those facilities to provide PFR could impact combined heat and power facilities' ability to perform their thermal function, the commission reasoned.

A second major change from the proposal is that Order 842 addresses the unique physical and operational characteristics of electric storage resources. It requires transmission providers to include in their interconnection agreements specific accommodations and limitations on when electric storage resources will be required to provide primary frequency response. As such, newly interconnecting electric storage resources will be required to specify an operating range representing the minimum and maximum state of charge over which the resource will provide primary frequency response.

But consistent with the proposed rule, staff said the final rule does not impose a headroom requirement nor mandate that generators be compensated for complying with the rule's requirements.

Before voting on the rule during FERC's Feb. 15 meeting, Commissioner Cheryl LaFleur applauded the initiative, recalling her previously stated desire for FERC to work to sustain the reliability and resilience of the grid while adapting to the changing resource mix.

"Today's final rule on frequency response is such an action," LaFleur maintained. "The collective ability of the power system to respond to a loss of generation event is essential to ensuring the reliable operation of the bulk electric system."

The commissioner also praised Order 842 for recognizing the unique operational characteristics of different resources, such as combined heat and power resources, nuclear generation and storage resources.

Finally, while LaFleur agreed with the decision not to require compensation or the development of a mandatory primary frequency response reliability standard at this time, she said the agency should monitor the situation "and consider additional actions to ensure adequate frequency response if and as appropriate."

The rule will take effect 70 days after publication in the Federal Register. (FERC docket RM16-6)