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FERC proposal for new generators to provide frequency response mostly applauded

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FERC proposal for new generators to provide frequency response mostly applauded

Stakeholders, including wind interests, weighing in on a proposed new FERC rule that would require all new generators to have the ability to provide frequency response, were mostly supportive of the initiative.

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, which in North America 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 equipment now allows 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 last November proposed a rule that would require 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 decided 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 require that new generating facilities be compensated for complying with the proposed requirements.

AWEA on board

In recent comments, the American Wind Energy Association said it does not oppose the proposed rule because FERC chose not to mandate the reservation of headroom for the provision of PFR.

"From our perspective, this is the most important issue in the NOPR," AWEA said. It argued that a blanket requirement for all resources to reserve capacity to provide PFR service "would be inefficient and result in excessive costs for customers, as at any point in time many other resources can provide PFR at minimal cost."

Moreover, the group said the lack of compensation for providing the service could undermine developer efforts to sign long-term power purchase contracts or obtain financing.

AWEA 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. It 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.

However, the trade group took issue with the notion that the primary cause of the declining supplies of PFR is variable energy resources, claiming that most of the blame lies in the failure of conventional generation to provide sustained PFR.

AWEA therefore urged the agency to focus on resolving that problem, including by adopting a notice of proposed rulemaking provision prohibiting generators from setting plant dispatch controls in a way that would "inhibit" response, except under certain operational constraints. It also warned about certain types of resources, such as very fast-responding wind plants, providing a disproportionate share of PFR and incurring a disproportionate cost burden from doing so.

AWEA asked FERC to clarify that "adjustments to the response speed of non-synchronous resources, when done to ensure coordinated response for the system operator and fair distribution of cost impacts across resource types, does not 'inhibit' response within the meaning of the NOPR or, if it does, are within the scope of the operational constraints permitted under the NOPR."

Finally, AWEA urged FERC to require RTOs and ISOs to establish markets for the provision of PFR service.

The Edison Electric Institute also said it supports the proposed new rule, citing new technology allowing all new generators to add PFR capability at a low cost. In doing so, however, the trade group for investor-owned utilities urged FERC not to dictate specific governor settings, insisting that the range of settings should be determined by regional needs and through other contractual or market mechanisms.

"There are significant differences among resource types and interconnections as well as cost considerations that make regional tools such as tariffs more effective for establishing operating requirements than the pro forma interconnection agreements," the EEI said.

The EEI agreed with AWEA that the proposed new requirements will not address all of the related reliability and implementation issues raised in the NOPR and therefore urged the agency to look at those issues more closely by holding technical conferences in different regions.

The group also agreed with FERC that nuclear generating facilities should be exempt from the proposed new requirement, citing restrictions in their operating licenses on the amount of primary frequency response, if any, they can provide for safety reasons.

NERC still deciding if more action needed

Also chiming in, the North American Electric Reliability Corp. said the proposed new requirements are consistent with its reliability assessments and determination that the rapidly changing resource mix may reduce the level of available frequency response.

But the organization said it is still studying the need for possible additional steps, including whether existing generators should be required to have PFR capability as well and if reliability standards need to be changed. NERC said it expects to complete that process by July 1, 2018.

NERC also agreed with FERC's decision not to impose a generic headroom requirement, explaining that it already has a reliability standard requiring balancing authorities to have adequate headroom in this regard.

Disagreeing with the rest of the groups, the Energy Storage Association said that to prevent undue or discriminatory burdens on electric storage resources, FERC should direct RTOs/ISOs to make provision of primary frequency response a compensated service, citing the unique burdens to advanced electric storage resources should PFR service be a requirement.

A group of public interest organizations, headed by the Sierra Club, said the FERC proposal is an appropriate interim step. In particular, they said FERC's decision not to require generators to maintain headroom in order to provide PFR service addresses its concerns about the most significant adverse impacts of a mandate.

However, the groups urged the agency to explore more long-term measures other than mandates, such as encouraging competitive procurement of fast-acting demand response from storage and demand-side resources as well as generators, and removing disincentives to providing the service. (RM16-6)