Mr. Neil Millar – Executive Director, Infrastructure Development
(including in the field of Power Transmission) as well as other Executives and
Departmental Heads at CAISO met with EVNNPT’s
delegation.
At the meeting, Mr. Neil Millar and CAISO’s Departmental Heads gave
EVNNPT’s delegation a general
introduction and a great deal of invaluable information about the field of
power transmission and the power system in California and in the United States,
especially in terms of their the organizational structures, scales of management
and other relevant issues.
Image 1: EVNNPT’s delegation
with CAISO’s representatives
According to Mr. Neil Millar, the power industry in the United
States is managed by the States’ Department of Energy, under direct regulations
of the Federal Energy Regulatory Commission (FERC). The FERC is responsible for
regulating the power transmission field (as well as natural gas and oil) in the
states within the boundary of the U.S. In order to ensure the FERC’s
independence and impartiality, U.S. President as well as the Congress are not
authorized to influence FERC’s decisions. These decisions can only be reviewed
by the Federal Court.
NERC – or North American Electric Reliability Corporation- is under
the supervision of the FERC, and is a international non-profit organization
whose goal is to ensure the reliability of the power system in North America.
In 2006, FERC assigned NERC as the Electric Reliability Organization (ERO),
which grants NERC the right to supervise and regulate the power market. NERC’s
scope of management includes the United States, Canada and the Northern parts
of Baja California (Mexico) with more than 334 million people.
The U.S.’ power system is divided into three main parts – the
Western and Eastern power systems and a power system in Texas regions (as in
Image 2). These three systems operate independently and are only slightly
connected. The Western and Eastern systems are both connected to Canada’s power
system (with 37 connection lines of 69 kV and up)
Image 2: General overview of
the U.S.’ power system
The U.S.’ power system is managed by Regional Transmission
Organizations (RTOs) and Independent System Operators (ISOs). These RTOs and
ISOs were founded based under FERC’s recommendations. The roles of these RTOs
and ISOs are relatively similar. In order to become an RTO, an ISO would have
to submit a request to the FERC while meeting the minimum requirements set out
by FERC. ISO is tasked with regulating the regional power system and the
wholesale power market, as well as ensuring the reliability of the regional power
system. RTOs have a similar role to ISOs, but they are given more
responsibilities in the power system based on the requirement of the FERC. RTOs
regulate, control and supervise the operation of the power systems in the
regions they are in charge of. RTOs are also responsible for keeping the
process to connect to the power transmission system a fair process. ISOs and
RTOS also participate in making plans to balance the demand and supply of power
in the region. Before ISOs and RTOs were founded, independent power companies
are responsible for the management and operation of the regional power systems.
At the moment, in regions without the presence of ISOs and RTOs, these
independent power companies would continue to play this role. As seen in Image
3, ISOs and RTOs are not available in most of the U.S., especially in the South
Eastern and Western parts. However, the power companies in these regions still
have to comply with the FERC’s regulations. The Electric Reliability Council of
Texas (ERCOT) is the only organization that is not under the management of the
FERC in the field of power transmission and in power wholesale. However, ERCOT
still have to comply to NERC’s regulations on reliability.
There are currently seven ISOs in the U.S.:
1. CAISO - California Independent System Operator.
2. NYISO - New York Independent System Operator.
3. ERCOT - Electric Reliability Council of Texas
4. MISO - Midcontinent Independent System Operator.
5. ISO-NE – Independent System Operator - New England.
6. AESO – The Alberta Electric System Operator.
7. IESO – The Independent Electric System Operator of Ontario.
There are four RTOs:
1. PJM – an RTO in Pennsylvania - New Jersey -Maryland.
2. MISO - Midcontinent Independent System Operator, also
serves as an ISO.
3. SPP – Southwest Power Pool.
4. ISO-NE – Independent System Operator – New England, also serving
as an ISO.
The scopes of management of RTOs and ISOs are described in Image 3
below.
The power system of the U.S. has more than 7,300 power plants and
more than 965,600 km of power lines, of which 386,240 km of lines are from 230
kV and up.
The composition of power sources in 2017 is as follows: two thirds
of the power plants utilize fossil fuels (natural gas, coal and oil), of which:
natural gas takes up 43.09%, coal 24.43%, oil 3.8%, nuclear 8.95%, renewable
energy sources 18.6% (of which hydroelectric power sources account for 8.45%,
wind power 6.86%, bioenergy 0.96%, solar energy 2% and geothermal 0.33%) and
other sources 1.13%. The total power capacity in 2017 in the U.S. was around
1,190.521 GW (ranked 2nd in the world only after China and is 26.2 larger than
Vietnam’s capacity), peak capacity of the entire system was 800 GW and consumed
energy accounted for 22% of the world’s power consumption.
Image 3: Scopes of management
of RTOs and ISOs in the power system of the U.S.
The power transmission systems are operated at different voltage
levels: 115 kV, 138 kV, 161 kV, 230 kV, 345 kV, 500 kV and 765 kV.
There are more than 3,200 power organizations in the U.S. serving
145 million customers. These power organizations include:
- Investor-owned utilities (IOUs): IOUs’ scope of management
involves one or a few states. The generation, transmission and reselling of
power of these companies are under the regulation of the FERC. Power
distribution and retails from these companies are under the management of the
State government.
- Non-profit organizations under the management of city or local
governments: Universities and military bases may own this type of companies.
These companies are often not regulated by the FERC or State governments, but
local governments.
- Co-Ops: are non-profit organizations owned by their members.
These organizations function under the democratic management models. These
co-ops often serve the rural areas.
- Federal organizations with one typical example being the
Bonneville Power Administration (BPA), Tennessee Valley Authority (TVA),
Southwestern Power Administration (SWPA), Southeastern Power Administration
(SEPA) and Western Area Power Administration (WAPA). These organizations are
power wholesalers who provide electricity for other organizations, mainly in
urban areas.
- Independent power producers: private companies which owns and
operates power plants. These companies sell power to other power companies or
to power consumers directly.
CAISO’s executives and departments also gave an introduction on
their organizational structure and fields of operation, specifically:
CAISO was founded in 1966 as a non-profit organization when the
California’s government restructured the power market per FERC’s
recommendation. The Energy Policy Act, which came into effect since 1992,
removed barriers in terms of competition in the power wholesale market. CAISO
is under FERC’s management because Federal power transmission has to comply
with the Federal Commercial laws.
CAISO is responsible for supervising the operation of the majority
of California’s power system and the power markets with more than 100 members.
CAISO’s priority is to “operate the grid reliably and efficiently, provide fair
and open transmission access, promote environmental stewardship, and facilitate
effective markets and promote infrastructure development”. CAISO is one of the
biggest independent system operators in the world, providing around 260 billion
kWh for their customers annually.
CAISO is in charge of regulating one of the biggest and most robust
power systems in the world, with almost 1,000 power plants having a total
installed capacity of 72,000 MW (peak capacity is 50,270 MW and reserve
capacity is around 13%) and 41,843 km of power transmission lines ( of which 10
lines are connected with the power transmission systems of other states) to
provide an annual average power output of 237 billion kWh for more than 83%
load of California with more than 30 million customers in California and part
of Nevada.
CAISO also operates the power wholesale market of California using
advanced technnoligies to meet their customers’ demand for power at the lowest
costs at any time. The market is regulated by the automatic bidding rule every
5 minutes in a day, creating 4,600 price levels and 29,000 transactions per
day.
CAISO is the only independent system operator in Western United
States to ensure fair access to all participants in the market. CAISO is not
for profit in any segments of the market; every power generators can sell power
to any customers.
CAISO’s policies in terms of fair access as stated above are
applied to power organization in nearby states. CAISO helps the power
organizations in Western U.S. access a real-time power market and advanced
technologies to allow supply of power at lowest prices to their customers. This
solution is called an Energy Imbalance Market, which helps lower costs, promote
renewable energy consumption and reduce carbon emission and glasshouse effect
for the power organizations in 8 States in the Western part of the U.S.
CAISO’s total installed capacity of renewable energy account for
about 33% of the capacity of the entire system, and can be broken down as
follows: solar energy accounts for 52%, wind energy 29%, geothermal 8%,
hydroelectric 6%, bio energy 4.4% and energy storage accounts for 0.6%. CAISO’s
goal is to source 50% of their capacity from renewable energy by 2030.
Image 4: Power organizations
in the EIM market under CAISO’s management
Other representatives from CAISO also talked about some topics of
EVNNPT’s interests such as:
challenges in renewable energy connection for power transmission systems;
informational security, application of 4.0 Industrial Revolution such as
Internet of Things (IOT), Artificial Intelligence (AI), and Cloud computing in
the operation of the power transmission system…
Image 5: Chairman Dang Phan
Tuong presenting a souvenir to CAISO’s representative
At the end of the meeting, EVNNPT’s
Chairman – Mr. Dang Phan Tuong – thanked CAISO’s executives and representatives
for their warm welcomes and active participation in the meeting to share with
EVNNPT their experience in the management
and operation of the power transmission system./.