In the most recent episode of The Top 3 by E3, E3's Managing Director, Ginger Elbaum, discusses the changing regulatory landscape for participants in the power industry with John Schmoker, Project Manager for NAES NERC Services. John specializes in NERC protection and modeling standards and joins Ginger to talk about some recent grid reliability trends and what those could mean for the power industry.
For an accompanying document showing highlights of the podcast, please go to: https://www.e3co.com/wp-content/uploads/2022/05/E3-Podcast-Grid-Disturbance-Trends_5.18.pdf
For additional information about E3 or NAES NERC Services, please contact Ginger Elbaum at ginger.elbaum@e3co.com.
In the most recent episode of The Top 3 by E3, E3's Managing Director, Ginger Elbaum, discusses the changing regulatory landscape for participants in the power industry with John Schmoker, Project Manager for NAES NERC Services. John specializes in NERC protection and modeling standards and joins Ginger to talk about some recent grid reliability trends and what those could mean for the power industry.
For an accompanying document showing highlights of the podcast, please go to: https://www.e3co.com/wp-content/uploads/2022/05/E3-Podcast-Grid-Disturbance-Trends_5.18.pdf
For additional information about E3 or NAES NERC Services, please contact Ginger Elbaum at ginger.elbaum@e3co.com.
Ginger Elbaum (9s):
Welcome to the top three by E3, a monthly podcast about the intersection between engineering energy and project finance. I'm Ginger Elbaum, managing director at E3 Consulting. And I'll be your host today. I'd like to introduce John Schmoker joining us today from NAES Corporation. John is a Project Manager for NACE NERC Services, specializing in NERC protection and modeling standards. He's here today to talk about some recent grid reliability trends and what those could mean for the power industry. So welcome to the podcast, John.
John Schmoker (39s):
Hi Ginger. Thanks for having me.
Ginger Elbaum (41s):
Thanks for being on. So John, let's just jump right into it and talk about what's happening. So as I understand it, there've been several significant grid disturbances over the past 12 months perhaps even more than normal. Can you give us a little background on what's happening?
John Schmoker (56s):
It's an interesting time to be in the power industry. I think we can all kind of agree that a power transitioned from more kind of a luxury to more of a necessity a long time ago. And so anytime we have a major grid disturbance that affects lots of people, you know, people are going to take note of that specifically the Federal Energy Regulatory Commission (FERC) and the North American Electrical Reliability Corporation (NERC). Those are the regulators in this space. They're, they're taking a real hard look at sort of the trends that are going on in the industry right now. We've had some power-related regulations for nearly 20 years now. It's kind of amazing how fast that crept up on us, but over those 20 years, we've had around a little less than 20, about 18 major grid events.
John Schmoker (1m 42s):
And some of those were really caused or the effects of those were, were caused by natural disasters. Things like, you know, wildfires, hurricanes, cold weather events, things like that. So, you know, you have to think there's probably going to be some disturbance to, to your, you know, your power supply during those events anyways. So, you know, 18 major events over 20 years, that's, doesn't seem like a massive issue. You know, really one of those events, one of the first ones back in 2003 was really the impetus for starting some of these regulations in the power industry. So the troubling statistic though, is that of those 18 major events, about 60% have occurred in the last five years alone.
John Schmoker (2m 23s):
So there's more of an upward trend to these types of things happening. And most of those events were directly attributable to protection and control issues, ad inverter based sites. So these are sites like wind and solar sites, and that really makes them kind of a natural target for additional scrutiny when we talk about regulation.
Ginger Elbaum (2m 45s):
Well, John, what is NERC's approach to stemming the trend then?
John Schmoker (2m 49s):
Well, you know, NERC in particular, they are really looking for, I guess you could consider it root cause systematic problems that are causing grid stability issues. And so, you know, every time one of these events happens,, they spend a great deal of time and energy. There are a number of people in the industry that put effort into what they call disturbance reports and disturbance reports. They're investigative in nature. They really dive into the causes of the events. And then they also dig into, you know, what, what can be done in the future to prevent these from happening again, the most recent report really was a combination of four separate, fairly large events.
John Schmoker (3m 31s):
And each one of them occurred in California and last summer, each one of them caused about 30 sites to trip offline around a 1,000 megawatts of load loss per event. So they're fairly significant in nature and really the problem or the thing that is the most concerning to it is not necessarily that, you know, that they happened in the first place. It's more of what the results were from a single event moving into kind of a cascading event. So the next approach is really investigating and then trying to provide industry recommendations on what we can do in the future to prevent future occurrences.
Ginger Elbaum (4m 9s):
Okay. So what does NERC propose to keep these events from happening in the future then?
John Schmoker (4m 14s):
Well, there are a number of things that they're proposing. They are legitimate faults in the system, right? And so, you know, we expect there to be a clearing of the fault through the protection of control systems. And so we, we expect, you know, when, when a legitimate fault occurs for, let's say a single site to go down, the cascading nature is an issue. So we knew we had to address that. And NERC is essentially assigned a group but you know they get lots of industry participation, but we have these committees within NERC. There's a whole bunch of different committees, but one of them is the inverter base resource performance subcommittee it's been referred to as the IRPs or, or the IRP TF.
John Schmoker (5m 1s):
That's the task force version of that. But there are a group of industry professionals who they just, they live this, you know, they, they design these sites, they operate these sites, they do a lot to develop and kind of push the industry in the, in the way it needs to go. So they've got this committee who, who are looking at these events and, you know, if you've ever seen the disturbance reports in the past, if you've had a chance to read them throughout time, you can you get the sense that the sense of increasing urgency about these issues, that the language has transitioned from kind of suggestions and recommendations to more languages, stronger and more serious. You know, they're reiterating their points.
John Schmoker (5m 43s):
They want people to do what they're recommending. And so I guess the best way to see this is in the last report, the, from the four major events that just occurred last summer, the very first recommendation that they give is literally a reiteration of the importance to follow the recommendations that were in the previous disturbance report. And in that report, it was pretty much the same. It was we've provided industry recommendations and people need to follow them. So there are really three primary recommendations that NERC has put forth. And, and through that, that subcommittee, the first one is really adopting reliability guidelines and reliability guidelines are not requirements.
John Schmoker (6m 27s):
They're not mandated by the regulatory bodies. They're more suggestions. And to date that really hasn't happened. We haven't seen widespread adoption of reliability guidelines. So they're pushing that forward as a way to solve this is to follow the recommendations that have been provided previously. The second is related to changes to the interconnection process and the interconnection process has some well, they consider inadequacies. Let's say they'd like to see some changes there. And then finally we have kind of a rejuvenation or evolving of the NERC reliability standards to address some of the issues.
John Schmoker (7m 10s):
So when we talk about kind of those three main sub points, the first being the reliability guidelines, and as I, as I mentioned, you know, people haven't widely adopted some of those really what, what NERC is asking folks to do is to look at all of the documents that have been provided over the, let's say the last five years or so, the, these disturbance reports looking at the root causes of the issues. And then those recommendations is to, to follow through with those items without being mandated, you know, without having to be told, without having to be audited and held financially responsible, but to do, I guess, you know, to do the right thing on your own, on the surface, that sounds completely reasonable, but let's face it.
John Schmoker (7m 54s):
There are financial implications to following these recommendations. And sometimes it's tough with the margins that these plants, especially the independent power producers, the margins they run in it, it may not be something that they can just jump right out and do without being mandated. So, you know, that that's part of it, the second major point, the interconnection requirements. That's an interesting, I suppose you'd call it a subtopic, because well since the renewables have become more and more heavily used in the grid, we've seen kind of some of the inadequacies in the interconnection process, the studies that are required to interconnect the performance testing that's been asked for, it's just lacking.
John Schmoker (8m 40s):
There's just not that much there. And we end up finding it on the back end. So the site has an issue in practice, you know, in operation has an issue. And then after doing the investigation, you find, well, it was improperly modeled from the very beginning, the interconnection process wasn't adequate. And so, you know, here we are, we found this issue. So they'd like to address that on the front end, another large portion of it they want to transition from, and this is mirrored in the NERC standards, but they want to transition from a paperwork exercise to more performance-based exercise. So adding performance requirements that are mandated by FERC into the proforma interconnection agreements to, to really mandate folks do this on the, on the front end.
John Schmoker (9m 26s):
They also want to clarify the interconnection requirements, the modeling requirements, they want people to understand what needs to be provided in terms of modeling. And then they want to require this is along the same lines as the performance standards, but, but the acceptance testing, they want to bulk up the acceptance testing to involve a number of other criteria to actually prove that the site can operate the way that that it's modeled. So, that's all within the interconnection requirements. And that's all outside of NERC, which is interesting because, you know, NERC is the regulatory body that is supposed to mandate the reliability of the grid. And then they have all these rules set out for folks to follow in order to do that.
John Schmoker (10m 9s):
But here we are talking about interconnection requirements that are completely outside of networks control, and it's really for taking the reigns and requiring people to do it even outside of NERC. So you can tell they're very serious about it. The third part of it really is the modernizing, I'd say of the NERC reliability standards. And, you know, this is kind of where I come in. This is what I work on on a daily basis. And it's very interesting for me to see this language that they're using, you know, modernize and update that that is in some of their disturbance reports. Most of the NERC reliability standards are written for traditional generation, and that's just plain and simple.
John Schmoker (10m 54s):
That that's what most people knew when they were written and a lot of the renewable terminology and just the way they operate and everything, it just wasn't really considered. And so next push to change, update modernize. Those standards are really prevalent. I mean, I see it on a day-to-day basis. There's just so much going on in the world of NERC with them, changing things, to address some of these issues. They're really, really serious about it. They too are mirroring this transition from a paperwork exercise where, you know, we, we give you this extra requirement. You just give us a, a proof that, you know, you've met this criteria and, you know, you have it on file or you send it to somebody that's all administrative in nature.
John Schmoker (11m 44s):
They're more looking towards performance-based requirements. And that just opens up a whole other ball of wax performance-based requirements have been tried. We have performance requirements and in Tre with the primary frequency response and how those have been used in practice, hasn't been as successful as I think some would have hoped. And so there's a lot of unknowns right now about how all that plays out, you know, how do we implement performance-based requirements? What do they look like? How do we prove compliance with them? I don't think anybody argues that if done well, they won't add to the reliability of the bulk electric system. I think it's a great idea, but how it's implemented is tricky.
John Schmoker (12m 27s):
And so we're going to have to see how that, how that works out. They want to also integrate performance validation. So not only that you, in improving compliance with the performance requirements, we would have the other side of the house. So let's say if you're a generator owner, you would have to prove your performance, but also the transmission side of the system would look at your performance and would also validate that you're performing the way you should perform. So a check and balance there, they are responsible for setting those performance standards. So it becomes very individualistic. At that point, you have to check and understand what your specific transmission planners requirements are, and then that you're following those.
John Schmoker (13m 12s):
So that's interesting. One of the big takeaways from most of these events that have occurred is the issue with voltage in general and PRC 24 is a standard that's written around the requirements for under and over voltage and frequency set points so that you, you do not trip within this certain zone. And it was touted as, as what they call it, ride through standards. So, so facilities, if they were set outside the zone, would be able to ride through certain voltage or frequency events. And unfortunately, that's not what's happened. Those sites may indeed be, have settings outside that zone, but they still trip when they shouldn't trip. And so it defeats the purpose of having that standard.
John Schmoker (13m 52s):
So we're talking about replacing that standard and changing it to a true ride-through standard. And then we have other modeling requirements. So transitioning from positive sequence, dynamic models, not, not moving away from those, but more adding additional functionality in electromagnetic, transient modeling. So it's a whole different process. It's much more involved, but it's also much more useful because you can map in protection and then F once those models are in place, they need a way to monitor everything, to make sure everything's working the way that should, and also to investigate when issues happen.
John Schmoker (14m 34s):
And that's where some of the monitoring data analysis standards come in. So updates to standards like PRC 24, if you put it all together, it's just a massive amount of change in order to address kind of a systematic issue with the pen, the increased penetration of inverter-based technology. So NERC has got a lot of recommendations, and I know that was a lot, but that, that's kind of what they're looking at to address the problem
Ginger Elbaum (15m 2s):
Well, I mean, it makes sense. These grid disturbances have significant impacts on people, right? I mean, it's, it's, it's very impactful. I mean, you think of the Texas event and how, I mean, there were people who lost their lives in those events, right? The reliability of the grid is just life impactful, I guess I would say so. It's, it's, it's critical. It's mission critical. Okay. So, you know, this all sounds really heavy and I just made it heavier, but for those of us who don't speak, you know, speak NERC, and whatnot, one of our love languages here, what is, what does this all mean for NERC in the future?
John Schmoker (15m 41s):
I think there are two sides to that coin. I mean, there's, what does it mean for everyday folks using power? I think it means we hope it means a more reliable grid. We're, we're really looking to prevent these type of systematic issues so that a, you know, at the end of the day, the power stays on them that the lights stay on. So I'm hoping that that's what that means, what it means for, for those of us in the power industry that have to get there, you know, they have to address the problems. It really is a lot of work. There there's a lot of work to be done in order to understand the problems, analyze the possible solutions, and find a way to balance what can be done versus the cost of what can be done and how that will translate to a more reliable grid.
John Schmoker (16m 30s):
So, you know, that balance is tricky. I think, you know, new verbiage of modernizing and update is, is apt. I think they do need to address these issues based on the new technologies that are coming out. And we're certainly doing that. The trend is certainly to force the industry to rethink the way we've approached things in the past and to develop new strategies for working on the solutions to that. They, right now, there's, there's over 20 and it could even be more. Now it's hard to track. Sometimes there are over 20 projects, open projects with NERC right now, which means they're, they're changing. I think those 20 projects impact over 40 standards.
John Schmoker (17m 11s):
So there are just significant changes ahead of us. It's a bit of a rapid evolution. I'd say, you know, as these new technologies come in, we have to address them. And sometimes it's not as quick as we'd like, but it certainly needs to be done. So it's keeping us all on our toes. We're working hard to make sure we can address the issues, but at the end of the day, I, I'm pretty optimistic that after we get all of this done, it will be better for everybody involved. For sure.
Ginger Elbaum (17m 44s):
Yeah, that sounds great. Okay. So, you know, John, this is the top three by three. So if you were to boil all this down, you know, what are the top three takeaways that you'd like for our listeners to walk away with today?
John Schmoker (17m 60s):
Well, I think the first one is just the trend, you know, the trend that we're seeing more of these events, which is kind of the opposite of what we'd like to see, you know, we would love to see the grid being more reliable, not less reliable. So the trend is something that we certainly want to address and regulators are absolutely serious about, you know, stemming that tide, making the grid more reliable. So, you know, we have to keep that in mind in our day to day operations, the second, you know, with the continued penetration of renewables, you know, wind and solar in particular, and now as we move into battery storage and things of that nature, we're looking for innovative ways to solve these types of problems. I think the industry has done a fairly good job independently of getting in there and suggesting ways to address the problems.
John Schmoker (18m 48s):
And we just need to continue that. And the other, I guess, primary point in plea from my perspective is for the independent power producers, utilities folks that are in this industry is to try to be open to following guidance without being forced into a standard. You know, we try not to regulate if possible, and it's great to see people wherever possible using those best practices to solve the issues without having to go through the entire process of developing standards and then having to hold people accountable on the backend. So I think those are my three main points.
Ginger Elbaum (19m 30s):
Those were great. Well, so John, this, this has been really great. Thank you so much for coming on our podcast and just, and discussing grid disturbance trends today. I know you could talk about this topic for hours. So, you know, we may have to do a follow-up down the road, and to our listeners, thank you for joining the discussion. If you have any NERC-related questions for John or any suggestions on future topics for our podcasts, please reach out to us by email at e3co@e3co.com. And John, thank you again. We appreciate your coming on.
John Schmoker (20m 4s):
It was great being here. Thanks.
Ginger Elbaum (20m 6s):
And thank you again to our listeners.