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Electricity Commission Multiple Frequency Keepers Investigation Alternatives Report

Alternatives Report Issue 1


March 14, 2008

Table of Contents
1. Introduction........................................................................................................................................... 4 1.1 Background................................................................................................................................. 4 1.2 Scope .......................................................................................................................................... 4 1.3 Meeting with Industry Organisations ......................................................................................... 5 1.4 Definitions in this Investigation.................................................................................................. 5 Present Frequency Keeping Ancillary Service...................................................................................... 7 2.1 Transpower System Operator ..................................................................................................... 7 2.2 Generating Companies................................................................................................................ 8 2.3 HVDC Inter-Island Link............................................................................................................. 8 2.4 Frequency Keeping..................................................................................................................... 9 2.5 Time Keeping ............................................................................................................................. 9 2.6 Frequency Keeping Costs ........................................................................................................... 9 Frequency Control Options & Alternatives ........................................................................................ 11 3.1 Option 1: Enhance Existing Frequency Keeping...................................................................... 11 3.1.1 Island Area Control Error ............................................................................................ 12 3.2 Option 2: Apply Autonomous Frequency Keeping .................................................................. 13 3.2.1 Option 2 Alternatives................................................................................................... 14 3.2.2 Autonomous Frequency Keeping Tests....................................................................... 14 3.2.3 System Operator Concerns with Autonomous FK ...................................................... 14 3.3 Option 3: Apply Centralised Automatic Generation Control (AGC) ....................................... 14 3.3.1 Option 3 Implementation Alternatives ........................................................................ 16 3.3.1.1 AGC Regulation Signal Alternatives ........................................................... 16 3.3.1.2 SPD Co-optimisation Alternatives............................................................... 16 3.3.1.3 Combination of Dispatch and Regulation .................................................... 16 3.3.2 HVDC Transfer of Regulation..................................................................................... 17 3.4 Option 4: Apply Scheduling, Pricing, Dispatch without AGC................................................. 17 3.4.1 System Operator Concerns with the SPD-only Option ............................................... 17 Analysis of Options............................................................................................................................. 19 4.1 Common Requirements ............................................................................................................ 19 4.1.1 National FK Market..................................................................................................... 19 4.1.2 Impact of Wind Generation Variability on Frequency Keeping.................................. 19 4.2 Analysis of Option 1: Enhance Existing Frequency Keeping .................................................. 20 4.2.1 Application of HVDC to enhance Frequency Keeping ............................................... 21 4.2.2 Option 1 Recommendations ........................................................................................ 21 4.3 Analysis of Option 2: Apply Autonomous Frequency Keeping............................................... 22 4.3.1 Distributed Frequency Keeping................................................................................... 22 4.3.2 Option 2 Recommendations ........................................................................................ 22 4.4 Analysis of Option 3: Apply Centralised Automatic Generation Control (AGC).................... 23 4.4.1 Automatic Generation Control Changes...................................................................... 24 4.4.2 Option 3 Recommendations ........................................................................................ 24

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Table of Contents
4.5 Analysis of Option 4: Apply SPD without AGC...................................................................... 24 4.5.1 Scheduling, Pricing, and Dispatch Changes ................................................................ 24 4.5.2 Option 4 Recommendations ........................................................................................ 25 Requirements for Recommended Approach ....................................................................................... 26 5.1 Option 1: Enhance Existing Frequency Keeping...................................................................... 26 5.1.1 Technical Requirements .............................................................................................. 28 5.1.1.1 Transpower .................................................................................................. 28 5.1.1.2 HVDC .......................................................................................................... 29 5.1.1.3 Generating Companies................................................................................. 29 5.1.1.4 Market Rules................................................................................................ 29 5.1.2 Implementation Requirements..................................................................................... 29 5.1.2.1 Transpower .................................................................................................. 30 5.1.2.2 HVDC .......................................................................................................... 30 5.1.2.3 Generating Companies................................................................................. 30 5.1.3 Telecommunication Requirements .............................................................................. 30 5.1.4 Operational Requirements ........................................................................................... 30 5.1.4.1 Transpower .................................................................................................. 30 5.1.4.2 HVDC .......................................................................................................... 31 5.1.4.3 Generating Companies................................................................................. 31 5.1.5 Conceptual Overview of FK via HVDC FK Transfer ................................................. 31 5.2 Option 3: Apply Centralised AGC ........................................................................................... 33 5.2.1 Technical Requirements .............................................................................................. 35 5.2.1.1 Transpower .................................................................................................. 35 5.2.1.2 Generating Companies................................................................................. 35 5.2.1.3 Market Rules................................................................................................ 36 5.2.2 Implementation Requirements..................................................................................... 36 5.2.2.1 Transpower .................................................................................................. 36 5.2.2.2 HVDC .......................................................................................................... 36 5.2.2.3 Generating Companies................................................................................. 37 5.2.3 Telecommunication Requirements .............................................................................. 37 5.2.4 Operational Requirements ........................................................................................... 37 5.2.4.1 Transpower .................................................................................................. 37 5.2.4.2 HVDC .......................................................................................................... 38 5.2.4.3 Generating Companies................................................................................. 38 5.2.4.4 Market Issues ............................................................................................... 38 5.2.5 Conceptual Overview of Centralized AGC ................................................................. 38 Cost Estimates for Recommended Approaches .................................................................................. 44 Recommendations for Moving Forward ............................................................................................. 51

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Table of Contents
Attachments Attachment A - Frequency Control and Reserves Market Comparison...................................................... 55 Attachment B - Basslink Interconnector Tasmanian Frequency Control ................................................. 58 Attachment C - Cost of Power Frequency Regulation................................................................................ 63 Attachment D - Conceptual Frequency Control Arrangements for Single National Frequency Keeping Market (Draft) ..................................................................................................................................... 66 Attachment E - EC Market Integration Workstream .................................................................................. 69 Tables Table 4-1: Very High Penetration of Wind Generation Capacity............................................................... 20 Table 5-1: Transpower Implementation Requirements............................................................................... 41 Table 5-2: Generating Company Implementation Requirements ............................................................... 42 Table 6-1: Transpower Cost Estimates ....................................................................................................... 47 Table 6-2: Generating Company Cost Estimates ........................................................................................ 48 Table A-1: Frequency Control Ancillary Services and Reserve Market Comparison ... 55 Figures Figure 5-1: Enhancement with HVDC FK Sharing .................................................................................... 28 Figure 5-2: Load and Generation in Balance .............................................................................................. 31 Figure 5-3: Load Added to North Island and Frequency Droops ............................................................... 32 Figure 5-4: South Island Generation picks up Load and HVDC transfers FK ........................................... 32 Figure 5-5: Centralised AGC Overview ..................................................................................................... 33 Figure 5-6: HVDC Link Frequency Keeping Sharing ............................................................................. 35 Figure 5-7: Load and Generation is Balanced ............................................................................................ 39 Figure 5-8: Load is Added, Frequency Droops,and AGC calculates an ACE ............................................ 39 Figure 5-9: AGC Issues Regulation Signals to South Island and HVDC ................................................... 40 Figure B- 1: The supply system .................................................................................................................. 58 Figure B- 2: Basslink Frequency Controller Objective Function ............................................................... 60 Figure B- 3: Basslink FCAS Transfer Capability ....................................................................................... 62

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1.

Introduction

The Electricity Commission of New Zealand (the Commission) retained KEMA Inc. consultants to investigate the technical feasibility of frequency control systems that enable Frequency Keeping (FK) services to be simultaneously procured from multiple sources and, as an option, centralised Automatic Generation Control (AGC) for the New Zealand power system.

1.1

Background

The Commission has undertaken a strategic review of longer-term development options regarding system operations and the provision of FK ancillary services in the New Zealand power system. This review identified potential enhancements to FK services, including the possibility of extending FK duty to multiple power stations. At present, New Zealand does not have a centralised AGC system in operation. FK services are procured from one generating company in each island. Each generating company has a limited number of power stations that can provide FK duty. The Commissions Common Quality Advisory Group (CQAG) developed a conceptual outline of a mechanism to enable more power stations to simultaneously participate in the FK market. A first step in evaluating the potential economic benefits of this mechanism involves consideration of the technical infrastructure requirements that may be needed in order to enable simultaneous coordination of multiple FK providers, and the estimated cost of such requirements. The Commission requested KEMA to assist in considering the technical feasibility of its conceptual outline, whether any refinements or alternatives are necessary, and likely implementation costs.

1.2

Scope

The Commission requested KEMA to: 1) Assess the technical feasibility of frequency control systems that enable FK services to be simultaneously procured from multiple sources. KEMA to also consider whether any refinements to the CQAGs conceptual outline are necessary. 2) Assess the technical feasibility of a centralised AGC system of the type traditionally employed to coordinate the dispatch of multiple generators to maintain system frequency. 3) Identify, for both of the above systems, technical and implementation requirements, and ongoing operational requirements, including the likely costs associated with each requirement, to enable the Commission to establish whether the systems are technically feasible and to assess the overall potential net benefits of each system.

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1.3

Meeting with Industry Organisations

In carrying out the services described above, KEMA engaged the Commission, the Commissions advisors, Transpower (the System Operator and Grid Owner), and each of the five main generating companies to ensure a good understanding of current technical arrangements and particular issues that need to be addressed in the New Zealand system context. These arrangements and issues include: 1) Block dispatch of river chain hydro stations 2) The role of local AGC systems within generating companies 3) The role of the inter-island high voltage DC (HVDC) system 4) Technical software and communication requirements for centrally coordinating frequency responses (and regulation in the case of AGC) across multiple power stations 5) Technical interface capabilities to receive and implement frequency control or AGC regulation at generating companies 6) An understanding of how to identify and specify participation factors for various stations or blocks of stations.

1.4

Definitions in this Investigation


1) ACE means Area Control Error - the instantaneous difference between actual and scheduled frequency and power flow between two areas. 2) AGC means Automatic Generation Control the regulation of power output of electric generators within a control area in response to changes in load, system frequency, and other factors, to maintain the scheduled system frequency and interchanges with other control areas. 3) CQAG is the Electricity Commissions Common Quality Advisory Group 4) EGR are the New Zealand Electricity Governance Regulations. 5) EMS means the Energy Management System at the NCC, which contains SCADA and AGC functions.

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6) FK means Frequency Keeping the frequency control services currently performed by one generation company in each island. 7) Genco is a communications system used by the System Operator to issue wholesale market dispatch instructions to cleared generators. 8) GC means the independent competitive electricity Generating Companies in New Zealand. 9) GCCS means the Control System (local AGC system) used by the generating company to remotely control their generators from a central location. 10) HVDC means High Voltage Direct Current and refers to the HVDC link between the North and South islands in New Zealand. 11) NCC means the National Coordination Centre containing the EMS and SPD systems used by Transpower. 12) Replacement Genco communication system means the communication system that will replace the existing Genco communication system and will be capable of transmitting dispatch instructions and regulation signals to the GCCS. 13) RTGEN is the brand name for the AREVA AGC product in the EMS delivered to Transpower. 14) SCADA means Supervisory Control and Data Acquisition and refers to the data acquisition systems used by Transpower and the generating companies. 15) SPD means the System Operators Scheduling, Pricing, and Dispatch software used to establish the generation schedules based on market offers and transmission constraints. 16) The Commission means the Electricity Commission of New Zealand. 17) Transpower is the System Operator and Grid Owner for the New Zealand power system.

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2.

Present Frequency Keeping Ancillary Service

The System Operator procures FK service from providers that can meet the System Operators requirements set out in the Electricity Governance Rules. Providers must make available one or more generating units at an FK site that collectively provide a response rate of at least 10 MW per minute when the grid frequency error is greater than or equal to 0.05 Hertz. When the grid frequency error is less than 0.05 Hertz, the generating unit(s) at the FK site must collectively respond to eliminate the grid frequency error and frequency time error. Each year the System Operator seeks tenders from potential providers of FK and attempts to secure at least one provider of FK in each island. The System Operator procures FK through a half-hour clearing market from FK providers selected through the annual tendering process. Offers to provide FK are sought for each half-hour trading period. Providers must ensure that sufficient generating units are available to provide the required FK MW band of 50 MW when awarded for FK. Frequency Keeping (FK) is only partially integrated into the wholesale market an issue the Commission is looking to address in considering how to improve frequency control arrangements.

2.1

Transpower System Operator

Transpower owns and operates the national transmission grid from the National Coordination Centre (NCC) and performs the System Operator role in the wholesale electricity market in New Zealand. Under normal system circumstances, the System Operator is expected to maintain frequency in each island between 49.8 Hz and 50.2 Hz (the normal band). The System Operator is also expected to ensure that frequency is restored to within the normal band as soon as practical following momentary fluctuations due to system events. In the absence of system events, frequency quality is maintained through a combination of: 1) Mandated generator (free governor action) and HVDC technical performance obligations. 2) 5-minute energy dispatch instructions issued by the System Operator in accordance with market schedules developed by the Scheduling, Pricing, and Dispatch (SPD) software. 3) FK ancillary services procured from generators with the capability to respond much more quickly than conventional free governor action. (These generators have their droop setting at 4% and move faster to reduce frequency excursions). The System Operator uses the market SPD model to formulate energy dispatch instructions to generators, according to their energy and instantaneous reserve offers, to simultaneously satisfy demand and system

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security requirements. The market also accommodates block dispatch of hydro stations to provide the generating company with flexibility to optimise river chain efficiency.

2.2

Generating Companies

There are five main generating/retail companies in New Zealand: Meridian Energy, Contact Energy, Genesis Energy, Mighty River Power, and TrustPower. Generating companies implement energy dispatch instructions issued by the System Operator. At present, there are only four FK providers (two in each island) that meet the System Operators technical requirements with purpose built capabilities: 1) Meridian Energy in the South Island using the Waitaki river chain block of hydro stations 2) Contact Energy in the South Island using the Clutha river chain block of hydro stations 3) Mighty River Power in the North Island using the 10 x 36 MW Maraetai hydro station, and on occasions, the Waikato river chain block of hydro stations. 4) Genesis Energy in the North Island using 4 x 250 MW coal and gas fired Huntly thermal units, and also the Tokaanu river hydro station and the Waikaremoana river chain block of hydro stations.

2.3

HVDC Inter-Island Link

The 40-year-old mercury-arc Pole 1 of the HVDC inter-island link was retired on 21 September 2007. The remaining HVDC system now consists of thyristor Pole 2 rated for 540 MW north and 489 MW south. There are ongoing projects to investigate the possible replacement of Pole 1 and/or upgrade of Pole 2. The technology 1 of the existing control system for Pole 2 discourages making changes to the existing controller design. Any adaptation of Pole 2 for shared FK would have to be done by adding FK to the MW set point that serves as one of the inputs to the existing controller. An overview of the HVDC controller design is presented in a report by Direct Consulting Ltd 2 contained in Attachment D, Conceptual Frequency Control Arrangements for Single National Frequency Keeping Market.

1 2

Transpower Annual Planning Report 2007 (Incorporating the Grid Reliability Report) 30 March 2007. Conceptual Frequency Control Arrangements for Single National Frequency Keeping Market Report from Direct Current Consulting Ltd. By John Gleadow 20 August 2002. Mr Gleadow is currently Senior Advisor Transmission, Electricity Commission. (See Attachment D to this report)

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Although the use of an HVDC link for frequency control is a proven concept as illustrated by the Australian Basslink Interconnector 3 between Tasmania and the mainland, additional investigation is required to determine the best way to utilise the existing Pole 2 to transfer FK and achieve: 1) Sharing of FK service under normal conditions 2) Frequency stabilisation in response to large events.

2.4

Frequency Keeping

Frequency Keeping (FK) ancillary service providers are contracted by the System Operator according to offered prices in a half-hourly market to keep frequency in each island close to 50 Hz and to manage time error within specified limits. The System Operator issues dispatch instructions via the Genco communication system to maintain the FK provider in each island within its contracted FK MW band (typically 50 MW in each island, with provision for 25 MW overnight and 75 MW high bands in the South Island). Providers must be capable of increasing or decreasing output by 10 MW per minute or more. With increasing amounts of wind generation being developed in New Zealand, the FK quantity and response required from frequency keepers is expected to increase over time (unless frequency standards are relaxed). Refer to Section 4.1.2, Impact of Wind Generation Variability on Frequency Keeping.

2.5

Time Keeping

The need for time keeping is still the subject of serious debate in many parts of the world. The general opinion held by many power grids is to maintain Time Error within some limits. The current New Zealand time error correction requirement (via the Frequency Keeper) is 5 seconds with a zero crossing once per day.

2.6

Frequency Keeping Costs

The Commission is concerned that FK procurement costs increased significantly in recent years. The Commission is currently reviewing interim measures to enhance the way FK providers are selected with a view to reducing procurement costs. However, the trend towards more wind supply and increasing costs (and other factors) has prompted the Commission to investigate the longer term development possibility of maintaining FK across multiple sources.

Basslink Interconnector Tasmanian Frequency Control (see Whitepaper prepared by KEMA, Attachment B to this report)

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There is a significant cost to participant generators caused by the existing FK whenever frequency moves away from 50 Hz. If the frequency moves to the extremes of the normal band, then the generators with a 4% droop setting are likely to be 10% away from their assigned energy dispatch. This movement can cause lost efficiency, rough running, and resource consent issues. Widening the FK band makes these issues worse. Commission observations are: 1) Direct costs for FK for the year ending August 2006 were approximately $60M, and have risen by more than 400% over the last five years. 2) There are concerns that significant levels of additional variable generation (in particular wind) will increase FK requirements and procurements costs. 3) Few generators meet specified technical performance requirements for providing the FK service (e.g., MW ramping rate and MW range requirements). Indirect costs are difficult to quantify but a previous survey suggests that if the normal frequency band (49.8 Hz to 50.2 Hz) were to be widened, most customers would probably be indifferent but some generators are likely to incur extra costs due to mechanical wear and tear and efficiency penalties because of free governor action).

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3.

Frequency Control Options & Alternatives

This section describes four options, and alternatives to some of the options, considered for controlling power system frequency. These options and alternatives resulted from a review of frequency control 4 practices in Australia and Great Britain and from meetings in New Zealand with the Electricity Commission, the Transpower System Operator, and the following generating companies: Contact Energy Meridian Energy Genesis Energy TrustPower Mighty River Power. The options considered for frequency control have been identified as follows and represent a composite of opinions and suggestions, resulting from interviews, site visits, and the review of practices in other countries: Option 1: Enhance Existing Frequency Keeping (FK) One generating company per island Option 2: Apply Autonomous FK Multiple generating companies per island Option 3: Apply Centralised Automatic Generation Control (AGC) Directed by the System Operator Option 4: Apply Scheduling, Pricing, and Dispatch (SPD) without AGC Directed by the System Operator Each of these options is described in the following sections.

3.1

Option 1: Enhance Existing Frequency Keeping

The existing FK approach, consisting of a single frequency keeper in each island, was reviewed with the objective of determining potential improvements that could be implemented with relatively minor impact on the ancillary services market and on power system operation. The following enhancement opportunities were identified for consideration:

Attachment A presents a comparison of frequency/reserves Markets for New Zealand, Australia, and Great Britain.

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1) Close-up the present rule-based dispatch latency 5 that produces delays in implementing dispatch instructions. Note that frequency deviations observed in New Zealand are characteristic of a small system with varying load characteristics, such as a 30MW rolling mill at a steel works. 2) Encourage compliance to offered energy ramp rates. New Zealand Electricity Governance Regulations (EGR) require generators to offer their maximum ramp rate, not their expected ramp rate. Energy ramp rates are currently offered but not dispatched by the System Operator. Compliance to dispatch ramp rates would improve the accuracy of SPD. 3) Shrink the present frequency control band requirement in the HVDC link controller to less than the present 0.2 Hz frequency difference. Note: Observation of the frequency difference between islands indicates the HVDC controller is currently controlling to reduce frequency differences below the 0.2 Hz requirement. 4) Shrink the present 50 MW FK band for each island. The FK band may also vary based on different frequency control requirements through the day. Application of the above identified enhancements has the potential to improve the quality of island frequency and reduce FK costs.

3.1.1

Island Area Control Error

One of the frequency keepers that has an AGC-type program indicated that its FK service could be improved if the System Operator could send an Area Control Error (ACE) signal, representing the required amount of generation correction. This would be an improvement over the FKs own procedure for calculating ACE using an estimated frequency bias factor. Since the System Operator has greater knowledge of each islands conditions, the System Operator is in a position to make a better estimate of the prevailing frequency bias factor. Transpower could develop a calculation to calculate the bias factor for each island, based on equipment in service, and calculate an area control error from frequency deviation and bias in MW/0.1 Hz. This can be initiated by Transpower or by the EC writing enabling rules. While this may help improve FK service for a frequency keeper with an automatic control system, it does not address the high costs of procuring

Rule 4.9.3 of section III of part G of the Rules requires a generator or ancillary services agent to acknowledge a dispatch instruction within four minutes of receiving the instruction and to use reasonable endeavors to acknowledge a dispatch instruction within three minutes of receiving the instruction. The current rules do not specify any minimum time to respond to a dispatch instruction.

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frequency keeping from a single supplier in each island, particularly in the North Island, as described in Section 2.6, Frequency Keeping Costs. In response, the System Operator indicated that it presently does not calculate ACE for either the North Island or the South Island. Such calculations would need to be performed in conjunction with any future implementation of a Centralised AGC (Option 3) with minor enhancements to dynamically calculate island frequency bias factors. The frequency bias factor calculations are not typically included as part of standard AGC programs.

3.2

Option 2: Apply Autonomous Frequency Keeping

This option expands the existing FK approach to multiple generating companies within each island. Each selected provider would manage frequency within its assigned FK band, using a suitable controller. Although Option 2 can be characterised as a decentralised frequency control approach, there is no intention for this option to emulate the decentralised frequency control approach and associated ancillary services market adopted by Great Britain (refer to Attachment A, Frequency Control Ancillary Services and Reserves Market Comparison). This option is an expansion of the present single-generating company FK system. The purpose is to: 1) Encourage greater participation in the FK market by accepting FK offers from more generating companies in the North and South Islands. 2) Improve overall electricity production efficiency by spreading a given amount of total regulation over a greater number of generators 6 and allow FK stations to operate closer to their optimum efficiency point. 3) Increase the overall MW/minute FK rate of response. For example: a) 50 MW from one generator @ 5 MW/min takes a total of ten minutes to reach 50 MW. b) 50 MW assigned evenly and simultaneously among ten generators with each @ 5 MW/min takes a total of one minute to reach 50 MW.

See Example in Attachment C, Cost of Power Frequency Regulation.

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3.2.1

Option 2 Alternatives

The following alternative implementation approaches were suggested: Alternative 1: Each selected generating company, with a suitable controller, has an assigned FK band. The System Operator is the designated time keeper and sends scheduled frequency set point instructions to each generating company to correct time error. This alternative could be implemented with or without FK sharing via the HVDC link. However, FK sharing via the HVDC link is the preferred approach (likewise for alternative 2 below). Alternative 2: Each selected generating company, with a suitable controller, has an assigned FK band. A generating company in each island is chosen to be the time keeper in addition to its FK assignment.

3.2.2

Autonomous Frequency Keeping Tests

Option 2 (Alternative 2 without HVDC link FK sharing) has been tested by one of the present FK generating companies by dividing FK among three of its stations and designating one of them to be the time keeper. Although feasibility has been established for the ability to perform autonomous FK within a single generating company, field testing and/or modeling and simulation would be required to define a robust common controller design and to verify stable (non-hunting) FK across multiple generating companies.

3.2.3

System Operator Concerns with Autonomous FK

The System Operator expressed the following concerns regarding autonomous FK: 1) Stability of FK uneven regulation could occur between generators and some generators could be driven to the ends of their FK bands. 2) Responsibility for FK is distributed between several generating companies within an island. Compliance is difficult to measure and enforce, since no single generating company within an island would be accountable for FK.

3.3

Option 3: Apply Centralised Automatic Generation Control (AGC)

Centralised Automatic Generation Control (AGC) is the traditional approach to FK and AGC proof of concept is evident in its wide application. In this option, the frequency in each island is controlled by Transpowers EMS Real-Time Generation (RTGEN) (AGC) program from the NCC in Wellington. This

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option also needs to be coordinated with the HVDC inter-island link to transfer frequency control between islands. An AGC interface approach to the existing HVDC controller is shown in the Direct Current Consulting Report (see Attachment D, Conceptual Frequency Control Arrangements for Single National Frequency Keeping Market). In the event that a new HVDC controller is installed ahead of Option 3 implementation, then alternative interface design approaches should be considered. Island power systems that are similar to New Zealand in size have implemented various forms of frequency keeping and Automatic Generation Control (AGC) (refer to Attachment A, Frequency Control Ancillary Services and Reserves Market Comparison). Australia and Tasmania have implemented centralized Automatic Generation Control (AGC). In addition, other island power systems that have implemented centralized AGC include Puerto Rico and ERCOT in Texas among others. Transpower is in the process of upgrading the EMS and has plans to upgrade the existing Genco communications system to a replacement Genco communication system, between the NCC and each Generating Company Control System (GCCS), in the near future. The EMS upgrade includes an RTGEN (AGC) program that will not be initially licensed for use. Activation of the new RTGEN (AGC) program for use in this option will require licensing and customised interfaces to other programs and databases, in particular the Scheduling, Pricing, Dispatch (SPD) system model and the HVDC dispatch setpoint. For this option, the generating companies prefer to receive separate instructions for energy and for regulation. The energy dispatch instructions would continue to be sent from the NCC to the GCCS via the replacement Genco as they are now. The regulation signal (for individual generators, or a block of generators) would also be sent via the replacement Genco to the AGC control system of the generating company for distribution to individual generators. Separation of instructions allows the generating company to allocate energy and regulation independently to generators and to monitor both dispatch instructions and regulation signals for settlement purposes. The System Operator is the designated time keeper for this option. The method of allocating the frequency regulation signal to each generating company can be adapted to the individual generating companys energy offers and generator control schemes. Specifically, Transpowers AGC program would calculate ACE for each island and allocate a regulation signal as follows: 1) Regulation signal for a single generator or station within a generating company at the same granularity as for energy dispatch 2) Regulation signal for a block of generators within a generating company (for example; the block of hydro stations on a river chain) at the same granularity as for energy dispatch

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3) Regulation signal for the generating company. This can be the generating companys portion of the ACE signal, a raise/lower signal, or a regulation setpoint. For this situation the granularity for frequency regulation does not have to match the energy dispatch. The conventional ACE calculation in a generating companys AGC control system would be bypassed by the regulation signal from the System Operator. The generating companys AGC generator control scheme would continue to be used to distribute the regulation signal to individual generators.

3.3.1

Option 3 Implementation Alternatives

Three implementations and associated alternative approaches were identified.: 3.3.1.1 AGC Regulation Signal Alternatives

Regulation signals can be sent to any combination of generators providing the generating company or AGC control system develops a generator model for the desired combination of generators as described below. Alternative 1: AGC sends a single regulation signal to each generating company that has been selected for FK based on their offers. The generating companys control system distributes the regulation signal to selected generators. Alternative 2: AGC sends regulation signals for each generating unit, station, or block within a generating company, i.e., using the same dispatch granularity as for energy dispatch. The generating companys control system distributes station or block regulation to selected generators. 3.3.1.2 SPD Co-optimisation Alternatives

The centralised AGC Option may be co-optimised with SPD as follows. The choice of co-optimisation will need to be coordinated with the market rules: Alternative 1: Regulation product is co-optimised with the SPD energy and reserve market products. Alternative 2: Regulation product is NOT co-optimised with the SPD energy and reserve market products. 3.3.1.3 Combination of Dispatch and Regulation

The centralized AGC Option may combine the Dispatch Instruction and Regulation Signal into one signal or the Dispatch Instruction and Regulation Signal may be sent as separate signals. The choice of combined or separate signals will need to be coordinated with the market rules.

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Alternative 1: A combined Dispatch Instruction and Regulation Signal is sent to each generating unit, station, or block within a generating company. This alternative allows for checking the combined signal against unit, plant, or block ramping and high/low limits in AGC. Note: This alternative is the same as traditional Automatic Generation Control/Economic Dispatch (AGC/ED) programs where the AGC/ED basepoint is combined with the Regulation requirement and the combined signal is sent to the generator. The Dispatch Instruction can be sent to the Generating Company separately for reconciliation purposes. Alternative 2: A separate Dispatch Instruction and Regulation Signal is sent to each generating unit, station, or block within a generating company. In this alternative, the separate signals can be combined in AGC or by the Generating Company Control system to check against unit, plant, or block ramping and high/low limits. In this alternative, the separate signals can also be used by the Generating Company for reconciliation purposes.

3.3.2

HVDC Transfer of Regulation

The centralised AGC option can operate in parallel with the present HVDC frequency controller where AGC can include direct control of HVDC regulation transfer. AGC calculates ACE in each island and sends regulation control signals to each generator, power station, block of generators, or generating company in both islands in a national FK market and, at the same time, calculates an HVDC regulation signal and adds it to the HVDC dispatch instruction sent to the HVDC control system to provide regulation transfer across the HVDC link. The present HVDC frequency controller continues to minimise the frequency difference between the islands to support Reserve sharing.

3.4

Option 4: Apply Scheduling, Pricing, Dispatch without AGC

This centralised option, using SPD only, was suggested as an alternative to the traditional approach of executing an SPD dispatch program in conjunction with an AGC regulation program. It should be noted that this non-AGC option has been successfully implemented in vertically integrated (non-market) control areas in the USA that are relatively small compared to the grid to which they are interconnected. Implementation of this option in New Zealand would require that SPD be executed at a much higher periodicity than at present, to the extent that there would be no explicit need for a regulation market. Time keeping adjustments would be inputs to SPD. This option would also need to be coordinated with the HVDC inter-island link.

3.4.1

System Operator Concerns with the SPD-only Option

Although technically feasible with sufficient computer resources, the System Operator expressed concern that this SPD-only option could exhibit the following undesirable side-effects during real-time operation:

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1) The burden of FK would be delegated to those units that are setting the market prices (i.e., the marginal units). 2) The marginal units may not possess fast enough response rates for good frequency control. 3) Fast units may avoid becoming marginal in the energy market to maintain their efficiency. 4) Keeping island frequencies within their normal operating bands may be difficult and unreliable to achieve. 5) This option eliminates FK as an independent ancillary service by merging FK with energy dispatch in SPD. Extensive simulation studies would be required to validate the efficacy and desirability of this option, from an operational as well as an electricity market point-of-view.

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4.

Analysis of Options

This section examines the frequency control options and alternatives that are identified in Section 3 and recommends feasible options. A discussion of requirements common to all options is presented in the following section. In subsequent sections, the four options are analyzed and feasible options are recommended for further consideration.

4.1

Common Requirements

These common requirements are part of the New Zealand power system and apply to all of the options considered.

4.1.1

National FK Market

At the present time the HVDC link between the islands provides the means by which energy can be marketed on a national basis. A logical extension would be to consider implementing a national market for FK, via the HVDC link. This could be accomplished to the extent that the HVDC link can be used to superimpose FK on-top-of the existing scheduled power transfer between the North and South Islands. The use of the HVDC link in conjunction with a national market is discussed in an Automatic Frequency Control report published by Meridian Energy in August 2007 7 .

4.1.2

Impact of Wind Generation Variability on Frequency Keeping

The impact of wind generation on FK has been investigated by Transpower 8 as presented in their report of May 2007. The following conditions (called Scenario C in the Transpower report) are extracted and averaged from the Transpower report.

7 8

Automatic Frequency Control Meridian Energy Advanced Management Programme August 2007. Transpowers May 2007 report, initiated by the Electricity Commissions Wind Generation Investigation Project(WGIP)

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Table 4-1: Very High Penetration of Wind Generation Capacity


New Zealand Island Installed Wind Generation Capacity Percent of Total System Load System Load Change Over 10 seconds System Wind Change Over 10 seconds System Wind Change Over 1 minute System Wind Change Over 5 minutes

North South

1600 MW 650 MW

30 % 30 %

50 MW 50 MW

45 MW 30 MW

210 MW 85 MW

1050 MW 427 MW

As shown in the table, the effect of very high wind generation penetration may require increasing the size of the existing FK MW band from 50 MW to approximately 100 MW per island. The actual required MW amount for FK in each island will need to be periodically reexamined as wind farms are installed and the load demand characteristics change over the coming years. Although wind penetration is not expected to impact FK severely, the greater impact is going to be on the energy dispatch process as performed by SPD. Accurate wind forecasting will be necessary to ease the burden of energy dispatch and to reduce large frequency excursions due to wind. The greatest impact generally occurs when wind begins and diminishes over wide areas, e.g., the onset of storm conditions. To the extent that large changes in wind conditions can be predicted, mitigation measures such as staggered/delayed startup of individual wind turbines and staggered/early shutdown of individual wind turbines can be employed. As shown in Figure 5-2, Centralised AGC Overview, feedforward of coordinated startups and shutdowns can be incorporated into the AGC/SPD design in order to better contain the island wind MW/minute ramp rates to manageable levels. AGC will become increasingly important since more of the existing non-wind generation resources will be relied upon for FK to compensate for the increasing number of commissioned wind turbines.

4.2

Analysis of Option 1: Enhance Existing Frequency Keeping

The following four enhancement opportunities were identified in Section 3.1. 1) Close-up the present rule-based dispatch latency. 2) Encourage compliance to dispatch ramp rates. 3) Shrink the HVDC maximum frequency controller band requirement to less than 0.2 Hz. 4) Shrink the 50 MW FK band for each island.

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These enhancement opportunities can be implemented within the framework of the existing FK market rules.

4.2.1

Application of HVDC to enhance Frequency Keeping

The possibility of utilising the HVDC link to enhance the existing FK approach was examined The existing HVDC control consists of two components: 1) A MW energy flow schedule from SPD that is updated at a 5-minute periodicity 2) A frequency control MW signal that responds very quickly in proportion to the frequency difference between the North and South Islands. As the island frequency keepers return their island frequencies to 50 Hz (or other schedule), the frequency control MW signal to the HVDC decreases to a small value. Essentially, the existing HVDC proportional control is intended for fast support in the event of relatively large island frequency differences. HVDC control was not originally intended for FK sharing between islands.

4.2.2

Option 1 Recommendations
1) KEMA recommends that the four enhancement opportunities for the existing FK approach be considered for interim implementation, since they require the least effort to implement and have the potential to reduce FK costs. 2) KEMA concurs with the Meridian Report (see footnote 7) and recommends enhancing the existing HVDC control to transfer FK service between islands, which has the potential for considerable FK cost savings, in the interim before the centralised AGC option is implemented. However the following issues will require resolution: a) The potential problem of developing and applying the required integral of island frequency differences to the existing energy transfer dispatch sent by the System Operator to the HVDC controller (see Figure 5-1, Enhancement with HVDC FK Sharing). Another technique would be to integrate MW/0.01 Hz to achieve a MW transfer between islands for FK. b) The potential problem of coordinating the two FKs to allocate their FK responsibilities in proportion to their FK MW bands under all conditions. c) The potential problem of determining equitable FK payments.

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d) The need for changing the FK bid allocation methodology between the Islands. e) The potential need for changing the market rules, especially if there is a desire to have a separate raise and lower FK market.

4.3

Analysis of Option 2: Apply Autonomous Frequency Keeping

The desirability of expanding FK, within each island, among generating companies and to as many generators as possible is not disputed. Potential implementation problems, and the complexity of creating market rules to support this option, however, cannot be ignored.

4.3.1

Distributed Frequency Keeping

The basic requirement of this option is to distribute island FK among more generating companies, and thus more generators within each island. FK bidding into the market could result in each generating company being assigned a smaller MW band for FK. To make this approach successful would require that the generating companies within an island be coordinated so that each company responds to an assigned portion of the island frequency error. From a conceptual point-of-view, each company would have to: 1) Measure (and filter) the frequency in an identical and synchronised manner. 2) Calculate the frequency error using a common 50 Hz reference or the scheduled frequency for time keeping. 3) Integrate the frequency error with a common and synchronised integrator design/algorithm. The output of each integrator would represent the same island MW error. 4) Each company would take its share of the island MW error. This share would then be sent to the companys generators. As recognised by the System Operator, the response of the individual generators will determine how quickly island frequency will be controlled and how each company contributes to FK.

4.3.2

Option 2 Recommendations

Since the National Grid (NG) in the UK controls frequency by generators acting on an individual basis (without centralised real-time AGC coordination), it appears that this approach would deserve consideration for New Zealand. A major reason why NGs present approach works is the large MW

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capacity of the UK grid, which is much larger than NZs MW capacity. Load changes and disturbances have a smaller impact on frequency in the UK power system than in the NZ power system. Therefore, the NG approach to FK is not considered to be viable for NZ. KEMA does not recommend implementation of the autonomous FK option for the following reasons: 1) Technical challenge to design/develop a suitable integral type controller to be used by each generating company. 2) Difficulty of obtaining uniform MW ramp rates among the generating companies in order to help keep the generators within their regulating bands and away from their FK band limits. 3) Separate accounting and payment for time keeping and coordination with multiple generating companies. 4) Complex market rules and after-the-fact settlement to determine payments based on each generating companys actual (measured) contribution to FK. 5) Potentially non-reusable integral controller hardware/software 6) Interim use of Option 2 prior to the implementation of the centralised AGC Option 3 will necessitate interim changes as follows: a) Market rule changes b) FK bid processing c) Settlement calculations to determine payments.

4.4

Analysis of Option 3: Apply Centralised Automatic Generation Control (AGC)

The centralised Automatic Generation Control (AGC) approach is proven and widely used. It provides flexibility in electricity market bidding by being able to co-optimise the acceptance and allocation of the various market products on a national basis. Also, the new market rules are expected to be more easily accepted and adopted for this option than for Options 2 or 4.

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4.4.1

Automatic Generation Control Changes

This option will require licensing and modification of the Transpower EMS standard RTGEN (AGC) program in order to provide inter-island coordination and optimisation. 1) The present HVDC controller will not have to be adapted to the Centralised AGC approach to provide a national FK market. The HVDC regulation transfer would be added to the energy transfer dispatch instruction currently sent from the NCC. 2) Regulation signals would be sent via the replacement Genco communications to participating generating companies. 3) Simulation studies and field tuning and testing is recommended before implementation and commercial cutover.

4.4.2

Option 3 Recommendations

KEMA recommends that this option be adopted and implemented in conjunction with other upcoming enhancements to New Zealands power system and system operations. The following advantages are given in support of this recommendation: 1) Utility industry proven technique 2) Adaptable to a national electricity market as illustrated by the Australian market 3) Expected acceptance of the new market rules 4) Improved quality of island frequency and time keeping.

4.5

Analysis of Option 4: Apply SPD without AGC

The objective of this approach is to combine energy dispatch with frequency control in order to develop a single MW control signal for each generation resource (generating company, power station, block of generators, or generating unit). Although this approach has been shown to work in a vertically integrated utility environment, we have not found evidence that the approach has been applied within the electricity market paradigm.

4.5.1

Scheduling, Pricing, and Dispatch Changes

This option would require that SPD be executed at a high periodicity, at least every 10 seconds or less. The planned EMS hardware/software upgrades are not expected to support this requirement.

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4.5.2

Option 4 Recommendations

KEMA does not recommend implementation of the SPD without AGC option for the following reasons: 1) Implementation of this option would require significant hardware and software changes to the EMS and would also require a faster and more reliable communications network than the existing Genco or SCADA communication systems. The existing Genco communication system is not suitable for the required high periodicity. 2) Island frequency control could be difficult to achieve, since there is no direct assignment of specific generation resources to perform frequency regulation. 3) The design for this option would require many modifications/adjustments to achieve the desired results, which would make it similar in complexity to the centralised AGC approach, but at the additional risk of a highly customised, unproven design. 4) Generation resources may consider adjusting their bidding strategies to avoid being the marginal units that would be assigned regulation duties. 5) There would be no explicit FK market distinguishable from the energy market. The costs for FK would be embedded with the costs for energy. Payments for FK and energy would be difficult to separate and assign for settlement purposes.

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5.

Requirements for Recommended Approach

This section describes the requirements for implementing the two recommended options. Tables 5-1, Transpower Implementation Requirements, and 5-2, Generating Company Implementation Requirements, at the end of this section summarise the technical requirements.

5.1

Option 1: Enhance Existing Frequency Keeping


The intent of this suggested enhancement is to allow the lower cost island to provide more FK than the higher cost island. This concept was first suggested by Meridian Energy in a 2005 report 9 . The existing HVDC controller cannot be modified due to its age. Sharing FK would require enhancement to the HVDC energy dispatch to provide FK sharing between the islands. This enhancement requires a FK control signal that is calculated as the integral of the frequency difference of the North and South Islands and added to the current HVDC energy dispatch. In effect, this would add to the HVDC controller proportional control, resulting in a proportional + integral (PI) type control. Figure 5-1, Enhancement with HVDC FK Sharing, illustrates the proposed design of this HVDC enhancement. Table 5-1, Transpower Implementation Requirements, presents the implementation steps. This enhancement alone does not guarantee that the two frequency keepers will always share their responsibilities in proportion to their assigned FK MW bands under all conditions. The frequency keepers can, of course, limit their FK output to their assigned FK MW bands. The HVDC control enhancement must include a clamp on the output of the HVDC integrator, to limit the maximum amount of FK sharing between the Islands. After-the-fact FK settlement would be required to equitably distribute FK service payments. As an example, consider the case where FK is less expensive in the South Island than in the North Island. A 40 MW band for FK can be allocated to the North Island; a 60 MW band for FK to the South Island; and a 10 MW band for the HVDC integral control component. The South Island frequency keeper can then support the North Island frequency keeper by up to 10 MW and thus lower the overall FK costs. The design of the new HVDC controls to support these new projects should incorporate the capability for frequency control sharing between islands to support a national FK market.

Frequency Keeping-National Market Trial, a Meridian Energy report by Chris Ewers, Guy Waipara, and Ray Brown, November 2005.

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Figure 5-1, Enhancement with HVDC FK sharing, shows the basic elements of the design concept, described as follows: 1) The upper part of the diagram represents the North Island frequency keeper with a typical integral control mechanism acting on the North Island frequency error. a) The middle part of the diagram represents the enhancement required for HVDC FK sharing. An integral control is added to the existing proportional control. The implementation can be accomplished at the NCC. This implementation approach requires the integral FK signal to be calculated at the NCC and the combined SPD and FK MW setpoint is transmitted to the HVDC control system. 2) The lower part of the diagram represents the South Island frequency keeper with a typical integral control mechanism acting on the South Island frequency error.

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Figure 5-1: Enhancement with HVDC FK Sharing


Actual Frequency Bias PN Power Imbalance
1 BN

NORTH ISLAND FREQUENCY KEEPER

Frequency Deviation FN

DN
Demand

GN

Estimated Frequency Bias


KN

+
Generation

NI

EN

RN
Set Point 50 Hz

Frequency Reference
B

I SPD SPD Schedule

+ +

KI

EI

*Integrator inserted for Option #1 to enhance FK sharing between Islands

Existing
B
S

DS
Demand

+ +

GS
KS ES B

RS

+
S

Set Point

50 HZ

SI

Integrator

FS

PS

1 B

SOUTH ISLAND FREQUENCY KEEPER

5.1.1

Technical Requirements

The technical requirements for Option 1 are described in this section. 5.1.1.1 Transpower

Changes by Transpower involve the following modifications to the Scheduling, Pricing, and Dispatch (SPD) program: 1) Enhance SPD to optimise energy schedules taking offered ramp rates into account. This should result in 5-minute energy dispatch instructions that do not exceed the offered ramp rate for the 5-minute interval.

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2) Calculate the integral FK signal for the HVDC link and add to the SPD MW setpoint sent to the HVDC controller. 3) Provide a mechanism to clear half-hour frequency keeping providers to allow transfer of FK services up to an allowed maximum amount across the HVDC link 5.1.1.2 HVDC

Modifications to the HVDC controller settings will provide response to smaller frequency differences between islands. 1) Shrink the present frequency controller band to be less than the present 0.2 Hz. 5.1.1.3 Generating Companies

Generating companies either have the capability to accept and act on energy dispatch instructions without delay through their AGC control system or will need to install this capability. Refer to Table 5-2, Generating Company Implementation Requirements, for details. With automated systems in place, generating companies will be able to respond to energy dispatch instructions, limited to the offered ramp rates, without delay. The automated systems can also process block energy dispatch instructions and automatically allocate the block dispatch among generators in the block. 5.1.1.4 Market Rules

Some modification to market rules may be required to: 1) Close up the rule-based energy dispatch latency 2) Encourage compliance to offered energy ramp rates 3) Lower the HVDC frequency controller band to be less than the present 0.2 Hz 4) Shrink the present 50 MW FK band for each island and allow transfer of FK services up to an allowable maximum across the HVDC link

5.1.2

Implementation Requirements

The implementation requirements for Option 1 are described in this section.

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5.1.2.1

Transpower 1) Modify, test, and commission SPD to optimise energy schedules taking offered ramp rates into account 2) Develop the integral of island frequency differences.

5.1.2.2

HVDC 1) Test the HVDC controller with the added integral component to allow transfer of FK service between islands.

5.1.2.3

Generating Companies 1) Close-up the present rule-based dispatch latency by accepting the SPD dispatch instructions directly into the Generating Companys Control System (GCCS).

5.1.3

Telecommunication Requirements

The existing communications infrastructure would not require change, other than the planned upgrade of the Genco communication system, for the enhanced FK option implementation: 1) The Genco communication system would continue to be used for periodic energy dispatch instructions at a 5-minute or shorter periodicity. 2) The SCADA communication system would continue to be used to collect data for the NCC EMS. No additional communication requirements are needed for the enhanced FK option. 3) The existing communications system would be required to send the integral of island frequency differences, added to the energy dispatch, to the HVDC controller.

5.1.4

Operational Requirements

The operational requirements for Option 1 are described in this section. 5.1.4.1 Transpower 1) Clear the half-hour frequency keeping providers to allow transfer of FK services up to the maximum across the HVDC link.

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2) Adjust the maximum allowable FK sharing for calculating the integral of island frequency differences. 5.1.4.2 HVDC 1) No changes required. 5.1.4.3 Generating Companies 1) Change operating procedures from Operator acknowledgement to automated control system acknowledgement. 2) Change operating procedures for Operator monitoring of automatic dispatch instruction acknowledgement and implementation.

5.1.5

Conceptual Overview of FK via HVDC FK Transfer

The series of figures below illustrates a conceptual overview of transferring FK via the existing HVDC controller with the added integral of island frequency differences to maintain the transfer of FK services. The figures illustrate the control steps as a series of static steps where the actual control would be a more continuous process of the measurement, calculation,and control cycle. Figure 5-2: Load and Generation in Balance

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Figure 5-3: Load Added to North Island and Frequency Droops

+20 MW
Frequency

North Island
Generators G L HVDC Controller

49.98 Hz

HVDC Link

0 MW

Generators

50.00 Hz

South Island
Frequency G L

Figure 5-4: South Island Generation picks up Load and HVDC transfers FK

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5.2

Option 3: Apply Centralised AGC

This option continues from the enhancements provided in Option 1 and adds centralised Automatic Generation Control (AGC) to automatically allocate regulation service among multiple generating companies and between islands. An overview of the centralised AGC implementation is shown in Figure 5-2, Centralised AGC Overview, below. Figure 5-5: Centralised AGC Overview

Figure 5-5, Centralised AGC Overview, shows the basic elements of the design concept, described as follows: 1) The upper part of the diagram represents the national market for energy, reserves, and frequency regulation; SPD; and State Estimation of the North and South Islands. 2) The SPD function develops the HVDC base point for steady operation; frequency regulation parameters for frequency stabilisation between the islands; and base points and frequency regulation participation factors for the various generation resources.

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3) The lower-left part of the diagram illustrates how the MW control error is developed for each island (the North Island in this diagram). All of the calculations, except for those of the individual generating company control systems, are performed at the NCC. 4) The lower-right part of the diagram illustrates, in a simplified fashion, the control system of one of the generating companies. It is each generating companys responsibility to control its machines in accordance with the dispatch instructions and regulation signals received from the NCC. The generating companies are responsible for determining which of their units should be operating (unit commitment) and how to efficiently use their water and other fuel resources, while observing local operating restrictions and limitations. 5) The AGC function will have to develop the HVDC regulation signal coordinated with the island regulation control signals. The implementation can be accomplished at the NCC similar to the enhancement described for Option 1. (See Section 5.1 of this report): 6) The AGC function will have to develop frequency regulation signals that are compatible with the individual generating company control requirements: a) Individual generator via a single signal b) Generation block via a single signal that is processed and distributed by the generating company c) Generating company via a single ACE type signal that is processed and distributed by the generating company. 7) Although not shown on the diagram, the implementation of the centralised AGC approach will require provision for emergency FK back-up for each island. Each island would have a pre-assigned generating company to provide standby island FK capability. In the event of an emergency situation, the System Operator would send a request for island FK back-up that would remain enforced until called-off by the System Operator. Figure 5-6, HVDC Link Frequency Keeping Sharing, below illustrates the characteristics of FK sharing between the North and South Islands. The example is for 25 MW FK sharing with an arbitrary polarity assignment for the SPD Target MW flow between the islands.

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Figure 5-6: HVDC Link Frequency Keeping Sharing

5.2.1

Technical Requirements

The technical requirements for Option 3 are described in this section. 5.2.1.1 Transpower

Referring to Table 5-1, Transpower Implementation Requirements, Transpower will need to: 1) Modify and activate the standard RTGEN Automatic Generation Control (AGC) program provided with the NCC EMS in order to provide regulation control. 2) If co-optimisation of regulation service with the SPD energy and reserve market products is selected, modify the SPD program to include regulation service in the optimisation algorithm. 3) Modify the AGC program to calculate and add the regulation signal to the dispatch instruction sent to the HVDC controller . 5.2.1.2 Generating Companies

Referring to Table 5-2, Generating Company Implementation Requirements, the following are the implementation requirements for the generating companies: 1) Modify the generating company control system, plant control systems, and unit control systems to add the regulation signal to the energy dispatch instruction.

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2) Modify the company control system, plant control system, and unit control system to telemeter the required data to the NCC EMS for use by AGC. 5.2.1.3 Market Rules

The Market rules will need to be modified as described in Appendix E, Market Integration Work Stream.

5.2.2

Implementation Requirements

The implementation requirements for Option 3 are described in this section. 5.2.2.1 Transpower

Transpower will need to develop specifications for the modification of AREVAs baseline RTGEN (AGC) program and the SPD program to provide national regulation capability in the NZ power system: 1) Obtain price and implementation schedule from AREVA for RTGEN (AGC) modifications. 2) Obtain price and implementation schedule from AREVA for SPD modifications. 3) Obtain price and schedule from AREVA for RTGEN (AGC) and SPD modifications to calculate and send the regulation signal to the HVDC controller. 4) License the AREVA RTGEN (AGC) program for use on the EMS. 5) Develop custom interfaces to other NCC programs and databases as needed. 6) Modify RTGEN (AGC) program design and build the RTGEN (AGC) database with the required data. 7) Develop custom interfaces to other programs and databases as needed. 8) Modify SPD program design and build the SPD database with the required data. 9) Modify the RTGEN (AGC) and SPD programs to develop and send the regulation signal. 10) Install, test, tune, and commission the modified RTGEN (AGC) and SPD programs. 5.2.2.2 HVDC 1) No change required

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5.2.2.3

Generating Companies 1) Install, test, and commission changes to the generating company control system, plant control systems, and unit control systems to add the regulation signal to the energy dispatch instruction. 2) Install, test, and commission changes to the generating company control system, plant control system, and unit control system to telemeter the required data to the NCC EMS.

5.2.3

Telecommunication Requirements

The following communications infrastructure was suggested by the System Operator as being initially suitable for the centralised AGC option implementation: 1) The replacement Genco communication system would be used for periodic energy dispatch instructions at a 5-minute or shorter periodicity. The replacement Genco system would also be able to also handle the much higher periodicity (10 seconds or less) for regulation signals. 2) SCADA communications reliability for AGC purposes is deemed to be adequate, considering that the loss of an RTU would typically only impact one unit, station, or block of regulation which could be picked up by other generators in the affected island. Grid frequency from the generating companies needs to be sent at a 2-second or shorter periodicity. 3) The existing communications link connecting the NCC with the HVDC controller can be used to transmit the combined dispatch instruction and regulation signal.

5.2.4

Operational Requirements

The Operational requirements for Option 3 are described in this section. 5.2.4.1 Transpower 1) Transpower will replace System Operator selection of the frequency keeper in each island with regulation signals automatically issued by the centralised Automatic Generation Control (AGC) program.

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5.2.4.2

HVDC

Procedures will need to be implemented to assure the proper application of the regulation signal under the following conditionis: 1) Changing the SPD direction of the MW flow, i.e., the no-go-zone. 2) Loss of regulation signal. 5.2.4.3 Generating Companies

Procedures will need to be implemented to assure the proper application of regulation control under the following conditions: 1) Loss of SCADA communications with NCC 2) Backup take-over of FK service. 5.2.4.4 Market Issues

Market rules and after-the-fact settlement will need to address the national FK market as described in Appendix E, Market Integreation Workstream.

5.2.5

Conceptual Overview of Centralized AGC

The series of figures below illustrates a conceptual overview of centralized AGC cordination of regulation signals to generating companies and the HVDC link. The figures illustrate the control steps as a series of static steps where the actual control would be a more continuous process of the measurement, calculation,and control cycle.

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Figure 5-7: Load and Generation is Balanced


Bias = 100 MW / 0.1 Hz 50.00 Hz
Frequency

AGC ACE NI = 0 0 MW

North Island
Generators G L

SI = 0 Regulation NI = 0 0 MW

HVDC Link

0 MW

HVDC Controller

HVDC = 0 SI = 0 0 MW

Generators

South Island
Frequency G L

50.00 Hz Bias = 50 MW / 0.1 Hz

Figure 5-8: Load is Added, Frequency Droops,and AGC calculates an ACE

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Figure 5-9: AGC Issues Regulation Signals to South Island and HVDC

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Table 5-1: Transpower Implementation Requirements


Transpower Location National Coordination Centre Existing Control NCC sends SPD MW Set Point to HVDC Option #1 Shared FK NCC integrates the difference in island frequencies, converts to MW (observing FK limit), and adds to SPD MW Set Point Option #3 National AGC NCC calculates the regulation requirement for NI, SI, and HVDC. NCC the HVDC adds regulation requirement to the SPD MW Set Point NCC sends combined SPD MW Set Point to HVDC HVDC sends flow to NCC MW

Note 1 NCC sends combined SPD MW Set Point to HVDC HVDC @ Haywards Note 2 HVDC sends MW flow to NCC HVDC sends flow to NCC MW

Note 1:This comparison is based on the assumption that the NCC receives North and South Island frequencies, from multiple locations, at least every 2 seconds or shorter. Note 2: The existing proportional control acting on the difference in island frequencies is retained and operates in conjunction with any of the Options.

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Table 5-2: Generating Company Implementation Requirements


Generating Company Generating Station Frequency Keeper Note 1 Existing SPD Dispatch Instruction Via Genco Note 2 Existing SCADA Data to NCC MW Hz Option #1 SPD Dispatch Instruction Automatically Transferred from Genco Option #3 Automatic Control System is Reqd Option #3 SPD Dispatch Instruction and Regulation Signal Automatically Transferred from Genco

Contact Energy Hydro (4U) Hydro (8U) CCGT (1U) CCGT (1U) Thermal (3U) Genesis Energy Thermal (5U) Hydro (7U) Hydro (4U) Hydro (2U) Wind Meridian Energy Hydro (8S) Hydro (7U) Wind Wind Mighty River Power Hydro (10U) Hydro (8U) Hydro (4U) Hydro (4U)

South Island Clyde (SI) Roxburgh (SI) Otahuhu B (NI) Taranaki (NI) New Plymouth (NI) FK FK Station Station Unit Unit Unit (Manual) (Manual) (Manual) (Manual) (Manual) Net Net Net Gross & Net Gross

? Reqd Reqd Reqd Reqd Reqd ? Unit Block Block Block Station (Auto) (Auto) (Auto) (Auto) (???) Gross Gross Gross Gross Net ? Block (Manual) Station (Manual) Station (???) Station (???) Gross & Net Gross & Net Net Net ? Block Block Block Block (Auto) (Auto) (Auto) (Auto) Net Net Net Net Available Available Available Available Reqd Reqd Reqd Reqd Available Available Available Available Reqd

Modification of FK Control Reqd Reqd Reqd Reqd Reqd Reqd Modification of FK Control Reqd Reqd Reqd Reqd Reqd Not Reqd Ready for AGC Option #3 with 8-second control periodicity Reqd Reqd Not Reqd Not Reqd Ready for AGC Option #3 Reqd Reqd Reqd Reqd

North Island Huntly Waikaremoana Tokaanu Rangipo Hau Nui (NI) (NI) (NI) (NI) (NI) FK FK FK FK South Island Waitaki Manapouri Te Apiti White Hill (SI) (SI) (NI) (SI) FK FK

North Island Maraetai Arapuni Ohakuri Whakamaru (NI) (NI) (NI) (NI) FK FK FK FK

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Generating Company

Generating Station

Frequency Keeper Note 1

Existing SPD Dispatch Instruction Via Genco Note 2

Existing SCADA Data to NCC MW Hz

Option #1 SPD Dispatch Instruction Automatically Transferred from Genco

Option #3 Automatic Control System is Reqd

OCGT (1U)

Southdown

(NI)

FK

Station

(Auto)

Net

Available

Option #3 SPD Dispatch Instruction and Regulation Signal Automatically Transferred from Genco Reqd

TrustPower

New Reqd Option #3

for

(7S) Bay of Plenty (NI) ??? ??? ??? ??? (4S) Taranaki (NI) ??? ??? ??? ??? (11S) Westcoast (SI) ??? ??? ??? ??? Hydro (3S) Canterbury (SI) ??? ??? ??? ??? Hydro (2S) Otago (SI) ??? ??? ??? ??? Note 1: Frequency Keeping (FK) power stations are identified. Note 2: Manual means the Operator transfers Genco data to the company control system; Auto means data is transferred automatically.

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6.

Cost Estimates for Recommended Approaches

The implementation costs presented in this report are in New Zealand dollars and represent our best estimates based on the survey information that has been provided and our experience with similar projects. Cost estimates are given in Table 6-1, Transpower Cost Estimates, for Transpower. Cost estimating classifications are given in Table 6-2, Generating Company Cost Estimates for generating companies. Further cost analyses can be conducted as required, supporting specific implementation decisions, following the review of this report. Option 1: Enhance Existing Frequency Keeping (FK) The costs associated with Option #1 have been classified as follows: 1) Market Changes: a) Close-up the present rule-based dispatch latency. b) Encourage compliance to dispatch ramp rates. 2) Transpower National Coordination Centre (NCC) - Table 6-1, Transpower Cost Estimates (Preliminary): a) Specification and Procurement of changes to SPD and EMS. b) Scheduling, Pricing, and Dispatch (SPD) Include generator ramp rates in generation scheduling. c) Energy Management System (EMS) FK sharing limit for HVDC; North and South Island frequency bias factors. d) Communication to HVDC Combined SPD set point and FK MW. e) Implementation, Testing, Commissioning. 3) Existing FK generating companies (as may be required) Table 6-2, Generating Company Cost Estimates:

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a) Generating company automatic control system Respond automatically, without latency, to energy dispatch instructions and automatically calculate and send control requirements to generators. b) Testing. Option 3: Apply Centralised Automatic Generation Control (AGC) The costs associated with Option #3 have been classified as follows: 1) Market Changes: a) Continue with Option #1 market changes or adopt the changes given in Option #1. b) Apply AGC market rules. 2) Transpower National Coordination Centre (NCC) Table 6-1, Transpower Cost Estimates: a) Specification and Procurement of changes to SPD, EMS, and RTGEN (AGC). b) Scheduling, Pricing, and Dispatch (SPD) Modifications include generator ramp rates and co-optimisation of regulation product with energy and reserve products (if this alternative is selected).

c) Replacement Genco communications Modifications to send AGC regulation control signals to the generating companies, by: company, block, station, or unit. d) Energy Management System (EMS) Program interfaces and database for RTGEN (AGC). e) RTGEN Automatic Generation Control (AGC): i) License RTGEN (AGC).

ii) Modifications for HVDC regulation signal. f) Replacement Genco communications No changes required at NCC. g) Communication to HVDC Combined SPD set point and regulation signal. h) Implementation, Testing, and Commissioning.

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i)

Annual Support.

3) Generating Company Table 6-2, Generating Company Cost Estimates: a) Specification and Procurement of changes to Generating Companys automatic control system and station/unit control systems, as may be required. b) Replacement Genco - Respond automatically, without latency, to energy dispatch instructions, as required in the event that these companies did not adopt Option #1 above. c) Replacement Genco - Modifications to receive regulation control signals from the NCC. d) Generating Company Automatic Control System - Modifications to distribute AGC regulation control signals to individual stations and generating units. e) Implementation, Testing, and Commissioning. f) Annual Support. NOTE: The costs associated with any required market rule changes, market bidding changes, and market settlement changes are not included in this report.

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Table 6-1: Transpower Cost Estimates


Transpower Location National Coordinating Centre Existing Control NCC sends SPD MW Set Point to HVDC Option #1 Shared FK NCC integrates the difference in island frequencies, converts to MW (observing FK limit), and adds to SPD MW Set Point ($aaa) NCC sends combined SPD MW Set Point to HVDC ($aaa) HVDC @ Haywards Note 2 HVDC sends MW flow to NCC HVDC sends MW flow to NCC Option #3 National AGC NCC calculates the regulation requirement for NI, SI, and HVDC. NCC adds the HVDC regulation requirement to the SPD MW Set Point ($bbb) NCC sends combined SPD MW Set Point to HVDC ($bbb) HVDC sends MW flow to NCC

Note 1

Note 1: This comparison is based on the assumption that the NCC receives North and South Island frequencies, from multiple locations, at least every 2 seconds or shorter. Note 2: The existing proportional control acting on the difference in island frequencies is retained and operates in conjunction with any of the Options.
($aaa): Cost to include FK in the SPD MW setpoint sent to the HVDC. ($bbb): Cost to activate AGC, allocate regulation requirements to both islands, and calculate HVDC regulation component.

Comment: Transpower is not able to provide cost estimates until the scope of work is identified in a detailed investigation.

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Table 6-2: Generating Company Cost Estimates


Existing SPD Dispatch Instruction Via Genco Note 2 Option #1 SPD Dispatch Instruction Automatically Transferred from Genco Option #3 SPD Dispatch Instruction and Regulation Signal Automatically Transferred from Genco

Generating Company

Generating Station

Frequency Keeper Note 1

Existing SCADA Data to NCC MW Hz ?

Option #3 Automatic Control System is Reqd

Contact Energy Hydro (4U) Hydro (8U) CCGT (1U) CCGT (1U) Thermal (3U) Genesis Energy Thermal (5U) Hydro (7U) Hydro (4U) Hydro (2U) Wind Meridian Energy Hydro (8S) Waitaki (SI) Huntly (NI) Clyde Roxburgh Otahuhu B Taranaki New Plymouth (SI) (SI) (NI) (NI) (NI)

South Island

Modification of FK Control Reqd ($yyy) Reqd for #1 ($xxx) Reqd for #1 ($xxx) Reqd for #1 ($xxx) Reqd for #1 ($xxx) Reqd for #1 ($xxx) Reqd for #3 ($uuu) Reqd for #3 ($uuu) Reqd for #3 ($uuu) Reqd for #3 ($uuu) Reqd for #3 ($uuu) Modification of FK Control Reqd ($yyy) Available Available Available Available ? Reqd for #3 ($uuu) Reqd for #3 ($uuu) Reqd for #3 ($uuu) Reqd for #3 ($uuu) Not Reqd Ready for AGC Option #3 with 8-second control periodicity ($zzz) Reqd for #3 ($uuu) Proprietary March 14, 2008

FK FK

Station (Auto) Station (Auto) Unit Unit Unit (Auto) (Manual) (Manual)

Net Net Net Gross & Net Gross ?

North Island

FK FK FK FK

Unit Block Block Block Station

(Auto) (Auto) (Auto) (Auto) (???)

Gross Gross Gross Gross Net ?

Waikaremoana (NI) Tokaanu Rangipo Hau Nui (NI) (NI) (NI)

South Island

FK

Block

(Manual)

Gross & Net

Available

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Generating Company

Generating Station

Frequency Keeper Note 1

Existing SPD Dispatch Instruction Via Genco Note 2


Station Station Station (Manual) (???) (???)

Existing SCADA Data to NCC MW Gross & Net Net Net ? Hz

Option #1 SPD Dispatch Instruction Automatically Transferred from Genco


Available ? ?

Option #3 Automatic Control System is Reqd

Option #3 SPD Dispatch Instruction and Regulation Signal Automatically Transferred from Genco
Reqd for #3 ($uuu) Not Reqd Not Reqd

Hydro (7U) Wind Wind Mighty Power River

Manapouri Te Apiti White Hill

(SI) (NI) (SI)

FK

North Island

Ready for AGC Option #3 ($zzz) Available Available Available Available Available Reqd for #3 ($uuu) Reqd for #3 ($uuu) Reqd for #3 ($uuu) Reqd for #3 ($uuu) Reqd for #3 ($uuu) New Reqd Option #3 ($tptp) ??? ??? ??? ??? ??? for

Hydro (10U) Hydro (8U) Hydro (4U) Hydro (4U) OCGT (1U) TrustPower

Maraetai Arapuni Ohakuri Whakamaru Southdown

(NI) (NI) (NI) (NI) (NI)

FK FK FK FK FK

Block Block Block Block Station

(Auto) (Auto) (Auto) (Auto) (Auto)

Net Net Net Net Net ?

(7S) (4S) (11S) Hydro (3S) Hydro (2S)

Bay of Plenty Taranaki Westcoast Canterbury Otago

(NI) (NI) (SI) (SI) (SI)

??? ??? ??? ??? ???

??? ??? ??? ??? ???

??? ??? ??? ??? ???

Note 1: Frequency Keeping (FK) power stations are identified. Note 2: Manual means the Operator transfers Genco data to the company control system; Auto means data is transferred automatically. ($xxx): Cost to automatically transfer SPD Dispatch Instruction from NCC to the generating company automatic control system averaged on a per unit or station basis. ($uuu): Cost to automatically transfer SPD Dispatch Instruction and Regulation signal from the NCC to the generating company automatic control system averaged on a unit basis.

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Generating Company

Generating Station

Frequency Keeper Note 1

Existing SPD Dispatch Instruction Via Genco Note 2

Existing SCADA Data to NCC MW Hz

Option #1 SPD Dispatch Instruction Automatically Transferred from Genco

Option #3 Automatic Control System is Reqd

Option #3 SPD Dispatch Instruction and Regulation Signal Automatically Transferred from Genco

($yyy): Cost to modify the company FK control system to be compatible with the new AGC. This should include the total ($uuu) cost and total ($xxx) cost. ($zzz): Cost to modify the companys new control system to be compatible with the new AGC. This should include the total ($uuu) cost and total ($xxx) cost. ($tptp): Cost to modify the companys existing control system to be compatible with the new AGC. This should include the total ($uuu) cost and total ($xxx) cost. Comment 1: We anticipate that ($zzz) < ($yyy) < ($tptp) Comment 2: We estimate the need for the equivalent of one additional full-time staff person to support all of the new AGC related activities: one person for Transpower and one person for each of the five Generating Companies for a total of six persons.

Note: The Generating Companies are not able to provide cost esimates until the scope of work is defined in a detailed investigation.

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7.

Recommendations for Moving Forward

This report recommends a two phase implementation to achieve the stated goal of multiple frequency keepers. The first phase is an interim implementation (Option 1 in this report) that requires the least effort to implement and has the potential to reduce frequency keeping (FK) costs. The second phase builds on the changes in Option 1 and implements centralised Automatic Generation Control (AGC) (Option 3 in this report), which will require market rule changes and take longer to implement. AGC is proven in the industry and is adaptable to a national electricity market that provides for FK offers from multiple frequency keepers. This recommendation provides for early relief of the cost of FK and finishes with a proven solution that integrates AGC into a national market for energy, reserves and regulation. The following is a high-level set of recommendations that will integrate FK into the national wholesale market: 1) The first step is ongoing in the Electricity Commission in parallel with this investigation. The EC Market Integration workstream is summarised in Attachment E in this report. This workstream explores the practical issues and design requirements for integrating an AGC-based regulation market into the energy and reserve markets. 2) Analyse and test the existing HVDC link and control system to determine its capability and limits to provide FK sharing between islands. This step is necessary to develop a national market for FK and allow frequency keepers in the lower cost island to transfer FK services through the HVDC link to the higher cost island. 3) Update market rules, SPD, and generating company control systems (as recommended in Option 1) to reduce the present rule-based dispatch latency and encourage compliance to dispatch ramp rates. 4) Add the integral component to the HVDC dispatch instruction to facilitate transfer of FK service between islands and shrink the present frequency controller deadband below the present 0.2 Hz. 5) Implement, test, and commission the above changes to SPD and the EMS to complete the first phase. 6) Study the modifications required to continue from Option 1 enhancements and add AGC to automatically allocate FK service among multiple generating companies and between islands.

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7) Develop specifications for the modification of SPD co-optimisation, RTGEN (AGC) customisation, and EMS database and interfaces to implement centralised AGC as recommended in Option 3. At the same time, generating companies develop specifications for the implementation or modification of generating company control systems and plant control systems to receive regulating signals and distribute control to the generators. 8) Select the contractor(s) for the above modifications based on compliance to the specifications, capability, and cost. 9) Implement, test, and commission the above changes to SPD, AGC, and the EMS. In parallel, generating companies will implement, test, and commission the above changes. Note that these recommendations for moving forward are based on the recommendations and alternatives in this report. These recommendations may need to be revised based on the Electricity Commission findings in the EC Market Workstream. When final recommendations are established a more detailed schedule should be created.

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References (Bibliography)
Automatic Frequency Control Meridian Energy Advanced Management Programme, August 2007 Conceptual frequency control arrangements for single national FK market, Draft August 22, 2002, Direct Current Consulting, Inc. Transpower Annual Planning Report 2007 (Incorporating the Grid Reliability Report) 30 March 2007. Transpowers May 2007 report, initiated by the Electricity Commissions Wind Generation Investigation Project(WGIP) Frequency Keeping-National Market Trial, a Meridian Energy report by Chris Ewers, Guy Waipara, and Ray Brown, November 2005. The 2006 Reliability Review Draft Report - Office of the Tasmanian Energy Regulator Basslink Pty LTd & NEMMCO Draft Test Program for Inter-network Tests associated with commissioning of the Basslink interconnector September 2005. S Bex, et al. Basslink HVDC Design Provisions Supporting AC System Performance CIGRE 2006 (B4-301). NEMMCO - Proposed Second Solve of NEMDE to Manage Basslink Operating Capability Version No: 1.0. Australian Energy Market Commission Draft Rule Determination - Dispatch of Scheduled Network Services 7 June 2007.

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Attachments

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Attachment A - Frequency Control and Reserves Market Comparison


Table A- 1: Frequency Control Ancillary Services and Reserves Market Comparison New Zealand Australia Great Britain - Ireland
Markets & Products New Zealand System Operator Transpower Governors Response Characteristic Resources

Fast Instantaneous Reserve (FIR) ILRO, PLRO, TWRO Sustained Instantaneous Reserve (SIR) ILRO, PLRO, TWRO Normal (uneventful) FK Range, Each Island Single Company FK, Each Island Time Error correction via Frequency Keeper Standby Reserve Not a market product Over Frequency Reserve contractual purchase by Transpower (South Island only) Australia System Operator NEMMCO Governors Fast Raise/Lower (FCAS) Slow Raise/Lower (FCAS) Delayed Raise/Lower (FCAS) Regulation Raise/Lower (FCAS) Frequency Control Range via Centralised Automatic Generation Control (AGC) Time Error correction via Centralised Automatic Generation Control (AGC) Non-scheduled Reserve Service Great Britain System Operator - National Grid (NG) Governors Mandatory Frequency Response Balancing Market Unit (BMU) only

4 % droop mandatory or negotiated 1 % droop on some FKs 6 sec response sustained for 60 sec 60 sec response - sustained for 15 min 49.8 50.2 Hz 50 MW @ >=10 MW/minute 5 seconds with Zero once per day Transpower instruction to start up a unit Transpower instruction (or LF relaying) to shut down a unit

Generators

Generators, Loads Generators, Loads Generators Generators Generators Generators Generators

Did not find governor droop requirement 6 sec response 60 sec response 5 min response 5 min response (AGC 4 sec periodicity) 49.85 50.15 Hz uneventful & stabilised 5 seconds, mainland 15 seconds, Tasmania

Generators, Loads Generators, Loads Generators, Loads Generators, Loads

Generators, Loads

3 5 % droop 3 5 % droop - mandatory

Generators, DC Converters

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Markets & Products Firm Frequency Response (FFR) BMU and Non BMU Frequency Control Demand Management (FCDM) Non BMU only Low Frequency Response High Frequency Response Decentralised Frequency Control Range Time Error correction via Target Frequency change notification by System Operator Fast Reserve BMU and Non BMU Fast Start from off-line condition

Response Characteristic Deliver >= 10 MW Start within 2 seconds of NG instruction Sustainable for >= 30 minutes Low frequency relaying 10 sec indefinitely > 50 Hz 49.5 - 50.5 Hz Nominal 1 % of Target Frequency 10 seconds

Resources Generators, DC Converters Loads

Generators, DC Converters Generators, DC Converters

BMU only Short Term Operating Reserve (STOR) BMU and Non BMU Demand Management Non BMU only BM Start-Up BMU only Ireland System Operator EirGrid Governors

Start within 2 minutes of NG instruction @ >= 25 MW/min Sustainable for >= 15 minutes Rated output within: * 5 minutes for LF relaying * 7 minutes for manual NG instruction Start within 240 minutes of NG instruction Sustainable for >= 2 hours Across a minimum of 2 consecutive Settlement Periods Hot standby - ready to synchronise

Generators, Loads

CCGT Plant

Generators, Loads

Loads

Thermal Generators

Primary Operating Reserve (POR) Registered Secondary Operating Reserve (SOR) Registered Short Term Active Response (STAR) Normal Frequency Range

Registered Droop (3-5%) Allowed Dead Baud (15 mHz) 5-15 seconds Interval 15-90 seconds Interval Under Frequency Relay 5 minute interruption 49.8-50.2 Hz Frequency Event below 49.5 Hz Exceptional 47.0-52.0 Hz 49.95-50.00-50.05

Generator

Generator Generators Loads

Target Frequency corrections by System Operator

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Markets & Products Secondary Frequency Regulation System (SFRS) (Note 1) Time Error Correction Automatic Generation Control Trading Period Dispatch Instructions

Response Characteristic Automatic control to power stations from System Operator Not Specified Future 30 minutes As required (not periodic)

Resources Generators

Generators

Note 1: The SFRS for Ireland is a form of centralized frequency keeping. This approach is a step towards AGC and is not expected to cost less to implement than Option 3,Centralized AGC, of this report.

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Attachment B - Basslink Interconnector Tasmanian Frequency Control


The Australian Basslink Interconnector is a submarine 400 kV DC monopolar (with metallic return) cable for the exchange of electric power between Tasmania and Victoria on either side of the Bass Strait. Basslink is rated to transmit 500 MW continuously in either direction and up to 630 MW on a limited basis (up to 6 hours) between Tasmania and Victoria. Basslink began operation on 29 April 2006 and is a wholly owned subsidiary of City Spring Infrastructure Management PTe Ltd. Tasmanian Power System 10 The Tasmanian Electricity Supply Industry (ESI) can be depicted as in Figure B-1, The Supply System: Figure B- 1: The supply system

10

The 2006 Reliability Review Draft Report - Office of the Tasmanian Energy Regulator

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The three major organisations that make up Tasmanias Electricity Supply Industry are: Hydro Tasmania the principal generator; Transend Networks the monopoly transmission network services provider; and Aurora Energy retailer and monopoly distribution network service provider. All three entities are owned by the State. Tasmanian System Protection Scheme (SPS) The purpose of SPS is to: Maintain power system frequency within standards called Frequency Control SPS (FCSPS) Maintain assets within operational ratings called Network Control SPS (NCSPS) The Basslink is designed to modulate power transfers depending on the differences between the frequencies of the interconnected power systems. The idea is to make the Basslink emulate a synchronous link in order to facilitate a single national market in frequency control services and to enhance Tasmanian power system security upon the occurrence of unexpected events. Basslink Frequency Control The following information was obtained from NEMMCO 11 reference material: Basslink is fitted with a supplementary Frequency Control scheme that varies power transfer in response to differences in frequency between the mainland and Tasmanian networks, so providing a means of transferring Frequency Control Ancillary Service (FCAS) between these networks. Basslink operates as a market network service provider (MNSP) as defined by the Rules.

11

Basslink Pty LTd & NEMMCO Draft Test Program for Inter-network Tests associated with commissioning of the Basslink interconnector September 2005.

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Power Target Control 12 To facilitate market operation a Power Target Control (PTC) has been implemented. This control allows NEMMCO to remotely control the magnitude of power flow through the Basslink, including power direction change and blocking/de-blocking (start/stop power transmission) of the converter valves. This function allows integration of Basslink into NEMMCOs Automatic Generation Control (AGC) system that implements market outcomes as determined by the National Electricity Market Dispatch Engine (NEMDE). The power target value applies at the end of each 5-minute dispatch interval. To coordinate PTC with the operation of the Basslink frequency controller the frequency controller integrator output is reset at the end of each dispatch interval and the frequency controller output value at the end of each dispatch interval is added to the power target value prevailing at the end of the previous dispatch interval to be used as a starting point of the new dispatch interval. Frequency Controller The Basslink frequency controller calculates a change to the power target value received from the Power Target Control. Figure B-2, Basslink Frequency Controller Objective Function, shows the objective function of the frequency controller. Figure B- 2: Basslink Frequency Controller Objective Function

The output of the Basslink frequency controller is limited by only the DC current limitations, i.e., minimum and maximum current. The frequency controller is active on the rectifier side when the

12

S Bex, et al. Basslink HVDC Design Provisions Supporting AC System Performance CIGRE 2006 (B4-301).

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frequency difference exceeds a dead-band of 0.01 Hz. Once conditioned by the Basslink frequency controller objective function software the frequency error signal is fed to a non-wind-up proportional/integral (PI) controller before modulating the power target value. Frequency Control Ancillary Services Market Frequency Control Ancillary Services have been developed to alter the generation or demand to maintain the generation / demand balance. Frequency control can be divided into two reasonably distinct subsets of regulation and contingency: Regulation frequency control (see Normal range in Figure B-2, Basslink Frequency Controller Objective Function) can be described as the correction of the generation/demand balance in response to minor deviations in load or generation. Contingency frequency control refers to the correction of the generation/demand balance following a major contingent event such as the loss of a generating unit or a large transmission element. Basslink through the frequency controller is able to transfer both contingency and regulation services between Tasmania and the Australian mainland. The NEMDE 13 co-optimises the energy and ancillary services markets together with the transfer capabilities of the Basslink. Frequency Controller Benefits The Basslink frequency controller is an essential element in the design concept allowing implementation of the System Protection Scheme and enabling Tasmania to be part of a single Frequency Control Ancillary Service (FCAS) market. As expected the Basslink frequency controller has significantly improved control of the Tasmanian Power System frequency. Baselink FCAS Transfer Capability 14 The Basslink has a No-Go-Zone between approximately -50 MW and +50 MW that disallows FCAS transfer while the HVDC flow is within this range of operation. The overall FCAS transfer capability is

13 14

NEMMCO - Proposed Second Solve of NEMDE to Manage Basslink Operating Capability Version No: 1.0. Australian Energy Market Commission Draft Rule Determination - Dispatch of Scheduled Network Services 7 June 2007.

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shown on Figure B-3, Basslink FCAS Transfer Capability, where positive MW means power transfer from Tasmania to Victoria and negative MW means power transfer from Victoria to Tasmania. Figure B- 3: Basslink FCAS Transfer Capability

Figure B-3, Basslink FCAS Transfer Capability, illustrates a hypothetical range of HVDC operation with a 25 MW FCAS assignment as determined by the NEMDE. The FCAS amount that is illustrated could be comprised of more than one type of ancillary service product, and does not have to be symmetrical. The amount of FCAS that is applied (within 25 MW) will of course depend on actual power system conditions. Notice that FCAS capability is inhibited as the power target value approaches the No-GoZone or the maximum range of HVDC operation.

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Attachment C - Cost of Power Frequency Regulation


By cost of AGC regulation we mean the additional operating cost incurred as a result of adjusting generation up and down (regulation) versus holding generation at a steady output. In this discussion, operating cost refers to the cost of any additional fuel needed to drive the prime movers. Fuel can be any type, such as water, geothermal, or fossil. Cost is derived from the amount of fuel needed and the market value of the fuel. Generic Unit Characteristics For this analysis, we will assume that a generating units fuel input versus generation output can be expressed as a third order, or higher, polynomial function. Then in terms of cost, after multiplying by the appropriate fuel value, we obtain the following third order relationship for any type of unit: 1) F(P) = A + B P + C P2 + D P3 Where: F(P) = equivalent fuel cost in $/hr P = power output in MW A, B, C, D = characteristic coefficients that can change over time Regulation Characteristics For estimating purposes, we will define: P = the steady generator output +p = a raise regulation amount -p = an identical lower regulation amount T = time period for operating at (P + p) and at (P p) A regulation cycle consists of operating at (P + p) for a time period (T) followed by operating at (P p) for a time period (T). The average power output is unchanged.

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Regulation Fuel Cost For simplicity, assume that all the generators in the system are identical and that each is operating at the same steady output (P). To obtain the total cost of regulation (CR) of a cycle for a single generator, we apply Equation (1) as follows: 2) CR(raise) = [F(P + p) F(P)] T = excess cost 3) CR(lower) = [F(P p) F(P)] T = excess cost 4) CR = CR(raise) + CR(lower) Substituting Equation (1) into the above, we obtain: 5) CR = (2 C + 6 D P) p2 T Although D could be negative it is generally much smaller than C, therefore the cost of regulation for a single generator is usually a positive number, as expected. Also the cost increases as the square of the amount of regulation. FK versus AGC Regulation We wish to determine if there is any cost benefit to regulating with AGC instead of with the existing FK approach. The basic difference is that AGC regulation can be spread out over a greater number of generators than for the existing FK regulation. For example, lets assume that there are NFK FK generators and a total amount of required regulation equal to Rsys. Therefore the regulation requirement for a single FK generator would be: 6) pFK = Rsys / NFK Thus, the total cost for FK regulation is calculated, from (5) as follows: 7) CRFK = NFK (2 C + 6 D P) (pFK)2 T Similarly, we calculate the total cost for AGC regulation, for the same required amount of total system regulation, as follows: 8) CRAGC = NAGC (2 C + 6 D P) (pAGC)2 T

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We are interested in determining the relative cost of regulation, as follows: 9) Cost Ratio = CRAGC / CRFK = [NAGC (pAGC)2] / [NFK (pFK)2] = NFK / NAGC Conclusions The general conclusion is that spreading the FK burden over a greater number of generators (NAGC > NFK) will result in some overall reduction in system fuel cost. This is due to the non-linear characteristics of most generators. The specific amount of annual savings, however, is more difficult to quantify.

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Attachment D - Conceptual Frequency Control Arrangements for Single National Frequency Keeping Market (Draft)
John Gleadow - Direct Current Consulting Ltd. 20 August 2002 The following proposal is provided for discussion purposes and is based on a similar concept developed for Basslink. Objective The overall objective is to reduce the costs of procuring frequency keeping by enabling an integrated national market, instead of the separate North Island and South Island markets. For this a single AGC control area is required Multivariable AGC In order to implement a single AGC control area, with an HVDC link and without a parallel ac connection, a multivariable AGC controller is required. The standard AGC functionality is modified to become a multivariable controller (2 inputs, 2 outputs). It would accept two frequency error signals, one from the North Island, and one from the South Island, weighted according to each systems generating capacity. One control path would ensure the signaling of raise or lower commands to participating generation, irrespective of location within the North or South Island. A second AGC type control path would automatically adjust the HVDC transfer set point to ensure consistency with the changes in generation and load in each system if all the regulating generation was in the mainland then South Island would effectively control the North Island frequency or vice versa. This multivariable controller should be sufficiently responsive to allow seamless participation in both SIR and frequency regulating markets. Figure 2 attached shows a simplified representation of the existing HVDC frequency controls controller that would be consistent with this. This controller ensures correct response for FIR reserves locking the two systems together as required by emulating typical generating machine governor settings. When HVDC transfer limits apply then control and market requirements would need to be modified accordingly.

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Attachment E - EC Market Integration Workstream


Scope The EC market integration work-stream is intended to explore practical issues and investigate detailed design requirements for integrating an AGC based frequency market (described as Option 3 in this report) into the wider market arrangements. For the purpose of this exercise, this will involve developing the design details of an AGC straw-person (see below) in the context of a range of issues including: 1) Understanding the current and/or planned capabilities of the System Operators market systems, including EMS/SPD. In particular, whether the new version of SPD will have the capability to co-optimise (dispatch and pricing) of FK and energy/ reserves and what form of AGC capabilities exist within the EMS/ SCADA systems. The latter is a particular focus of KEMAs technical investigation. 2) Information required from participants in relation to FK capability (e.g. ramp rate capability/price/max range etc and requirements in relation to unit, station or blocks) and the relationships between this information and energy/reserve offers. The respective roles of the Rules and contracts in this regard will also need to be considered. 3) Defining the services/products (e.g. ramp rates/AGC instruction timeframes) including but not limited to: a) Whether free governor action should be a separate mandated service, as now, or treated as a specific FK product; b) The extent to which participation in an AGC market should be voluntary; c) Whether one regulation product (e.g., 5-minute raise and lower services) will be sufficient; and d) The possible role of demand-side participation. 4) Considering how FK services should be offered and how to set prices for, determine settlement quantities and pay for any normal frequency regulation services, and the respective roles of the Rules and ancillary service contracts in this regard. 5) Considering compliance issues, including the respective roles of Rules and ancillary service contracts.

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6) How market and technical arrangements should be integrated in relation to market systems and the Rules and who should pay for any system/infrastructure requirements. AGC Straw Person For the purpose of developing, assessing and refining a straw person design, it is envisaged that an AGC based FK market in NZ would include the following features: 1) Participation in the FK market would be subject to contracts with the system operator confirming technical capabilities and eligibility to offer into the market (along same lines as for instantaneous reserves) 2) Participation would be technology neutral (e.g. in principle, demand side resources could participate) 3) Participants would submit half hourly FK offers (by island) in the form of raise band, lower band, and ramp rate capability (as a starting point, assume MW and MW/ minute over any 1 minute timeframe) 4) FK offers would be made by participants, and interpreted by the market-clearing software, in a way that allows for any interdependencies with energy and/or instantaneous reserves 5) FK offers would be subject to the same provisions as other offers and bids, including 2 hour gate closure window, block and station dispatch, etc. 6) The System Operator would decide on the amount of FK required in each half hour (probably by island, depending on the role of the HVDC in managing frequency differences between islands) 7) In making its assessment of normal FK procurement requirements, the System Operator would take generator free governor action into account. 8) The System Operator would set in SPD the amount of FK capability required in each island (similar to the way instantaneous reserves requirements are presently set in SPD) 9) In producing market pre-dispatch and dispatch schedules, SPD would co-optimise energy and instantaneous reserves/frequency keeping requirements to maximise overall economic benefits each trading period

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10) For dispatch purposes, the System Operator would re-run SPD and re-dispatch the system every 5 minutes 11) An intelligent central frequency management engine would issue raise/lower signals, say every 4 to 6 seconds via SCADA (KEMA investigating), to cleared FK capability (to all cleared participants simultaneously rather than sequentially) 12) In relation to block or station dispatch, aggregate raise/lower signals would be issued to the block or station and local systems would redistribute to units (KEMA investigating) 13) The central engine would take into account (via SCADA) the actual performance of participating FK providers. 14) Indicative prices from each dispatch schedule (currently at 5-minute intervals) would reflect co-optimisation of energy, instantaneous reserves, and FK. 15) The clearing price for supply of FK would be set ex post in a similar manner as for instantaneous reserves in each region. 16) FK providers in each region would receive half hourly market (enablement) prices for any cleared FK capacity 17) As for instantaneous reserves, performance relative to offers would be monitored by the System Operator and nonperformance would be a contractual issue. Deliverables The output of the market integration work-stream will be a report covering, but not limited to, the issues covered under scope. The report will be in sufficient detail to enable likely costs of the preferred option(s) to be assessed, and along with technical information and costs established by KEMA, enable the overall costs and benefits of a preferred design to be assessed.

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