Karl StahlkopfVice President, Power

Delivery, EPRI

University of Wisconsin

October20, 2000

EPRI’s ISO Membership Package EPRI’s ISO Membership Package Power for a Digital Society Power for a Digital Society

KES 2

The Reliability ChallengeThe Reliability Challenge

• Process becoming more complex

• Increasing bulk power transactions strain grid capacity

• Grid expansion is not keeping up with growth

• Incentives for expansion are lacking

• Infrastructure needs to be upgraded

KES 3

0

50000

100000

150000

200000

250000

300000

1996 1997 1998 1999

TVA Interchange Transactions

Transactions Increasing ExponentiallyTransactions Increasing Exponentially

KES 4

Grid Expansion Not Keeping UpGrid Expansion Not Keeping Up

• Transmission expansion is less than half of demand growth and getting worse

• Distribution construction has fallen 10% in real terms over last decade

%

0

5

10

15

20

25

30

1988-98 1999-09

ElectricityDemand

TransmissionCapacityExpansion

KES 5

5,834 5,556

13,120

6,818

8,851

10,400

11,761

12,877

12,649

5,000

7,000

9,000

11,000

13,000

15,000

90 91 92 93 94 95 96 97 98

U.S. Transmission 10-Yr Plans* U.S. Transmission 10-Yr Plans*

Miles Added

Year

KES 6

Background: Problems Increasing

Background: Problems Increasing

1965 – November: Northeast blackout1977 – July: New York City blackout1994 – January: WSCC breakup (Northridge earthquake)

– December: WSCC breakup1996 – July 2: WSCC cascading outage

– August 10: WSCC cascading outage

1998 – June: MAPP breakup– July: Chicago (100,000 customers)

– July: Midwest price spikes to $10,000 MWh – December: San Francisco tripoff1999 – July: New York City (200,000 customers)

– July: Chicago (100,000 customers) – July: Midwest price spikes to $6,000 MWh

– August: Chicago (“Loop” business district) 2000 – May: PJM power voltage reductions and curtailments – May: New England price spikes to $6000 MWh

– June: California outages and price increases

KES 7

Rise of the Digital EconomyRise of the Digital Economy

• Phase 1 -- Computers

• Phase 2 -- Embedded processors– Now 30 times as many stand-alone chips as in computers

• Phase 3 -- Networks– One million Web sites– 200 million computers worldwide– E-commerce = 2% of American GDP

KES 8

Challenges for Electric PowerChallenges for Electric Power

• Quantity– IT alone accounts for 10-13% U.S. electricity consumption– 80% energy growth is being met by electricity

• Quality– Grid delivers 3-nines reliability (99.9% reliable)– Microprocessors require 9-nines reliability (99.9999999%)– Even brief outages can cost a company $ millions

KES 9

Rise of the Digital EconomyRise of the Digital Economy

13%50%

Digital Power

Analog Power

4

2

TkWh

1980 2000 2020

Demand for “digital quality” power is growing rapidly

KES 10

Two Reliability GoalsTwo Reliability Goals

• Increase transmission capacity and enhance reliability to support a stable wholesale power market

• Upgrade distribution infrastructure to support integration of low-cost power from transmission system with new DR options

Don’t try to Gold-Plate the Grid

KES 11

The Effect in Silicon ValleyThe Effect in Silicon Valley

• “The impact of momentary interruptions of power is extremely costly in terms of lost productivity and potentially damaged equipment at Oracle….Whether the electricity was free or cost three times as much would have absolutely no effect on the cost of our product.”

– Mike Wallach• “What is self-sufficiency worth to us [Oracle]? Millions of

dollars per hour.”– Jeff Byron

• “Sun Microsystems has estimated that a blackout costs up to $1 million per minute”

– Larry Owens, Silicon Valley Power

KES 12

Consumer Response: Market for Backup Power Takes Off

Consumer Response: Market for Backup Power Takes Off

0

500

1000

1500

2000

2500

3000

3500

4000

4500

1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995

Source: Bechtel

Units Ordered Output GW9

8

7

6

5

4

3

2

1

0

32%

Gro

wth R

ate

Annua

lly

Units Ordered

Total Output

1 MW Gen-Sets

KES 13

EPRI’s ResponseEPRI’s Response

• Short Term: Form the “Reliability Initiative”

• Long Term: Form the “Consortium for Electrical Infrastructure to Support a Digital Society” (CEIDS)

KES 14

Reliability InitiativeReliability Initiative

• Approximately $5.7 million raised so far

• 40 utilities have signed agreements

• 4 more are pending

• Further interest expected as word gets out

KES 15

Transmission System AssessmentsTransmission System Assessments

• Grid complexity requires new analytical approach

• Probability Risk Assessment (PRA) effective for analyzing multiple factors in complex systems

• PRA beta-test led to modifications

• Grid reliability study of two of three Interconnections– In close cooperation with NERC-RAS

KES 16

Distribution System AssessmentsDistribution System Assessments

• Systems differ greatly in architecture, equipment, and operations; therefore representative systems will be analyzed using deterministic methods

– Urban radial, largely underground (ComEd)– Urban network, largely underground (ConEd)– Urban/suburban radial, largely overhead (DQE)– Suburban, combined overhead & underground (Duke)

KES 17

Digital Society InitiativeDigital Society Initiative

• Form a “Consortium for Electrical Infrastructure to Support a Digital Society” (CEIDS)

• Structure of Initiative based on broad industry participation– Users of “Digital Electricity”– Equipment Suppliers/Vendors– Electric Utilities

KES 18

CEIDS InitiativeCEIDS Initiative

• Form Consortium early in 2001

• Goals– Raise $20 Million from Private Sector– Seek matching Public Sector Funding– Initiate a research program to insure that

“digital quality” electricity can be made available at a reasonable cost

KES 19

Meeting the Reliability ChallengeMeeting the Reliability Challenge

A combination of technologies will be required

9-nines

6-nines

3-nines

Po

wer

rel

iab

ilit

y

(Log

arith

mic

Sca

le)

To the Chip

To the Plug

To Customer Premises

UPS under desk

Capacitor on circuit board

UPS Substation

PQ Park

On-Site DR

Grid Technologies

KES 20

ConclusionConclusion

• Grid reliability is being challenged by the needs of a digital society

• Industry is responding aggressively

• EPRI’s Reliability and CEIDS initiatives focus developing a national response