LCG Publishes 2024 Annual Outlook for Texas Electricity Market (ERCOT)

LCG, October 10, 2023 – LCG Consulting (LCG) has released its annual outlook of the ERCOT wholesale electricity market for 2024, based on the most likely weather, market, transmission, and generator conditions.

Read more

LCG Publishes 2024 Annual Outlook for Texas Electricity Market (ERCOT)

LCG, October 10, 2023 – LCG Consulting (LCG) has released its annual outlook of the ERCOT wholesale electricity market for 2024, based on the most likely weather, market, transmission, and generator conditions.

Read more

Press Release

Electricity Blackouts: Fixable or Fixture? New Study Offers Solutions For Lowering Risk of Electricity Blackout

LCG Consulting, Los Altos, California, September 29, 2003 – Regional planning and coordination of synchronized operating reserves may be the most cost-effective and timely solution for avoiding electricity blackouts, and might even have prevented the blackout on August 14th. This is the conclusion of a study performed recently by LCG Consulting.

There has been much discussion concerning the causes of the August 14th blackout. The fingers have been pointed to weaknesses in the transmission system, lack of communication between control area operators and even the move towards FERC’s Standard Market Design (SMD). While attention to transmission expansion and capacity upgrades is important, it is not clear that improved transmission infrastructure is sufficient by itself to eliminate blackouts. New transmission will certainly improve the transfer of economic energy and possibly even lower overall prices. However, increased utilization of the transmission network could actually result in a decrease in security. As new lines are loaded more and more, they become more and more critical to the security of the system in case of an outage. If sufficient reserves are not available for backup of these outages, the reliability of the system will be further compromised.

Better communication can hardly be considered as an approach for avoiding cascading outages. Because of the nature of electricity flows and the monitoring of the transmission network, each control area center can basically tell when there is a disruption on the interconnected system. Most control areas plan for reserves to meet the needs of their own requirements. If the transmission operator has not already effectively planned for reserves to cover regional outages outside their area, there will be little time or resources available to do anything to save the local network, even if specifically notified in a short period of time.

The focus of the concern regarding SMD is the possible stress placed on the transmission network by increased reliance of serving load from distant generators whose costs are lower than the local units. What has not been recognized is that FERC’s design also calls for regional coordination of synchronized operating reserves using contingency based planning of resources. With this in mind, sufficient regional reserves will be available and properly distributed throughout the region to mitigate the impact of any outages and prevent a series of cascading effects leading to blackouts.

Synchronized operating reserves are extra electric generators available to the transmission operators to provide electricity at a moment’s notice should some unforeseen occurrence disrupt the normal grid operations. LCG’s study of developing and allocating operating reserves across various control areas within the grid shows how to enhance the reliability of the system and reduce the occurrence and extent of blackouts.

The amount and distribution of reserves should be based on contingency planning, which aims to limit the effects of unforeseen failures on the system. Operational adjustments for this purpose can be developed efficiently with the help of a computer simulation model, which will analyze a wide variety of possible system failures.

To illustrate the procedure, LCG has simulated the major elements of the Eastern Interconnect for August 14, 2003, the day of the worst outage in North American history. Given the extent of the system, great care was taken to incorporate details of the transmission lines, busses, load distribution, generators, and their abilities to provide operating reserve services. To perform the simulations, LCG used its proprietary model, UPLAN, which integrates a detailed representation of the generating resources, the electric demand, and the transmission network.

The results of the simulations indicate that strategic use of additional generators improves the capability of the system to continue to meet customer requirements when extensive transmission line and generator outages acquire momentum through the system. This is measured by comparing the impact of outages on the amount and cost of power provided to customers, with and without regional contingency planning and allocation of operating reserves. The study showed that the amount of unserved energy was significantly lessened with operating reserves in place. Furthermore, the added cost to the consumers for adding contingency planned reserves to normal operating costs is minimal compared to the expected average cost of energy.

This paper is published in the January 2004 Public Utility Fortnightly.
Copyright © 2023 LCG Consulting. All rights reserved. Terms and Copyright
The Locational Marginal Price Model (LMP) Network Power Model
Day Ahead and Real Time Market Simulation
The Gas Procurement and Competitive Analysis System
Database of Plants, Loads, Assets, Transmission...
CAISO CRR Auctions
Monthly Price and Congestion Forecasting Service