Electricity 101

4 Key Sectors Physical Sectors:

generation, transmission, distribution, consumption

Value of FTR=

(Sink - Source)

Why do residential customers typically pay more for electricity than other consumer groups?

1) Distribution system required to serve residential customers is more expensive because services are delivered in small quantities and at lower voltages 2) Tend to have low load factors 3) Customer service costs are often much higher for residential customers

Current

=force(volts)/resistance

Reactive Power

A portion of the electric current that a generator and electrical system must provide does no work and is not recorded by a meter

Load factor

Actual annual usage (kWh)/peak demand(kW) x 8760

Load Curve

Aggregate demand of all customers in a specific region

Installed Capacity

Also called ICAP, the total wattage of all generators able to be scheduled to serve a given service or control area.

Unconstrained Capacity

Also called UCAP, the total wattage of all generators that actually deliver power to serve a given service or control area. UCAP may be determined through a derating process that corrects for loss of capacity due to high air temperatures (which may reduce capacity of combustion turbines), past failure probabilities for specific generators, or other means

Types of A/S

Automatic Generation Control (ACG), Spinning Reserves, Non-spinning reserves, supplemental reserves, voltage support, black start

Wholesale marketer

Buy power and resell it to utilities, other marketers and very large industrial customers.

Retail marketer

Buy power, but focus solely on resale to end use customers.

Intermediate Capacity

Capacity intended to operate fewer hours per year than baseload capacity but more than peaking capacity. Typically, such generating units have a capacity factor of 20% to 60%.

Firm Capacity

Capacity that is as firm as the seller's native load unless modified by contract. Associated energy may or may not be taken at option of purchaser. Supporting reserve is carried by the seller.

Baseload Capacity

Capacity used to serve an essentially constant level of customer demand. Generating units typically operate whenever they are available, and they generally have a capacity factor that is above 60%.

Peaking Capacity

Capacity used to serve peak demand. Generating units operate a limited number of hours per year, and their capacity factor is normally less than 20%.

Various Generation Sources

Coal, nuclear, natural gas, fuel oil, hydro, and various forms of renewable energy

bus

Common term used for a point in the system where electricity is delivered off of the transmission system onto the distribution system, or delivered onto the transmission system from generation.

Generation

Creation of flowing electrons

Voluntary Load Response

Customers are offered a payment for curtailing blocks of load, usually in the day ahead.

Curtailable capacity call

Customers are paid a capacity payment to give the utility or marketer the right to curtail blocks of load under certain conditions.

Automatic load response

Customers are paid a capacity payment to give the utility or marketer the right to remotely and automatically curtail blocks of load.

Real-time pricing

Customers pay hourly prices that reflect same day or day ahead market conditions

Mechanisms for end-use demand reduction during peak times.

Demand Response

EDR

Economic Demand Response

Automatic generation control

Equipment that allows the system operator to increase or decrease generation output automatically from a power plant in response to changing system conditions.

Electricity

Flow of electrons through a conductor

Baseload

Generation run all 24 hours of the day

Peak Load

Generation run during the peak hours (6:00 am- 10:00 PM)

Intermediate Load

Generation run from mid-morning until the evening

Distributed generation

Generation that is located at an end-use consumer's site.

Operating reserves

Generation that is not running, but which can be brought on line within a specified timeframe, such as within 10 minutes or 30 minutes of being called on.

Spinning reserves

Generation that is not supplying power, but can be brought "on-line" instantly if needed.

Low load factors results in:

Greater per kWh cost because customers are generally spread over fewer kilowatt- hours.

Peak demand

Greatest amount of energy required at a given moment

Circuit

Includes a source of electrons (battery or generator), an energy consuming device (light bulb), and conductors (wire) that transmit electrons to and from the bulb

Generation

Is the sector in which power is created, usually by large centralized power plants but also by smaller decentralized plants located at or near customer facilities. Can be owned by vertically integrated utilities, power authorities, independent power producers (also called merchant generators or gencos) or by end users. And, in some limited cases, aggregated economic demand response can also participate in markets as a source of "generation."

System operations

Is the sector in which supply and demand are balanced and system reliability is maintained. This occurs through provision of ancillary services such as regulation, reserves, voltage support, and black start as well as real-time balancing of supply and demand. May be provided by a vertically integrated utility, a power authority, a transmission owner (TO), or an ISO.

Economic Dispatch

Low-cost "baseload" plants are dispatched first, followed by higher-cost resources, according to need, and independent of whether the resources are used to serve local or more distant needs.

Load factor

Measure of how average usage relates to peak usage

Power factor

Measures the relationship of real power to apparent power

Electric Distribution

Movement of electricity from the interconnection with the transmission system through the end-use consumer's meter

Electric Marketers

Purchase electricity from generators and then resell it to utilities, end users, or other marketers.

Capacity

Reflects the instantaneous ability to provide energy required to do work

Demand

Reflects the instantaneous amount of work required to perform the function desired.

3 Consumers of Power

Residential, Industrial, Commercial

Planning reserve

The difference between a utility's or region's peak generating capability and its expected annual peak demand

Net Capacity

The maximum capacity (or effective rating), modified for ambient limitations, that a generating unit, power plant, or electric system can sustain over a specified period, less the capacity used to supply the demand of station service or auxiliary needs.

Electric Transmission

The movement of large amounts of electricity over long distances

current

The rate at which electrons flow through a conductor (measured by amps)

Capacity

The rated continuous load-carrying ability, expressed in megawatts (MW) or megavolt-amperes (MVA) of generation, transmission, or other electrical equipment.

Capacity Factor

The ratio of the total energy actually generated by a generating unit for a specified period to the maximum possible energy it could have generated if operated at the maximum capacity rating for the same specified period, expressed as a percent.

Ancillary Services

The services (other than energy) required by system operators to ensure safe and secure operation of the electric grid

Aggregate demand curve

Total demand for customers at all moments during the day

Spinning Reserves

Units that are already synchronized to the frequency of the system, and this can begin providing energy to the grid upon receiving a dispatch call.

Supplemental Reserves

Units that are available with a longer lead time, often thirty minutes from notification

Non-spinning reserves

Units that are not synchronized to the frequency of the system, but can be available within 10 minute of notification

Black Start

Units that can start independently without electricity from the grid.

Automatic Generation Control

Used to manage the minute by minute fluctuations in system loads.

From a system operator's perspective, how is demand forecast?

Using models developed from historical demands given forecasted weather patterns and business activities.

4 Basic Market Structures

Vertically integrated monopoly utility, single buyer with competitive generation, wholesale/industrial competition, complete retail competition

Regulation

a service that corrects for short-term changes in electricity use that might affect the stability of the power system.

Wholesale Markets

are where power is bought and sold between generators and entities that resell power to end users. These markets can depend on bilateral contracts (private contracts between two parties) or can depend on organized markets, which are run by a central authority such as a Power Exchange (PX), an Independent System Operator (ISO), or a mix of both.

Black Start Services

designated generators that are able to restore electricity to the grid without using an outside electrical supply.

Capacity Market

ensures long-term grid reliability by securing the appropriate amount of power supply resources needed to meet predicted energy demand in the future.

Ancillary services

help balance the transmission system as it moves electricity from generating sources to ultimate consumers.

Transmission

is the high-voltage network that moves power long distances from generators to distribution systems. May be owned by vertically integrated utilities, power authorities or stand-alone transmission companies (transcos). May provide transmission services directly or services may be provided by the ISO with payment going back to the TO from the ISO.

Distribution

is the low-voltage network that moves power from the transmission system to the consumer. May be provided by a vertically integrated utility or by a stand-alone utility distribution company (UDC).

Retail Supply

is the provision of electricity supply to an end-use customer. Provided by the distribution company as a service bundled into distribution services. In other cases, end-use customers have the option of buying supply directly from a non-utility retail marketer.

Disturbances travel very quickly and are hard to contain

key property of electric delivery system

Electricity cannot be easily stored

key property of electric delivery system

Outages and significant voltage or frequency fluctuations are not acceptable

key property of electric delivery system

The path of electrical flow is difficult to control

key property of electric delivery system

DA Market

like a commodities futures market that allows buyers and sellers to hedge their transactions.

Power factor

real power/ (reactive power+real power)

Unforced capacity

represents the amount of installed capacity that is actually available at any given time after discounting for time that the facility is unavailable due to outages such as repairs.

Installed Capacity

represents the maximum generating capacity of a given facility.

Intermediate generation

tends to be gas- and oil-fired combustion turbines or combined cycle plants.

Baseload generating plants

tends to be nuclear and coal plants, have the lowest fuel cost and run virtually at all times.

Price Responsive Demand

the predictable change (a reduction when prices rise or an increase when prices fall) in electricity consumption (also known as demand) in response to changing wholesale electricity prices.

Peaking units

typically small combustion turbines, or even diesel engines.

Congestion

when the lowest-priced energy is prevented from flowing freely to a specific area on the grid because heavy electricity use is causing parts of the grid to operate near their limits.