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What is NGR-REM?

July 8th, 2012 by Robert W. Anderson

This is an excerpt from a coming report by Olivine on NGR-REM at the CAISO.  Follow this link to view all posts on NGR, including to access the report once it is published.

The CAISO renewable integration initiative focuses on the challenges of operating the California grid under the 33% Renewables Portfolio Standard (RPS). A major concern of grid operators with such a penetration of renewables is increased short-term uncertainty created by the intermittency of solar and wind generation. The forecasted imbalances created by such intermittency will require the availability of additional ancillary services to maintain system reliability. While one solution to maintaining reliability is to procure additional dispatchable thermal resources, other organized markets have successfully demonstrated small-scale storage and demand-side resources as a viable and “green” alternative.

Such non-generation resources may in fact be more effective than conventional generation by providing faster-responding regulation or load following with fast ramping capability; however, a major issue with such resources is the relatively smaller amount of service available based on limited storage capacity or demand response capability. Whether this limitation comes from the capacity of a physical battery or the demand response opportunities in a commercial building, wholesale market models must be updated to consider such limitations.

The CAISO has responded to this challenge by defining a new class of resource, the Non-Generator Resource (NGR), with two resource models designed to respect the unique operational characteristics of fast-acting storage and demand response. The new models are the Limited Energy Storage Resource (LESR) and the Dispatchable Demand Response (DDR) resource. A LESR can provide both generation and load continuously from negative to positive output and allows for injection onto the grid. A DDR provides services only by varying demand and therefore can never inject onto the grid. Both of these new models include the Regulation Energy Management (REM) option. This option resolves two major issues for NGR resources in today’s CAISO market: resources providing regulation service must be able to provide 60-minutes of continuous delivery; and the timing of Real-Time bidding makes it infeasible to use the Real-Time market to recharge regulation resources. These issues together suggest that only the largest of storage resources with significant capacity could certify in today’s market, and even then, that the capacity of such resources would be depleted very quickly.

The REM option addresses these issues by giving the CAISO control over the state of charge while respecting the energy limits for NGR resources using a combination of Automatic Generation Control (AGC) and telemetry. In addition, the CAISO will manage REM resources in the Real-Time market with the goal of energy neutrality by offsetting current energy balanced against the previous dispatch interval. Under this option, the CAISO also makes an allowance for the certification of capacity, allowing it to be equal to four times the regulation energy certified over a 15-minute period.

Phase 1 of NGR specifically targets the REM option for the LESR model and therefore this was the focus of the NGR-REM market simulation in April and May of 2012. Phase 2 of NGR targets the non-REM option of LESR with a planned market simulation in September 2012.

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