March 2023 Alberta Electricity Newsletter: Managing the Energy Transition: Reliability and Connection

March 31, 2023
Leonard Olien

The AESO has initiated two processes in response to the increasing penetration of renewable generation as part of the energy transition: the Reliability Requirements Roadmap and the Connection Process Streamlining.

Reliability Requirements Roadmap

An information session held on March 22 presented information on three reliability challenges:
1) Frequency Stability;
2) System Strength – the ability to respond to voltage disturbances; and
3) Flexibility Capability.

Critical actions on frequency stability are being undertaken in the next six months, including adjustments to Load Shed Service for imports (LSSi), exploring immediate procurement of Fast Frequency Response (FFR), and developing an ongoing FFR procurement process to be operational by 2025. The declining volume of system inertia was discussed at the session and was identified by the AESO as a secondary factor in the maintenance of system frequency. There has been a reduction in import capacity of between 150 MW and 300 MW, depending on Alberta Internal Load and LSSi procured volume.

Voltage maintenance under disturbances is more likely to occur in regions with a high concentration of wind and solar inverter-based resources (IBR) and relatively few synchronous generators. Medium-term solutions include a review of IBR performance requirements to identify gaps, while in the longer term, the AESO will look to market-based solutions that leverage newer technologies such as grid-forming inverters.

Flexibility Capability is the ability to respond to supply and demand changes and is going to be needed in greater quantities in parallel with renewable energy development. The AESO is looking to improve short-term forecasts, while longer-term solutions include potential increases to regulating reserve volume, rule changes to tighten dispatch tolerances, and potentially market changes to include products that contribute to grid flexibility.

What will remain challenging for the AESO is that these complex issues are being addressed within a deregulated market where market participants have a wide range of views. While there is consistent agreement on the challenges identified, there is very little stakeholder agreement on the appropriate solution and how that solution should be implemented. It is interesting to note that over the past decade, the tone of the conversation has changed from "low carbon resources are too expensive and unreliable to be a major concern" to "low carbon resources are coming, how do we maintain reliability at the lowest cost to consumers?"

Connection Process Streamlining

The Connection Process is being updated to reduce the volume of work for the AESO and to bring clarity to the transmission planning process. The key change is that detailed transmission assessment will be done on a cluster basis with penalties for changing In Service Date (ISD) or cancelling the project after the cluster study. This cluster study practice is common among other North American ISOs.

Current projects in Stage 4, 5 or 6 will not be affected by the change. Projects currently in stages 1, 2 or 3 can remain in the current process if they receive a Proposal to Proceed letter from the AESO and have provided GUOC evidence (or payment for distribution connected projects) by August 31, 2023. Otherwise, projects will need to complete a new System Access Service Requests (SASR) and enter cluster study 1. All new SASRs from April 3 onward will enter the new process.

Under the new process, the cluster assessment will apply to generation and storage projects that will inject 5 MW or more into the AIES at the facility’s connection to the AIES via the transmission or distribution system. The first Cluster Assessment will assess projects with energization dates up to Aug. 31, 2028. SASR submissions for Cluster 1 will be accepted from April 3, 2023, to Aug. 31, 2023. Applicants must submit a SASR, a Processing Fee payment and a Preliminary Assessment Fee payment. After reviewing the SASR, the AESO will issue a Processing Fee invoice, assign the project number, name and AESO Project Manager, and issue a Preliminary Assessment fee invoice. Once all Stage 0 deliverables are completed, the AESO issues a letter confirming that the project is included in the Stage 1 preliminary assessment.

Stage 1 is a preliminary assessment with each individual market participant, after which a cluster study occurs in Stage 2, where all market participants in the same regional planning area will be studied as one group. The preliminary assessment and cluster study together are anticipated to take nine months, at which time the second Stage 1 will commence for the next set of SASRs.

Projects will be included in the cluster study if the ISD is within 5 years of the beginning of the cluster study.

A majority of market participants have agreed that the proposed process will increase efficiency in processing connection requests and give greater certainty to the AESO in the transmission planning process. There are concerns that the processing of applications in clusters will result in significant competition for labour and constructions resources when cluster study results are released. There are also concerns that the transition to the new process is not completely fair for projects that are already in the queue but, ironically, have had difficulty progressing because the AESO is trying to process more SASRs than they have resources for.

It is up to the AESO to ensure that the new process becomes a success, and it is essential for continued investment in the Alberta market that it does.