CAISO Starts Wind Forecast

By Published On: February 21, 2004

The California Independent System Operator?s new wind power scheduling program, set to officially launch in March, establishes a policy that other ISOs should adopt, according to early feedback. The program is expected to open with about 300 MW of new wind capacity, with another 1,000 MW of wind capacity possibly being added to the grid later this year. ?The California fix allows for a better forecast that makes it easier on everybody to integrate wind into the transmission system,? said Jim Caldwell, policy director for the Washington, D.C.?based American Wind Energy Association (AWEA). ?Without the California ISO program, there would simply be no contracts for wind power in California.? The program also affects solar power sales, he added. CAISO?s earlier rules caused numerous headaches for wind developers because it made project financing nearly impossible in the state, said Mauri Miller, a wind and solar developer. Part of the issue is the inherent difficulty in forecasting wind power. ?We all recognize that you cannot forecast by the hour, but we can do a lot better than we have,? Miller noted. The new program will benefit both the wind industry and the entire grid, he said. ?We have to figure out a way to purchase power from a technology that is performing the very best that Mother Nature allows it to perform.? Randy Abernathy, CAISO vice president of market service, said one of the grid operator?s ?top goals was to be able to forecast wind energy production far enough in advance to avoid firing up expensive and dirty peaking fossil fuel facilities.? A consensus process determined that a more sophisticated third-party forecasting service was needed to accurately forecast wind energy production two hours ahead. This two-hour-ahead forecast, instead of the 10-minute-ahead forecast used by fossil-fuel facilities, would then serve as the schedule of power delivery for grid operators. ?Our basic premise was to be able to predict wind generation in real time to keep our system balanced,? he said. ?Each individual wind project participating in the ISO?s program is required to install meters, share in the costs of forecasting, and schedule energy deliveries according to these state-of-the-art predictions of energy production.? Under the CAISO program, wind generators will be able to net the difference between forecast and delivered electricity hourly instead of every 10 minutes. A monthly financial settlement process then nets deviations from all energy production forecasts across all hourly intervals?all at the weighted average electricity price for the month. A wind project?s electricity generation follows fairly consistent seasonal patterns. Hourly and daily deviations in the variability of wind largely fade into the background when power production is averaged over the course of an entire month instead of every 10 minutes. Under CAISO?s former rules, deviations from the 10-minute forecast were subject to financial penalties when predictions over- or underestimated power production. The new program overrides previous penalties. In return, each participant is required to provide real-time meteorological and energy production data. This database will allow the wind industry, as well as CAISO, to better understand each wind project?s power production profile. Mark Smith, director of market affairs for FPL Energy, owner of the largest fleet of wind projects in the country, believes the California ISO is on the right track. FPL owns about 2,000 turbines in the Altamont Pass as well as significant megawatts in Tehachapi, Palm Springs, and Solano County. Independent system operators in the Northwest and Midwest are adopting the California approach to dealing with scheduling wind power, according to Caldwell. He noted that New York approached the problem by exempting wind from all penalties. While an outside observer might think this would be the wind industry?s preference, Caldwell gave a surprising response. ?They swept the problem under the carpet and ignored the idea that wind could be forecast,? he said. Another approach is used in Texas: wind generators are allowed to miss delivery schedules half of the time. Caldwell says that plenty of challenges remain before the new California wind scheduling program is adopted for the entire country. ?It is hard to sell California ideas anywhere else given what happened with restructuring,? he said.

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