‘A Day in the Life of the Grid’ with FERC Chairman Wellinghoff

The Chairman of the Federal Energy Regulatory Commission visited Stanford to address a packed room full of students from Law, Business, and Engineering to offer an overview of how our national energy grid operates.

Some of the takeaways from Chairman Wellinghoff’s talk:

• The ideal grid would operate a constant power output rather than cycling with demand and would operate with a low load factor to minimize line losses
• FERC is responsible for the interstate transfer of power, the high voltage (100kV and above) power lines, and the markets for wholesale power
• Spot wholesale prices of energy could vary greatly even within hundreds of miles of one another due to bottlenecks to transmitting excess energy to places of high demand
  

  Midwest energy prices at 1am

  

  Midwest energy prices at 12pm

   

   

   

   

   

   

   

   

   

• GE Data Center in Louisville, Kentucky has battery storage, thermal storage, and diesel generators to maintain their own operations – however, they are unable to use these assets to benefit the local grid
• Regulation services are currently combustion based generators to respond to demands from the ISO; we saw an example of how electric vehicles are capable of providing these regulation services (FERC Rule 755 enables faster responding regulation services to command higher prices for service)
• Commercial buildings (with the right control systems/software) could serve as thermal storage by HVAC cooling during times when prices are low
• If Wal-Mart had access to the ISO pricing, they could optimize their operations on heating/cooling to help optimize the grid for all players
• If the wholesale prices can be made available down to the consumer level, their energy supply/storage assets can be dispatched to improve the overal integrity of the grid

Bonus Content (from his talk on 11/27)
On Tuesday, 11/27 Chairman Wellinghoff discussed two recent rulings (Order 745 and Order 755) which have impact on the economics for demand response and regulation services (balance and stability to the grid):

Order 745:
Focused on Energy and Demand Response to encourage these resources to be a part of the energy market
The key takeaway is the economic playing field was leveled for energy/demand response providers.

Order 755:
All about ‘paying for performance’ – new resources which could provide services that are more valuable than what can traditionally be offered. Resources on the grid need to match demand in real-time and services which can respond faster ought to be better compensated for this service. Rather than combustion turbines for regulation supply, other resources like batteries, etc. are faster responding and should be paid their value to the grid.