Adequacy

The purpose of this site is to bring together information to help those trying to assess adequacy in this context. It draws on a wide range of work that EPRI and the industry has conducted in response to the challenge of the emerging grid. We welcome your feedback on how to make this increasingly useful to support you and your decisions.

Resource Center Layout

This resource center focuses on basic RA concepts, methods and metrics and more application focused topics such as study tool choices and methods to assess the impact of certain technology classes. Each of the links below brings you to a dedicated section to each issue facing practitioners when conducting adequacy studies.

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What is Resource Adequacy?

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Resource adequacy (RA) is an assessment of whether the current or projected resource mix is sufficient to meet capacity and energy needs for a particular grid. The resource mix refers to the mix of supply-side generation, such as solar or nuclear paired with energy storage, and demand-side flexibility, such as demand response and energy efficiency. RA assessments are used to identify potential shortfalls in the availability of resources across different time frames, from long-term planning (5 to 20+ years) to seasonal and day-ahead assessments. As the RA look-ahead time approaches real-time operations, options to address identified shortfalls become fewer and more expensive.

Reliability is considered to have two main components, one of which is adequacy. Security, also referred to as deliverability, is the other component of reliability that ensures the network facilitates power flow and maintains stability after disturbances.

Read more

• CIGRE, “The future of reliability - Definition of reliability in light of new developments in various devices and services which offer customers and system operators new levels of flexibility“, Technical Brochure No 715, 2018

• North American Electric Reliability Corporation (NERC), “Definition: Adequate Level of Reliability for the Bulk Electric System” , March 2013 (Link)

• Electric Power Research Institute, “Capacity and Energy in an Integrated Grid”, EPRI, Palo Alto, CA: 2015, 3002006692 (Link)

What does it mean to have adequate resources?

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RA criteria are probabilistic. That means that a system that meets RA criteria is expected to have sufficient supply and demand-side resources to meet peak system demand, with a certain level of confidence. From modeling the range of expected conditions, a system that is planned for adequacy may still experience temporary and rare periods of scarcity, some of which may lead to involuntary load shedding if the same conditions arise in real time operations. Load shedding is the interruption of customer load sufficient to balance supply and demand and to ensure available resources sufficient to respond to unforeseen disturbances or contingencies.

Adequacy criteria themselves recognizes that some periods of scarcity may occur, with very low probability. Typically, these scarcity events are probable only during a confluence of conditions that would have low probability in combination. These combinations of conditions are considered so rare that planning to meet demand during these ‘very rare’ events is not cost-justifiable. In fact, some systems derive their adequacy criterion economically, searching for the limit of cost-justification. Whether searching for an optimal level of adequacy or projecting resource needs to meet an adequacy target, is Still, in a valid RA assessment it is critical that a realistic range of conditions is considered, some being beyond past experience.

It should be noted that loss of load resulting from external factors such as storm damage, wildfires, or other natural disasters that interrupt delivery of power are not considered in resource adequacy.

Who is responsible for resource adequacy?

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Setting adequacy requirements, assessing adequacy, procuring capacity, and contracting are distinct tasks that are intertwined and related to ensuring sufficient capacity. Adequacy standards and requirements normally originate in laws, regulations, or license agreements. State public utility commissions and other regulators may hold RA proceedings and approve requirements, standards, and the actions necessary to secure adequacy. RA assessments are conducted by a variety of entities. In regions with centralized wholesale markets, they may be conducted by independent system operators (ISOs), transmission system operators (TSOs), regional security coordinators (in Europe), or regulators, irrespective of who may be responsible for ensuring adequacy. In other regions, utilities are typically responsible for assessing and ensuring adequate supply themselves, using methods and criteria subject to approval by regulatory and other authorities.

In the structured-market areas, there are three primary classifications of methods by which capacity is secured: 1) centralized capacity markets (e.g. PJM), 2) decentralized or regional capacity procurement (e.g. California) and 3) no explicit capacity markets (“Energy Only” markets such as in Texas).

How is resource adequacy changing?

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Read More

• North American Electric Reliability Corporation (NERC), Generating Availability Data System (GADS), (link)

• European Network of Transmission System Operators for Electricity (ENTSO-E), Mid-term Adequacy Forecast (link)

• National Grid Electricity System Operator, Electricity Market Reform (link)

• Electric Power Research Institute, Considering Generator Cycling in Resource Adequacy. EPRI: 2018, 3002013488 (link)

• Electric Power Research Institute, Developing a Framework for Integrated Energy Network Planning (IEN-P). EPRI: 2018, 3002010821 (link)

Until recently, RA in most systems referred to having sufficient planned capacity (traditionally, dispatchable generation) to meet the expected peak demand over a study period, which may range from months to years or decades. Several factors are impacting the ability of planners to assess resource adequacy.

Changing Generation Mix. There are more types of power generation, from traditional thermal generation, like coal, nuclear and natural gas-fired generation, to weather-dependent renewable generation such as hydropower, wind, and solar. These resources vary widely in their ability to produce electricity when demand is high. Demand-side resources, such as controllable or deferrable demand can contribute to RA, and battery storage is a growing resource, though its RA contribution is more complex to evaluate than for other resources.

Changing Demand Characteristics. Improving energy efficiency affects future projections of energy demand. Load shapes are also changing, which may create new types of stressful periods. For example, large net-load ramps may stress systems if generators cannot respond quickly, even if there is sufficient capacity. Electrification of various parts of the economy may change load shapes and magnitudes, while also providing additional demand-side flexibility. Climate change may also impact demand and needs to be considered in studies with longer horizons.

Energy-Limited Resources. The evolution of RA assessment is also shifting toward both available capacity and energy supply. Some modern resources, like batteries and demand response, have limits to their energy capability, so these factors also need to be accounted for. Hydro-dominated systems have long seen this dual need for capacity and energy. To produce a more accurate picture, RA models are becoming more sophisticated by including all the above elements, as well as transmission capacity, fuel availability, and other factors. The very nature of what constitutes an adequate system is increasingly an open question in the era of flexible demand. These changes are discussed in the later section on challenges.

Is the risk of capacity shortages only during the peak demand period?

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Read more

• Electric Power Research Institute, Program on Technology Innovation: Capacity Adequacy and Variable Generation, Palo Alto, CA: 2016, 3002007018. (link)
• North American Electric Reliability Corporation (NERC). Standard EOP-003-1— Load Shedding Plans. (link)

While the annual peak demand is most likely the period of highest risk, capacity shortfalls may occur at other high daily peaks and in the period surrounding the peak hours. Some systems experience peaks in both the winter and the summer, reflecting heating and cooling load. Increasingly, the greatest likelihood of a capacity shortage occurs at the peak net-load interval. Net load represents the “net” demand not served by wind and solar generation and which must be met by traditional resources. Similarly, risk can commonly occur during spring and fall when maintenance outages typically occur.

As a result, modelling and assessing RA is often conducted with hourly simulations of many scenarios, rather than just the daily peak. The outage in California is a good example of a shortage occurring at a time that did not coincide with the typical peak demand period of either day or year.

What happens when a real-time capacity shortage is declared?

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As system operators forecast a capacity shortage risk, they may take several actions to address it, including:

1. Days ahead, market notices about the expected grid conditions are issued to market participants;
2. Plants undergoing non-essential, planned outages are recalled into service, if possible, and new outages are deferred;
3. Support from neighboring regions may be requested;
4. Public conservation notices may be issued depending on the magnitude of the forecasted shortfall;
5. Resources contracted for “capacity adequacy” are notified and resources that take a comparatively long time to come online are instructed to be online; and
6. Distribution network operators may be notified of the need to implement conservation voltage reduction.

As conditions evolve these actions are updated. At the day-ahead and intra-day stages, forecasts are regularly updated to reflect changing demand and renewable production positions. If available generation, storage, import, and demand-response capacity is insufficient to meet operating reserve plus forecasted demand, scarcity pricing may be invoked. In scarcity periods, energy-market prices often increase reflecting the tightened supply/ demand balance and reach market ceiling levels (e.g. 9,000 $/MWh, 1,000 €/MWh).

As a real-time scarcity event worsens, the available mitigating actions may reduce to only load shedding. Expected production, demand schedules, and grid topology are analyzed for congestion and energy deliverability issues. Should an operational threshold be reached (typically a shortfall of operating reserves), coordinated, rolling, involuntary interruption of loads is conducted, for the duration of the scarcity event, known as load shedding. The operational goal is to maintain grid cohesion by holding sufficient operating reserves.