ppt lave carnegie
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Lester Lave
Carnegie Mellon Electricity Industry Center
www.cmu.edu/electricity
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Carnegie Mellon
Electricity Industry Center (CEIC) Founded in August 2001 after competitive proposals
Long-term core funds: The Sloan Foundation & EPRI
Project funding from industry & government
Co-Directors: Lester Lave & Granger Morgan
Executive Director: Jay Apt
17 Faculty & 23 Ph.D Students in Business,
Engineering & Computer Science schools
Strategic, interdisciplinary examination of industrys
problems and opportunities
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Current Research Areas
Market Structure & Performance
Distributed Energy Resources Advanced Generation & Transmission Technologies
Environmental & Sustainability Issues
Reliability & Security
Supported by:
The Alfred P. Sloan Foundation Tennessee Valley Authority
Electric Power Research Institute U.S. Office of Naval Research
U.S. National Science Foundation McDermott Technology
U.S. Environmental Protection Agency ABBU.S. Department of Energy Alliant Energy
National Rural Electrical Cooperative Association
Pennsylvania Office of Energy & Technology Development
New York State Research & Development Authority
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Market Structure & Performance
Market Design to Control Monopoly Power
Modeling Investment Incentives in
Deregulated Electricity Markets Risk Management in Electricity Markets
Designing complete markets all services
Demand estimation & management
Autonomous Agents that Learn
Valuation of Ancillary Services
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Distributed Energy Resources
Distributed Decision-Making
Engineering-Economics of DER
Regulatory/Institutional issues for DERMarket Evolution
Air Quality & Life Cycle Analysis of DER
Distributed Generation & Microgrids
Interconnect Problems & Standards
Benchmarking Test Systems
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Advanced Generation & Transmission
Modeling Advanced Environmental Controlsin New Generation Plants
Multipollutant Regulation & the Cost of CO2Control via Carbon Capture & Sequestration
The Cost of Regulatory Uncertainty in AirEmissions for a Coal-fired Power Plant
Advanced Transmission Technologies: Cost
& Benefits, Reliability, ControllingCongestion, Investment Incentives
Is It Better to Ship Coal or Electricity?
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Environment & Sustaintability
Life Cycle Assessment of Fuel/Technology
options
Large-Scale Wind Generation Understanding Opposition to New
Transmission Lines
Animal Waste to Power Biomass Cofiring
Reducing CO2 Emissions (2010 to 2050)
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Reliability & Security
Architecture of a Survivable Power Grid Managing Congestion
Modeling a Grid with Merchant Transmission
Survivable Missions
Lessons for Grid Operations from Air Traffic
Control & Other Critical Infrastructures
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Benefits of Opening Electricity
Markets to Competition
A New Competitor has No Obsolete Plants orExcess Manpower or High Labor Costs
They Can Offer Low Prices & Take Business
from Current Company To Survive, Current Company Must Cut Costs
or Force Customers to Pay Their Prices
Bad Decisions Cost Investors, Not Customers BUT New Company Needs TransmissionNo
Simple to Introduce Competition
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Benefits of Joining US Market
Canada & Mexico Have Resources to Sell
Joining the US Market Gets Better Prices
Expanded Generation & Transmission Capacity
Builds Local Infrastructure, Providing More
Energy
Needed Upgrade to Technology & Infrastructure
BUT It may Raise Local Energy Prices & Lead
to Disruptions
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Integrating North American
Electricity Markets
Electricity is Different
A Shortage of Petroleum, Natural Gas, or Coal
is Handled From Inventories. A long Outage
Leads to High Prices & a Few UnhappyConsumers
Electricity has No Storage: Shortages Cause
Massive Blackouts (California 2000, August 14)
Integrating NA Energy Markets has Major
BenefitsBut Also Major CostsAugust 14
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Should Mexico & Canada Join a
NA Electricity Market?
Before Deregulation the Answer was YesOpportunities to Sell Resources at High Price
Economies of Scale in Generation
Financing for Home Infrastructure After the US Market is Restructured, the
Answer is Probably YesBe Careful
A Competitive Market Should Allow Good Pricesfor Resources & Greater Reliability
It Will Help Integrate the Three Economics &
Produce Environmental GainsMeet Kyoto Goals
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Collateral Damage From US
Deregulation Californias Debacle in 2000 Led to High Prices
Throughout the West: Montana, BC, Arizona
This Disrupted the Economy (Aluminum inWashington) & was Costly to Consumers
Deregulation Problems Caused the August 14
Blackout: Major Costs to Ontario Some Previous NE Blackouts Caused by Canada
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Risks & Rewards to Mexico &
Canada From Integration US Restructuring is Imposing Costs & Reducing
Reliability in the USAnd Elsewhere
There Will be Difficult Times Until the
Restructuring Issues are Resolved
Integrating the Energy Markets, Like Integrating
the Economies Opens Mexico & Canada to
Fluctuations in US Markets & Vice Versa
Integration Presents Many Opportunities & Risks
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Should Mexico & Canada Open
Electricity Markets & Integratewith the USA?
Open Markets Should Lower Prices But Impose
Costs on Electricity Company & Workers
Restructuring Must be Careful & Learn From
Experience in UK, Austrailia, California,
Integration has Large Benefits & CostsCareful
of Unsettled US Markets
Perhaps a DC Interface?
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Thank You.
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Some Recent Large Blackouts
11/9/65 Northeast 30 million people
6/5/67 PA-NJ-MD 4 million
5/17/77 Miami 1 million 7/13/77 NYC 9 million
1/1/81 Idaho-Utah-Wyoming 1.5 million
3/27/82 West 1 million
12/14/94 West 2 million
8/24/92 Florida 1 million
7/2/96 West 2 million
8/10/96 West 7.5 million
Jan 98 Qubec 2.3 million
Feb-Apr 98 Auckland 1.3 million
12/8/98 San Francisco million
8/14/03 Great Lakes-NYC 50 million
8/30/03 London million
9/18/03 Tidewater 4 million
9/23/03 Denmark & Sweden 4 million
9/28/03 Italy 57 million
11/7/03 Most of Chile 15 million
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0 5000 10000 15000 20000 25000 30000 35000
P, the size of the power outage in megawatts
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0 5000 10000 15000 20000 25000 30000 35000
P, the size of the power outage in megawatts
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Can Blackouts be Prevented?
The HV part of the system contains 157,000miles, thousands of nodes
Natural disasters: Ice storms, hurricanes,
earthquakes, etc.
Qubec Ice Storm770 transmission towers
Hurricane Andrew300 towers down
Hurricane Isabel3 million without power
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A Solvable Problem
Survivability is the ability of a system to
fulfill its missions, in a timely manner, in
the presence of attacks, failures, oraccidents.
H.F. Lipson & D. A. Fisher, SurvivabilityA New Technical & Business Perspective on Security, Proceedings of the 1999 New Security Paradigms Workshop, Caledon
Hills, Ontario, Sept. 2124, 1999, Association for Computing Machinery, New York, NY, available at http://www.cert.org/research/.
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A simple example
When the power goes out, traffic snarls in urban
cores, making it impossible for emergency vehiclesto get through.
In a normal blackout, this is a problem. If ablackout were part of a terrorist attack, it could bevery serious.
While old style traffic lights required something like150 watts, modern traffic lights that use lightemitting diodes (LEDs) use less than 15 watts.
Combined with solid state electronic controllers,LED traffic lights can be kept running for severaldays on battery back-up.
DHS might consider helping cities with theincremental cost of the batteries & controllers.
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A Solvable Problem
Recognize that blackouts will happen
Reduce the social & economic costs by
assuring that critical missions continue
Traffic lights
Water & sewer pumps
Natural gas pressure
Emergency service systems
Exit from subways & elevators
Crucial economic functions
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What Went Wrong in California?
Everythingevery requirement not met:
Big generators could control price by withholding
supply
No markets for reactive power, etc.
All power in hour ahead marketno day ahead or
long term contracts
System operator assumed that demand completelyinelastic, didnt control transmission, and could not
control fraud
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Curtailing Market Power
To ensure that no firm has the power to raise price& profit by withholding capacity:
Regulate price during high demand Increase generation capacity
Increase transmission capacity
Increase demand response Control firm size by divesting assets
Long-Term contracts
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Transmission Muddles: Operation
Transmission grid designed to get power fromcompanys generators to customers not serve
deregulated market Locational Marginal Prices (LMP) handle
congestion
Kirchhoffs Law makes LMP extremelysensitive to location of supply, demand, &transmission capacitySusceptible to gamingby market participants
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Transmission Muddles: Investment
Dont use LMP to site new transmission!
Merchant transmission => gaming, e.g., railroads
in 1900greenmail & disruption Transmission must be centrally planned,
operated, & maintained
Ownership & control by utilityISO rules?Control by ISOmaintenance, etc. by utility?
Pay for new transmission with LMP plus constantfee per MWhr-mile
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ME
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1990 1992 1994 1996 1998 2000 2002
/kW
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Residential
Industrial
Maine
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OH
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1990 1992 1994 1996 1998 2000 2002
/kW
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Residential
Industrial
Ohio
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NC
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1990 1992 1994 1996 1998 2000 2002
/kW
hResidential
Industrial
North Carolina
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CA
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1990 1992 1994 1996 1998 2000 2002
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Residential
Industrial
California
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NV
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1990 1992 1994 1996 1998 2000 2002
/kW
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Residential
Industrial
Nevada