By Christine Cordner

Fresh off the completion of its Competitive Renewable Energy Zone transmission build-out, Texas is now grappling with the growing risk of harmful subsynchronous oscillation and whether generators or transmission providers should foot the bill for mitigation and prevention as more wind energy supplies hit the Electric Reliability Council of Texas Inc. grid.

The Public Utility Commission of Texas during a July 28 workshop began to dig into subsynchronous oscillation, or SSO, aware that the risk of the phenomenon has increased with more potentially nonsynchronous wind energy projects enabled by the 3,600-mile CREZ build-out completed in January. The regulators in May decided to investigate the SSO issue as cost allocation was coming to a head in an ongoing ERCOT stakeholder review of mitigation and protection solutions. PUCT staff on July 21 issued a strawman rule to start the process, with the agency expecting to produce a proposal to open a rulemaking in mid-September and a proposal for adoption in February or March of 2015. (Project No. 42631)

SSO can occur in any grid system when resonance between a generator and a series-compensated transmission circuit happens at frequencies lower than the normal 60-hertz operating frequency. Without proper mitigation, SSO can quickly destroy resonating transmission elements and equipment of thermal and wind generators alike, possibly leading to cascading power outages from generation tripping offline. SSO can also cause long-term wear and tear to equipment, making generation more vulnerable to tripping during emergency situations when the power is needed.

SSO risk in Texas specifically is tied to series-compensated CREZ lines designed to enable power flow to load centers from more remote projects in the western part of the state. Essentially, the more wind energy on series-compensated lines, the more SSO risk to the grid, especially if wind projects do not factor in protection and mitigation when developing their interconnections. And Texas has and will see a massive amount of wind projects connecting into CREZ transmission. ERCOT in March reported a production record of 10,296 MW, and projects in its interconnection request queue totaled over 25,000 MW as of June.

ERCOT already saw an example of what SSO can do when two wind generation systems and a series-compensated system of AEP Texas in October 2009 experienced SSO. Both turbine and utility equipment were damaged in the event, according to a 2010 report given at a Western Protective Relay Conference.

During the workshop, ERCOT Director of System Planning Warren Lasher said that while stakeholders in June tabled their ongoing work on Nodal Protocol Revision Request 562 in order to allow the PUCT to weigh in, the SSO issue will not be going away anytime soon. Generation curtailment due to SSO is "likely not a significant issue today," but it will be down the road as more wind generation comes online in the next few years, he said. ERCOT expects in September to issue a study of potential curtailment issues that is expected to inform the PUCT discussion, he said.

Of concern for generators at this point is that the SSO risk issue remains poorly understood, with the PUCT looking to move too fast in proposing efforts to ensure grid reliability. Adrian Pieniazek, director of market policy at NRG Energy Inc., said his company has been told two of its plant sites could be at risk, including its 1,689-MW, coal-fired Limestone plant in Limestone County and a wind project in western Texas that he did not name. "It is too early to determine what to do," he said, noting that NRG has not seen any screening studies for its many other ERCOT units.

Pieniazek's comments echoed those made by NRG and other members of Texas Competitive Power Advocates in July 25 comments filed with the PUCT, with the trade group urging the regulators not to jump into a rulemaking until generators can get a better grasp of the potential capital costs they may face.

"TCPA is not confident that the full scope of the SSO problem has been considered, and believes that all studies on SSO should include a comprehensive, transparent approach that includes all risks to the entire system," the trade group said. "The fact that a complete evaluation of the SSO risk [by ERCOT] is still underway with an unknown completion date, coupled with ERCOT's evolving criteria for protection and mitigation measures, makes it clear that the scope of SSO issues are still not totally understood, and that attempts to define mitigation and protection schemes is premature, and thus the appropriate content of a Commission rule cannot be adequately determined at this time. Our members believe that additional workshop forums are necessary to continue vetting technical issues on SSO and that consideration of a draft rule can be postponed until everyone has the opportunity to understand the total scope of the SSO problem."

TCPA represents Luminant, GDF SUEZ Energy North America, Topaz Power Group, Calpine Corp. and NRG, which together provide more than 70% of the total net operable generating capacity in ERCOT.

Luminant Energy Co. LLC and Luminant Generation Co. LLC in their July 25 comments were more pointed, wanting transmission service providers to bear responsibility for implementing and paying for measures to protect against or eliminate the potential for unstable SSO interactions because their equipment is responsible for creating the risk.

"In the event that protection or structural mitigation is required for existing generators' equipment, TSPs should still have to pay for these measures, because the measures are required to ensure that the TSP's equipment functions as intended, without harming system reliability and existing generators," Luminant said. "Therefore, rather than developing a cost recovery mechanism for generators … such generators should be able to contract with TSPs to pay for the associated costs, which would then be eligible for inclusion in rates. In contrast, new generation resources that will face SSO risk should have to take the system as they find it and bear the responsibility and cost for protecting against and mitigating SSO risk."

Potential pressure on new wind development

EDP Renewables North America and E.ON Climate & Renewables North America LLC in their July 25 comments warned of a chilling effect on generation investment by imposing new obligations on developers versus placing SSO mitigation cost responsibility with transmission service providers. "Because they are responsible for the construction, operation and maintenance of their respective pieces of the overall ERCOT grid, transmission service providers are in the best position to study SSO risks and take appropriate action to avoid or ameliorate SSO risks as they arise. … Neither existing generators nor those seeking to interconnect should bear the costs of protection equipment and the risk of increased curtailment as the strawman suggests," the project developers said.

Project investor GE Energy Financial Services in its July 25 comments advocated against attributing causation of SSO risk to wind farm transmission customers. "We note that, in considering a similar situation where an interconnecting transmission owner added series capacitors to a transmission line and caused generator SSO Risk, the Federal Energy Regulatory Commission [in April] determined that the costs 'are not the result of interconnecting a generator to the transmission grid but stem from modifications on the transmission system itself and thus the costs could not be imposed on the generator,'" it said. (Docket No. EL14-16)

Speaking at the workshop, Colin Meehan, First Solar Inc.'s director of regulatory and public affairs, said that while solar facilities face far less SSO risk than thermal generators, the issue should be less about a given facility and more about grid benefits. Therefore, generation facilities, whether existing or yet built, should have the opportunity to recover their costs, he said.

"It is important to recognize the difficulty of determining causation with regards to SSO risk as the risk is caused by an interaction between the transmission and generation infrastructure. Historically this is the reason that the cost of such transmission system solutions have been uplifted, and changing ERCOT's approach to cost allocation in this case would lead to a bias against new market entrants who can provide cost-effective mitigation solutions," said Meehan in his July 25 comments to the PUCT. "It is important to create an environment that fosters new investment in generation supply to meet Texas' ever growing economic needs. By continuing to allocate the cost of potential solutions in the same manner the Commission will avoid penalizing new market entrants simply because they have the most cost-effective solution identified to mitigate SSO risk."

First Solar has an interest in Texas, having developed the world's largest solar photovoltaic plant in Yuma County, Ariz. — the 250-MW Agua Caliente project — with clear eyes on the Lone Star State. The company is finishing construction on the 22-MW Barilla project in Pecos County within ERCOT, the first merchant solar project in the U.S. Meehan said Barilla is expected to be commercially operational in late August.

First Solar is among the companies that recently formed a new trade group to promote solar energy in a state that has seen far more wind development despite having plenty of sun. Meehan told SNL Energy on July 29 that his company is not currently planning an expansion of Barilla, but it does have the potential for building out at the site. "We see lots of opportunities in the market. … We are ready to compete," he said, noting that First Solar's ability to continue merchant development in Texas depends on "where the market is and where [solar panel] costs are."

Amid the swell of generators looking for ratepayer funding of SSO mitigation and protection, transmission owners and consumer advocates not surprisingly made it clear that this suggestion would not be welcomed with open arms, especially considering that the price tag for work could run well into the millions for each mitigation project.

Phillip Oldham of the Texas Industrial Energy Consumers said during the workshop that load should not have to pay for new generators installing protective equipment. "We are resistant to that," he said, noting that new generators should factor SSO protection costs into their plant development decisions. Meanwhile, Liz Jones, Oncor Electric Delivery Co. LLC's director of regulatory affairs, said the situation should not become "a check-writing exercise" for utilities to help generators mitigate SSO issues. She also is worried about liability issues for transmission service providers that do not own and maintain the generation being mitigated for SSO risk. "I recognize the generator concerns, but it is not clear to me that TCOS [a transmission service provider's transmission cost of service recovered through a network service rate set by the PUCT] is as simple as we would like to think [to pay for mitigation and protection]," she said.