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Fast responsive regulation resources are potentially more valuable as a power system regulation resource (more efficient) because they allow applying controls at the exact moment and in the exact amount as needed. Faster control is desirable because it facilitates more reliable compliance with the NERC Control Performance Standards at relatively lesser regulation capacity procurements. The current California ISO practices and markets do not provide a differentiation among the regulation resources based on their speed of response (with the exception of some minimum ramping capabilities). Some demand response technologies, including some generation and energy storage resources, can provide quicker control actions. California ISO practices and markets could be updated to welcome more fast regulation resources into the California ISO service area. The project work reported in this work was pursuing the following objectives: • Develop methodology to assess the relative value of generation resources used for regulation and load following California ISO functions • This assessment should be done based on physical characteristics including the ability to quickly change their output following California ISO signals • Evaluate what power is worth on different time scales • Analyze the benefits of new regulation resources to provide effective compliance with the mandatory NERC Control Performance Standards • Evaluate impacts of the newly proposed BAAL and FRR standards on the potential value of fast regulation and distributed regulation resources • Develop a scope for the follow-up projects to pave a road for the new efficient types of balancing resources in California. The work included the following studies: • Analysis of California ISO regulating units characteristics • California ISO automatic generation system (AGC) analysis • California ISO regulation procurement and market analysis • Fast regulation efficiency analysis • Projection of the California ISO load following and regulation requirements into the future • Value of fast responsive resources depending on their ramping capability • Potential impacts of the balancing authority area control error limit (BAAL), which is a part of the newly proposed NERC standard “Balancing Resources and Demand” • Potential impacts of the Western Electricity Coordinating Council (WECC) frequency responsive reserve (FRR) standard • Recommendations for the next phase of the project. The following main conclusions and suggestions for the future have been made: • The analysis of regulation ramping requirements shows that the regulation system should be able to provide ramps of at least 40-60 MW per minute for a period up to 6 minutes. • Evaluate if changes are needed in the California ISO AGC system to effectively accommodate new types of fast regulation resources and minimize the California ISO regulation procurement. • California ISO may consider creating better market opportunities for and incentives for fast responsive resources. • An additional study of low probability high ramp events can be recommended to the California ISO. • The California ISO may be willing to consider establishing a more relaxed target CPS2 compliance level. • A BAAL-related study can be recommended for the California ISO as soon as more clarity is achieved concerning the actual enforcement of the BAAL standard and its numerical values for the California ISO. The study may involve an assessment of advantages of the distributed frequency-based control for the California ISO system. The market-related issues that arise in this connection can be also investigated. • A FRR-related study can be recommended for the California ISO as soon as more clarity is achieved concerning the actual enforcement of the FRR standard and its numerical values for the California ISO

Assessing the Value of Regulation Resources Based on Their Time Response Characteristics