As the number of hours the average US consumer experiences power outages continues to climb, the FERC is seeking ways to maintain grid reliability. One of the ways in which they have attempted to address this and other issues facing the US power grid is with FERC Order 881. FERC Order 881 requires all transmission providers to use ambient adjusted line ratings to evaluate near-term transmission service and to increase the accuracy of near-term line ratings.
Traditionally, static line ratings have been used to determine how much power a line can carry. Static line ratings are based on a worst case scenario to ensure public safety. However, static line ratings are inefficient. The amount of power a line can carry varies based on factors such as temperature, line composition, cloud cover, and more.
By moving from static line ratings to ambient adjusted ratings, the FERC is attempting to improve reliability, keep customer rates reasonable, and to improve the efficiency of the transmission system. But, should the FERC be requiring transmission providers to go even further?
As the penetration of renewable energy increases, extreme weather events become more common, and the grid continues to age, it may make sense to consider dynamic line ratings (DLRs). Ambient adjusted line ratings are ratings that take ambient variables into consideration based on season. Dynamic line ratings are hourly adjusted line rating values based on environmental factors. Were transmission providers to adopt DLRs, it would support better forecasting, a better understanding of power flow, and maximization of the existing transmission system. Dynamic line ratings would allow for transmission line capacity to be monitored and adjusted on an hourly basis, theoretically helping to lessen congestion.
Given that congestion is a critical component of the locational marginal price (LMP), lessening congestion could have a significant impact on the dynamics of the grid. Dynamic line ratings have the potential to make it easier to deliver power, optimize generation asset usage, and also change the pricing dynamics in areas of congestion.
There are some downsides to DLRs. They would be costly to implement as it would require monitors on transmission lines and conductors. Additionally, there is an increased risk of lines overheating or sagging with less conservative operational parameters.
Should the FERC require transmission operators to implement DLRs, it will be critical that market participants understand them and understand how they might affect the dynamics of the grid and resulting pricing. If you’re interested in learning more about DLRs, check out our report FERC Order 881 - Are Dynamic Line Ratings the Optimal Solution? Additionally, if you’re interested in learning more about how our data solutions can help you navigate a rapidly changing grid, sign up for a complimentary consultation with one of our industry experts.
Blog Author: Grant Watson, Market Analyst at Yes Energy