Yes Energy News and Insights

What You Need to Know about FERC Order 1920

FERC Order 1920 identifies seven specific benefit metrics to consider for long-term transmission planning. Here’s how Yes Energy’s EnCompass™ service can help you meet these requirements.

On May 13, 2024, the Federal Energy Regulatory Commission (FERC) issued Order No. 1920, a landmark ruling requiring US transmission planning regions to undergo long-term transmission planning.

The rule aims to ensure a reliable grid by requiring providers to plan for future needs. This includes anticipating changes in generation, growing data center loads, and extreme weather events. The rule also includes cost-allocation requirements and emphasizes the role of states in the planning process. For some providers, these changes will be an entirely new way of planning. 

Long-Term Transmission Planning 

FERC Order 1920 mandates that transmission providers include a 20-year assessment every five years in their long-term planning process. Transmission planners have to also consider seven specific benefits when evaluating and selecting long-term regional transmission facilities:

  1. Avoided or postponed upgrades to reliability transmission projects and replacement of aging infrastructure
  2. Reduced probability of loss of load or decreased planning reserve margin 
  3. Production cost savings
  4. Decreased transmission energy losses
  5. Lowered congestion because of transmission outages
  6. Mitigation of extreme weather events and unexpected system conditions
  7. Capacity cost benefits from lowered peak energy losses.

How EnCompass Can Help You Reach Transmission Planning Compliance 

Order 1920 provides more tools for transmission planners to determine the value of transmission. However, with compliance deadlines approaching, some providers will need additional support. 

The effective date of Order 1920 will be August 12, 2024, 60 days after its publication in the Federal Register on June 11, 2024. Compliance filings are due within 10 months of the effective date, by June 12, 2025.

Entities need to file in compliance with the interregional transmission coordination requirements within 12 months of the effective date.

EnCompass’ power planning model can help. 

Our combination of zonal capacity expansion and nodal market analysis features will help satisfy the new requirements that transmission providers face. 

1. Integrated Transmission 

Integrated transmission planning occurs annually and assesses near and long-term economic and reliability transmission needs. With the new FERC regulations, modeling 20 years into the future will require adding several resources to ensure generation can meet load and reserves. The first step in building a model for year 20 is capacity expansion. 

EnCompass can help providers site and size generation resources of any technology type. In the image below, we’ve used EnCompass to illustrate the reserve margin against project capacity. The bars represent megawatt (MW) capacity built by technology type, and the black line represents reserve margin percentages. By comparing base case and change case simulations, you can determine reductions in planning reserve margins. EnCompass also reports any loss of load (hours and days) and expected unserved energy to help support reliability. 

Source: EnCompass with Yes Energy

Similarly, the chart below shows reserve margin against project capacity. The bars represent MW capacity built by technology type and the black line represents reserve margin percentages.

Source: EnCompass with Yes Energy

2. Transmission Expansion Plans 

Transmission expansion planning is the process of identifying needed expansion as well as the investments needed for that transmission. 

EnCompass can help identify: 

  • Changes to congestion patterns when new transmission is constructed 
  • Additional renewable generation you can deliver to the grid
  • Production cost savings, which is identified as a new metric in Order 1920.

To accurately measure the benefit metrics, the study scenario must mirror the grid. This can be a scenario based on expected conditions and multiple sensitivities or “what if” scenarios, including extreme weather events. EnCompass can model new AC and DC transmission circuits as well as any type of generator technology along with the operating parameters and costs, demand, ancillary service requirements, and constraints. EnCompass can then simulate the grid and examine the results, helping determine whether new transmission projects are beneficial. The results will also help you understand whether you can defer or avoid planned reliability projects.   

To visualize the results, you can use the flow diagram to see transmission line flow direction and magnitude for any hour (see below). 

Source: EnCompass with Yes Energy

The diagram is color-coded so you can easily determine voltage levels. Binding transmission circuits change color from blue to red, and one click on the bus name (or flow limit) provides detailed information about the bus or transmission circuit, respectively.

3. Regional Planning 

EnCompass can also help you develop resource plans that consider all potential options. This includes central station construction, purchased power agreements (PPAs), renewable energy, bulk storage, new transmission projects, energy efficiency programs, and demand response.

Once you set the resource mix, EnCompass can perform a security-constrained unit commitment and economic dispatch to calculate locational marginal prices (LMP) and their components as well as identify congestion, transmission flows, and shift factors on a base case and contingency condition. If you’re concerned about impacts on a transmission circuit, EnCompass can help identify resource impacts. To help determine how grid congestion is impacted by transmission outages, use the EnCompass Constraint Maker to identify and include new constraints for consideration.

In the image below, we evaluate flows across the selected branch to see resources contributing to the flows. We can also identify flow direction as well as flows attributed to individual resources. This allows us to track who is contributing to grid congestion as well as who is providing counterflows.

Source: EnCompass with Yes Energy

In the image below, we’ve used EnCompass to project base case shift factors and transmission flows in the Electric Reliability Council of Texas (ERCOT). Using this feature, you can see the impact of injecting energy at the selected source (e.g., generating resource or bus) and impacted branches. In addition, you can see what happens to flows when a branch is placed on outage.

Source: EnCompass with Yes Energy

Learn More

We believe FERC Order 1920 will lead to more effective planning and a robust and reliable transmission grid that’s capable of delivering low-cost generation and benefit to all stakeholders. To achieve this, market participants will need the right tools capable of complex analysis of multiple scenarios.

EnCompass is here to help. We can assist with:

  • Producing market price forecasts
  • Identifying transmission congestion and constraints
  • Forecasting generator operations and renewable curtailment
  • Making optimal power supply decisions. 

EnCompass can aid with transmission and generation development, portfolio optimization, and capacity expansion as well as assessing market dynamics and policy implications.

Request a demo to learn how EnCompass can help support your transmission planning needs. 

About the Author: Jason Atwood has experience in operations and engineering, generation and transmission planning, energy trading support, and market design. His work spans several energy sectors, including investor-owned utility, independent system operator, electric cooperative, and independent power producer. He is helping Yes Energy clients understand how our EnCompass solution can meet their needs.

Subscribe by email