18 August 2008
Dear David
Common Quality implications of Power Factor requirement in the Connection Code
The Common Quality Advisory Group (CQAG) at its meeting of 14 August discussed the common quality implications of the power factor requirements now set out in the
Connection Code under Part F1. In particular, the CQAG considered issues surrounding voltage management and the System Operator’s ability to meet the Principal Performance Obligations (PPOs) in Part C under certain conditions.
All the members of the CQAG believe – and strongly -- that the power factor requirements as set out in the Connection Code under Part F will make it both difficult and expensive to maintain system voltages within the ranges that are needed for safe and reliable operation of the system2.
The CQAG acknowledges that reactive power demand at times of peak load is an important issue in certain parts of the grid, and that this raises significant technical and economic considerations for transmission investment arrangements.
Safe and efficient operation of a transmission system requires that reactive power flows are carefully managed at all times and in all conditions to avoid voltage instability, assets operating outside their capabilities and, ultimately, demand curtailment due to potential or actual under/over voltage situations. Voltage management is a complex matter and varies with grid configuration and loading level, and demand characteristics – there is no uniform solution that can be applied to all grid exit points at all times.
The rules and policies governing voltage management are set out in Part C, including the Technical Codes, the Policy Statement, and the Procurement Plan. Voltage management is achieved through the System Operator’s operation of the power system in accordance
1 From 1 April 2010 the Connection Code requires that an off-take customer must maintain a power factor of not less than:
(i) 1.0 (unity) at each relevant Point of Service during each relevant regional peak demand period in the Upper North Island Region and the Upper South Island Region; and
(ii) 0.95 lagging at each relevant Point of Service during each relevant regional peak demand period in the Lower North Island Region and the Lower South Island Region.
with those rules and policies, co-ordinating generation, demand and ancillary services in real time.
The CQAG is strongly and unanimously of the view that the power factor requirements now set out in the Connection Code under Part F are likely to compromise the objectives of Common Quality and the ability of the System Operator to reliably operate the
transmission in a safe and efficient manner. We request that the Commission accepts and acts on the Common Quality Advisory Group’s advice on this matter.
To be more specific, the CQAG is of the view that the power factor requirements as they now stand in the Connection Code, are likely to lead to network companies and the grid owner making investment and operating decisions that will create significant practical difficulties for real time system operation. In particular:
• the CQAG considers that the requirement on network companies in certain regions to achieve unity power factor at peak demand is likely to lead to investment by network companies in reactive support equipment either embedded in their own networks, or at a grid exit point via a contract with the Grid Owner;
• this action will reduce grid loading at times of peak demand; however, if this equipment remains connected when the grid is lightly loaded there could be over- voltage issues either in steady state or following an event; this is because
transmission lines themselves are net generators of reactive power when the system is lightly loaded, and too much reactive power can result in voltage going
dangerously high;
• this situation creates voltage management issues for the System Operator; in overseas jurisdictions (e.g. the UK) the practice in such circumstances is to switch out transmission circuits to correct for over-voltage; however, New Zealand’s stringy grid means that this operational response is problematic (particularly with respect to meeting the PPOs under Part C and the Benchmark Service definitions under Part F);
• there are other power system operation issues to be considered in determining the appropriate technical capabilities of the reactive support equipment when making the investment decision (e.g. fixed versus switchable equipment), and this decision has commercial implications;
• the arrangements raise a potential compliance issue for network companies, the grid owner and the System Operator if the System Operator determines that, as a
reasonable and prudent operator (RPO) it cannot dispatch the reactive support equipment provided to correct off-take power factor, with the network company consequently failing to meet its power factor obligation under the Connection Code;
and
• the Connection Code only places a power factor obligation on off-take customers i.e.
at grid exit points (GXPs); a unity power factor requirement at GXPs could create high voltages at Grid Injection Points (GIPs) and making it difficult for generators to meet their voltage obligations under Part C.
The CQAG considers that there are other issues with the power factor requirements currently set out in the Connection Code, as raised by other submitters during and
following the consultation process, however it has constrained its comment here to matters relating to common quality and power system operation.
The CQAG understands that the Commission, through its transmission work stream, is considering certain aspects of the power factor requirements, particularly options to address compliance issues. This work is likely to lead to industry consultation on the issues and options in due course. The CQAG has asked that, as Chair, I write to you requesting that the issues set out above be included in the Commission’s consideration, and offering assistance in formulating and/or reviewing options to address the issues. It also notes the link between these issues and aspects of the Common Quality
Development Plan developed in the CQAG forum, approved by the Board and now being progressed through various common quality work streams.
The CQAG acknowledges the need to strike an appropriate balance between addressing transmission investment issues and operational considerations. The need to strike a balance between Common Quality and other subjects of the EGRs is not confined to Transmission issues. The CQAG would like to stress the importance of ensuring that the common quality and operational considerations of any rule changes receive adequate analysis and weighting in the decision process.
In this case the CQAG considers that affected parties have now had an opportunity to think through their response to meeting the Connection Code power factor requirements in the lead up to implementation, and that the industry as a whole would benefit from the opportunity to review the arrangements before possibly inappropriate investment decisions are made.
Yours sincerely
Toby Stevenson Chair
cc: Mervyn English, General Manager, Electricity Commission
Darryl Renner, Director Common Quality and System Operations, Electricity Commission CQAG members
Appendix: Managing Voltages on a Power System
Power systems can be visualised as two separate "systems" operating on the same physical assets.
The first system is about the flows of electrical power and energy. Generators produce electrical power (MW), transmit it over transmission lines so that loads can use it. The amount of electricity generated must match the amount of electricity used all the time. If a mismatch occurs, then the frequency rises or falls and the system operator -- and the power stations -- need to take action to restore the frequency to normal. If the frequency goes outside safe limits, the system will collapse.
The second system is to do with reactive power (Mvar). It is rather hard to visualise but, fundamentally, reactive power is what is needed to make sure that, all through the system, the voltage is within the range that is needed for safe operation of the system, the
generators and the connected load.
At generating stations, the generators generate -- or absorb -- reactive power so as to maintain the voltage supplied to the transmission system at the desired value. In general, transmission lines absorb reactive power so this loss of reactive power must be made up either by the generators or by equipment such as shunt capacitor banks at the receiving end. At times of high loads, if there is insufficient reactive power, receiving end voltages can go dangerously low and, in the extreme, voltage collapse can result. However, during periods of light load, high-voltage transmission lines act as net generators of reactive power. If too much reactive power is available, then the receiving end voltage can go dangerously high.
In general terms, it is desirable that the power factor of the load at the receiving end should be close to unity at times of maximum system demand. That is, the load should neither absorb nor export reactive power. At times of light load, the situation can be quite different. If the transmission lines are generating excess reactive power then it is desirable that the load should be operating in a mode that absorbs this reactive power. If this does not happen, then it is quite possible that capacitor banks installed at the load to ensure that the power factor is unity could be generating reactive power that the transmission system owner has to absorb by switching out transmission lines or by using reactors specially installed to get rid of the same reactive power. Without that these reactors, the voltage could go dangerously high.
In the real world, safe and efficient operation of the transmission system requires that reactive power flows must be carefully managed all the time. There is no uniform solution that can be applied to all grid exit points all the time. A requirement that loads should be at unity factor at times of peak demand is an example of a solution that could be correct in some places and seriously wrong at others.
That is why managing voltage -- and hence, reactive power -- is a very important part of common quality.
