The power system has a variety operating constraints and limitations. Many of these limits have significant impacts on the ways in which the system is operated. Some of the results may be surprising.

The transmission system is limited by its ability to deliver power. System planners design the system to be able to deliver the power needed at the annual peak load, and the design includes an ability to withstand a single contingency failure such as a transmission line failure at peak load. The single line may trip off, but there should be no major blackout, and few customers if any would see more than a momentary flicker of their lights. Interestingly, this is a similar criterion to that used in the design of commercial aircraft. No single contingency will cause a catastrophe – both in the design and later in operations. For example, every take off includes a calculation to ensure that an engine loss at the worst time will not result in the aircraft failing to fly, or going off the end of the runway.

Power system operators meet similar criteria. There are requirements for both generation and transmission. By far the most flexible generating station is the hydroelectric facility with a reservoir that can be used on a large scale for water/energy storage. These plants have all of the good characteristics; fast start and change load rapidly, little or no delay in starting or shutting down, and best of all, any water that is not used for generation at one time can often be stored in the reservoir for later use. The availability of storage allows the generator to produce far more power than the river flow would support for short periods of time. This operation draws on the reservoir storage. Generation of this type is limited in its ability to deliver energy (by water total), but it can deliver almost any amount of power needed within the capacity of their installed generators (which are often installed with capacity much larger than the firm load capability). Unfortunately large generating stations with these capabilities are generally located only in BC, Manitoba, Quebec, and a small number of places in the US.

The popular run of river hydro plants have many of the same characteristics except they cannot store water. If they shut down, or reduce output, the unused water is wasted. They can be started and stopped as required, and can also change load quickly. Because of the fact that there is no storage, run of river plants are usually operated in ways that take maximum advantage of the available water, and that means that they generally operate at near constant output.
Simple gas turbine generators are often installed by utilities that need capability to meet peak loads for short periods, and then shut down for the balance of the day. In essence, a gas turbine facility is an aircraft jet engine driving a generator. These plants can be started and stopped quickly and frequently and can change load to meet changing demands. Their big shortfall is efficiency, because at about 30-35% efficient, they produce a large component of GHG and the fuel costs are high. Most of these plants burn natural gas. At current gas prices ($7/GJ plus $2 delivery cost) and operating at 30% efficiency, the fuel cost alone is 10.8 cents/kWh.

Combined cycle natural gas plants are simple gas turbine generators with heat recovery on the exhaust (HRSG – Heat Recovery Steam Generator) that generates steam that powers a steam turbine to drive a generator. These plants have an efficiency improvement over the simple gas turbines, operating at as much as 60% efficiency, but they loose some flexibility in their ability to start, stop and react quickly. When natural gas prices were below $5/MCF, many of these plants were built as the overall operating cost was low. At current costs and 60% efficiency, the fuel cost is 5.4 cents/kWh.

Wind and solar power are becoming popular sources of renewable energy. Solar power has the advantage that it is available during peak periods and not at night. Wind on the other hand, is relatively unpredictable and often produces best at night. Both wind and solar sources work best when they are combined with a hydro plant with even small amounts of storage capability.

Most of the rest of the large sources (fossil fuel or nuclear powered) involve the use of steam turbine driven generators. These systems lack flexibility. They require up to several days to start or stop, and for the most part, they operate best at constant output. The bad news is that almost 85% of US generation falls into this category. In Canada, the ratio is as low as about 36%. Unfortunately, the Maritime provinces, Ontario and Alberta have more than 50% of their generation in this category.

The mix of generating sources causes some real issues for operators. Because generation and load must be matched at all times, and peak loads are as much as 60% more than night low levels, the fact that over 80% of the generating capacity is difficult to adjust can lead to operating difficulties.

The electrical grid is quite unique. Electricity is delivered at the speed of light, and it is consumed at the moment that it is produced. For about 3 hours each day, electricity is in very short supply. For another 5-6 hours, there is a large surplus. Price changes of up to an order of magnitude are not uncommon.

Utilities that are based on steam turbine generation have a big disadvantage because of difficulty in adjusting generation to match the load. At peak hours they are typically looking to purchase energy – at the highest price for the day. At the low end, they generally have a big surplus that they must sell – at the low price for the day. On the other hand, utilities with large hydro storage facilities generally offer to purchase energy at the low cost times. They use this power for their own customers, and store water in their reservoirs by reducing generation. A few hours later when the price increases, they have surplus to sell – at a much higher price than they paid only a few hours earlier – often from the same utility.
In the eastern US, price changes of up to a factor of 10 in one day are common. The utilities in the area are almost all based on steam turbine generation. In the US Pacific Northwest, where most generation is from hydroelectric generation, and there is a considerable amount of storage available nearby, the price changes are much smaller, and the overall price is lower.

Ontario is currently planning to take their coal-fired generation out of service. At the same time, they plan to increase nuclear capability, and to install large simple gas turbine plants for peaking capacity. Ontario has put a large effort into demand response programs to reduce peak load, and they are installing smart meters on all homes to encourage people to shift to off peak use. It does appear, however, that they have a difficult problem meeting the off peak generation low levels. Large amounts of energy are exported to Quebec at night (Quebec has large hydro storage), at prices that are less than the price paid on a delivered heat basis for natural gas. At the same time, it appears that renewable energy is being wasted by passing extra water over Niagara Falls.

The real problem for the utilities is not so much the size of the peak or off peak loads, but it is the difference between the two levels. The utility can generally use equipment that has little ability to change load for the amount of power that is needed at the off peak levels. The difference between peak and the off peak level is then met using a combination of generation that can cycle, plus imports at peak, less the value of exports at the off peak period. This often results in a need for inefficient gas turbine facilities. It can also result in wasted renewable energy, including wind power, that is available during night periods.