FERC Order 881 - A Step Towards Dynamic Line Ratings for Improved Market Efficiency

Issued on December 16, 2021, FERC Order 881 requires transmission providers to implement ambient-adjusted ratings (AAR) to determine the maximum transfer capability of their transmission lines for near-term transmission services. Traditionally, static line rating (SLR) of a line is conservatively calculated under the almost worst-case operating conditions and are updated infrequently. These conservative assumptions may restrict the line capacity whenever the real weather condition is less stressful. More accurate assessment of transmission flow limits like AAR which is a limited form of dynamic line ratings (DLR) will positively impact the efficiency of market and system operations. DLR has the potential to expand practical line capacity, improve line utilization, reduce transmission congestion, and enhance market efficiency. In North America, independent system operators are heavily counting on mathematical optimization to dispatch generation resources and serve the net demand in their corresponding market footprints. This paper discusses AAR within the framework of transmission constraint management and its application to market clearing. Simulations of case studies are conducted on a large power network. The benefits of DLR/AAR are illustrated to demonstrate the effectiveness of improving social welfare.