Inverter-Based Resources - Guide to Potential NERC CIP Impacts of Upcoming Regulatory Changes
By terri khalil
Part 1
Upcoming NERC regulatory changes are expected to result in a significant increase in registrations of inverter-based resources, resulting in the likelihood of control centers to be categorized as North American Electrical Reliability Corporation (NERC) Critical Infrastructure Protection (CIP) Medium-Impact Control Centers and/or Low-Impact Control Centers and correspondingly to meet the relevant NERC CIP requirements. Keep reading for more information about the upcoming NERC regulatory changes related to inverter-based resources (IBRs), the reasons for the changes, and how this will likely impact CIP compliance.
What is an Inverter-Based Resource?
The term Inverter-Based Resource (IBR) generally includes all generation resources that connect to the electric power system using power electronic devices that change direct current (DC) power produced by a resource to alternating current (AC) power compatible with distribution and transmission grids. IBRs may refer to solar photovoltaic (PV), wind, fuel cell, and battery storage resources.[1]
What incidents and activities led to the need for the regulatory changes?
Several activities have been going on over the last couple of years related to inverter-based resources, including disturbance reports, task force, working group, technical committees, white papers, technical reports, modeling studies, as well as NERC alerts to address the findings of these activities. Below is a super high-level overview to bring you up to speed on the issues leading to the regulatory changes.
The electric industry is experiencing a rapid change in the generation resource mix as well as differences in disturbance handling for IBRs.
According to the Federal Energy Regulatory Commission (FERC), the generation resource mix is rapidly changing with an "unprecedented proportion of nonsynchronous resources projected over the next decade, including many that employ inverters and converters to provide energy to the Bulk Power System (BPS)". According to NERC, the rapid integration of IBRs is the most significant driver of grid transformation on the BPS. While IBRs can produce real and reactive power, they do not react to disturbances on the BPS the same way as synchronous generation resources. Briefly, under certain conditions some IBRs cease to provide power to the Bulk-Power System due to how they are configured and programmed even though some models and simulations predict that IBRs maintain real power output and provide voltage and frequency support per the NERC Protection and Control (PRC) standards.[2]
The nature of IBRs is more dispersed and is typically smaller megawatt facilities while at the same time having a significant impact in aggregate.
Due to the nature of IBRs being more dispersed and while typically smaller facilities, aggregate failures in response to a single fault are a risk since the impact is not restricted by the size of one facility or individual balancing authority area by the number of IBRs or percent of IBR generation within an interconnection. In areas of high IBR percentage of generation, the aggregate risk may have an impact much greater than the most severe single contingency of a balancing authority area which could then adversely impact other balancing authority areas.[3]
Guidance has not been fully or consistently implemented
Generally, IBRs can be configured to appropriately respond to disturbances however these configurations have not been widely implemented.
To address the concerns that the Reliability Standards may not provide planners and operators with the tools to plan and reliably integrate IBRs into the Bulk Power System and performance requirements to operate in a predictable and reliable manner, FERC issued a Notice of Proposed Rulemaking (NOPR) for "Reliability Standards to Address Inverter-Based Resources" in November, 2022.[4] Concurrently, an Order for "Registration of Inverter-Based Resources" was issued to address reliability concerns regarding unregistered IBRs that may have a material impact on reliability in aggregate.[5]
NERC IBR Workplan
In the Order, FERC directed NERC to submit a workplan detailing how it plans to identify and register owners and operators of inverter-based resources connected to the BPS which do not meet the BES definition. The registration focuses on "unregistered" inverter-based resources that have an aggregate, material impact on reliable operation of the BPS.[6] The workplan submitted by NERC and approved by FERC on 5/18/2023, will address the associated reliability gaps: (1) data sharing; (2) model validation; (3) planning and operational studies; and (4) performance requirements. Note also that several mitigations to the risks have been published in the form of disturbance reports, alerts, technical paper, reliability guidelines, and the IBR strategy as mentioned in the NOPR.
The Big Change
NERC proposes to revise its Rules of Procedure and Registry Criteria to create two new registered functions: Generation Owner-Inverter-Based Resources (GO-IBR), and Generation Operator-Inverter-Based Resources (GOP-IBR). The initial considerations consisted of IBRs that (1) have aggregate nameplate capacity of less than or equal to 75 MVA and greater than or equal to 20 MVA interconnected at a voltage greater than or equal to 100 kV and (2) have aggregate nameplate capacity of greater than or equal to 20 MVA interconnected at a voltage less than 100 kV. NERC’s workplan states that by registering GO-IBR/GOP-IBR entities under the proposed approach, it would result in approximately 98% of Bulk-Power System-connected IBRs being subject to applicable NERC Reliability Standards.[7] In the recent NERC Inverter-Based Resource Workplan Update, with feedback from stakeholders, the current draft Rule of Procedure (ROP) revision “will include clarifying language that builds upon the earlier filed Work Plan parameters to specify that GO-IBR and GOP-IBR capacity must aggregate “at a common point of connection” at greater than or equal to 60 kV”; this change still results in 97.5% of the unregistered IBRs to be subject to registration and compliance.[8]
NERC is further evaluating whether a change to the Bulk Electric System (BES) definition is needed.[9]
As a consequence of changing the registration criteria and bringing more assets into scope to meet NERC reliability standards, there is a possibility that the Critical Infrastructure Protection (CIP) standards may also be required. The additional sites will most likely be categorized as Low, which could then bring more control centers (Medium and Low) into scope for CIP.
Timing
The Commission approved NERC’s work plan on May 18, 2023. Within 12 months of this date (May 2024), NERC will revise its Registration Program (and a draft for comment is expected to be released early this month (September 2023). Within 24 months (May 2025), NERC will identify GO-IBR candidates for registration that meet the updated Registry Criteria, and also define the approach for implementation of the new registrations and applicable Reliability Standards, including a possible subset list of Standards, as well as providing communications and conducting workshops. Finally, within 36 months NERC will register the candidates, including training and informational packages.
An implementation plan for the relevant reliability standards is likely to be written in the latter portion of 2024 so while we do have some time - as you'll see as you read further below, if new registrations result in a need for you to declare a new Medium Impact Control Center, you'll want to add this to your long-term budget forecast and start drafting a budget. A key comment in the request for approval of the workplan is on page 6, "The Electrical Reliability Organization (ERO) Enterprise is also considering application of a subset list of Reliability Standards to GO-IBR, and looks forward to working with stakeholders to enlarge upon the concepts herein." [10]
In addition, there is always a possibility that a level 3 NERC Alert may be under consideration. A level 3 alert, if issued, may give us an early view of potential new reliability standards. If a Level 3 NERC Alert were issued, it is considered "Essential Action" and identifies actions deemed to be “essential” to bulk power system reliability and requires NERC Board of Trustees' approval prior to issuance. Like recommendations, essential actions also require recipients to respond as defined in the alert.[11]
How Do You Know if You Are in Scope?
You can utilize your CIP-002 processes to estimate what will be in scope. In addition, to identify candidate registrants, the ERO will be reaching out with requests for information which will help keep your IBR sites top of mind.
Let's say you have a several inverter-based resources that currently do not meet the BES definition nor the criteria in CIP-002.
Review the BES Definition
First, you'll want to start with the Bulk Electric System (BES) definition, especially Inclusion 2 and Inclusion 4 and then reference also the Order on Docket RD22-4-000 regarding "Registration of Inverter-Based Resources", paragraphs 16-19, which explain Inclusion 2 and 4, and recognition of operational importance of certain elements of the BES and FERC capability and authority to designate an entity to register elements that have been demonstrated to have a material impact upon reliability using a materiality test as per the NERC Rules of Procedure Appendix 5B and as led by a NERC-led registration review panel.
With the upcoming registry changes, it is very possible that some, or all, of your IBR's will meet the new criteria to be registered assets. You'll want to meet with your IBR engineers to review your current situation as well as any in progress and/or planned construction. Assuming that the new GO-IBR and GOP-IBR are included with other Generator Operator/Owner in the BES Definition and/or the CIP Standards Applicability regarding Functional Entities is updated to include GO-IBR/GOP/IBR, there are several possibilities impacting your CIP program, or, if you don't currently have a CIP program - that will require you to develop one.
Again, there is a statement in the NERC workplan that potentially only a subset of the requirements would need to be met. To prepare you in case that doesn't happen as well as for your visibility and the need to pay close attention to the progression of any requests for comment on this topic, the below is a scenario where all current reliability standards would need to be met (we're focusing only on the CIP standards in this article). Note that the proposed approach would result in approximately 97-98% BPS-connected IBRs being subject to applicable NERC Reliability Standards, per the Attachment 2 in NERC’s request for approval of the IBR work plan which is a white paper from February 2023: “Analysis of the Changing Mix of Generating Resources on the BPS: ERO Enterprise BPS Resource Trends Task Force White Paper”.[12]
Identify any new Low-Impact Sites
Your inverter-based resource assets, such as solar or wind generation, that meet the new criteria (described above in the section, “The Big Change”) likely have BES Cyber Systems that would then need to be categorized as Low Impact; reference CIP-002-5.1a and associated Attachment 1. Once you know an asset (such as a solar generation site or wind farm) and its associated BES Cyber Systems are a Low Impact, then that site needs to meet all the CIP requirements for a Low, which are conveniently located within the CIP-003 standard (this list references CIP-003-8), paraphrased for brevity - please see the currently enforceable standards for the details:
R1 Part 1.2 policies and associated CIP Senior Manager approval at least once every 15 months for Cyber Security Awareness, Physical Security Controls, Electronic Access Controls, Cyber Security Incident Response, Transient Cyber Asset and Removable Media Malicious Code Risk Mitigation and Declaring and Responding to CIP Exceptional Circumstances
R2 Cyber Security Plans as outlined in Attachment 1 Requirements 1-5): Cyber Security Awareness, Physical Security Controls, Electronic Access Controls, Cyber Security Incident Response, Transient Cyber Asset and Removable Media Malicious Code Risk Mitigation
R3 CIP Senior Manager designation by name and date
R4 CIP Senior Manager delegations by name, date of delegation, specific actions to be delegated, and approval by the CIP Senior Manager
Identify any Control Center Impacts
Next, you need to ask - is a control center also involved? Per the NERC Glossary of Terms, a Control Center (based on the definition's 7/1/2016 effective date) is: "One or more facilities hosting operating personnel that monitor and control the Bulk Electric System (BES) in real-time to perform the reliability tasks, including their associated data centers, of: 1) a Reliability Coordinator, 2) a Balancing Authority, 3) a Transmission Operator for transmission Facilities at two or more locations, or 4) a Generator Operator for generation Facilities at two or more locations."[13]
Once you know that yes, you now have a control center involved, you'll need to determine whether you meet the criteria for a Low-Impact Control Center or a Medium-Impact Control Center. Currently, for Medium Impact Rating per CIP-002-5.1a Attachment 1, the requirement parts related to a Medium Control Center state:
2.11. Each Control Center or backup Control Center, not already included in High Impact Rating (H) above, used to perform the functional obligations of the Generator Operator for an aggregate highest rated net Real Power capability of the preceding 12 calendar months equal to or exceeding 1500 MW in a single Interconnection.
2.12. Each Control Center or backup Control Center used to perform the functional obligations of the Transmission Operator not included in High Impact Rating (H), above.
2.13. Each Control Center or backup Control Center, not already included in High Impact Rating (H) above, used to perform the functional obligations of the Balancing Authority for generation equal to or greater than an aggregate of 1500 MW in a single Interconnection.
You'll need to calculate the MW equivalent for your IBRs and run through your CIP-002 process(es). If your control center doesn't meet the Medium Impact Rating criteria, then it would be a Low Impact Control Center.
Note that it is possible that with the upcoming registration criteria changes, updates may be made to the definitions/terms, applicability, standards, and/or other procedures to include the new, proposed GO-IBR (Generator Operator-Inverter Based Resources) function or add a statement somewhere that GO-IBR is a subset of GO (if it is), or elsewhere stating which requirements it needs to meet. Depending upon that, if you control 2 or more sites from a single control center, you might have a Low Control Center (in which case, you'll need to meet all the Low requirements as mentioned above for Low Assets), and accordingly if you control 1500 MW or greater, in total (with any other assets and BES Cyber Systems in the same control center) then you would be in scope as a Medium Control Center.
Sometimes people ask, well, how many IBR sites does it take to meet the MW criteria for a Medium Control Center? If you were designing each site at just under a 75 MVA (usually similar to MW in most cases) threshold, then maybe around 20 sites. However, your situation likely includes sites that each produce different MW thresholds so you cannot rely on only a "20 sites or more" approach; therefore, as you already do, you need to keep a pulse on the planning and construction projects in your company.
If the minimum to meet BES criteria does indeed become 20 MVA, yes it will take quite a few sites to get you there but let's say most of yours are 20 MVA then you have a couple of whopper sites that get you past 1500 MW quickly. You need to monitor this and plan ahead, especially if you don't already have a control center in scope for NERC CIP. If you are going to have a Medium Control Center - you need time to figure out 1) what that means in your environment, 2) what controls, technology and evidence you can leverage, 3) what technology you might have to purchase, 4) what processes you need to create, 5) who you need to argue and collaborate with, 6) create implementation plans, and 7) set up a project.
Coming soon in Part 2… We’ll dive into what types of considerations you may have for a Medium Impact Control Center.
TL;DR
NERC Registry Criteria regulations for Inverter-Based Resources to change by 2025.
Registrations to occur by May 2026.
CIP Impact
More requirements to meet
Timing TBD
Additional Low generation sites and additional Medium and Low Impact Control Centers
Review your scenarios with new criteria in mind and consider the most restrictive scenario and determine:
What that means in your environment
What controls, technology and evidence you can leverage
What technology you might have to purchase
What processes you need to create
Who you need to argue and collaborate with
Create implementation plans
Set up a project
Footnotes
[1] NERC, IBR Registration Work Plan_final.pdf (nerc.com), 15 Feb 2023, https://www.nerc.com/FilingsOrders/us/NERC%20Filings%20to%20FERC%20DL/IBR%20Registration%20Work%20Plan_final.pdf.
[2] NERC, “About Alerts”, referenced 25 Aug 2023, https://www.nerc.com/pa/rrm/bpsa/Pages/About-Alerts.aspx
[3] NERC, NERC, IBR Registration Work Plan_final.pdf (nerc.com), 15 Feb 2023, https://www.nerc.com/FilingsOrders/us/NERC%20Filings%20to%20FERC%20DL/IBR%20Registration%20Work%20Plan_final.pdf.
[4] FERC NOPR RM22-12-000, p. 14, paragraph 13; NERC, 2020 Long Term Reliability Assessment Report, Dec. 2020, NERC_LTRA_2020.pdf, https://www.nerc.com/pa/RAPA/ra/Reliability%20Assessments%20DL/NERC_LTRA_2020.pdf, p. 9; and NERC, Inverter-Based Resource Strategy: Ensuring Reliability of the Bulk Power System with Increased Levels of BPS-Connected IBRs, Sept. 2022, https://www.nerc.com/comm/Documents/NERC_IBR_Strategy.pdf, p. 1.
[5] FERC NOPR RM22-12-000, p. 15, paragraph 14.
[6] FERC NOPR RM22-12-000, p. 6 paragraph 5;
[7] FERC, “Order on Registration of Inverter-Based Resources", 17 Nov 2022, https://elibrary.ferc.gov/eLibrary/filelist?accession_number=20221117-3113&optimized=false, p. 2.
[8] Quick Reference Guide: Inverter-Based Resource Activities, March 2023, p. 12.
[9]FERC, E-1 RD22-4-001 | Federal Energy Regulatory Commission (ferc.gov), 18 May 2023, https://www.ferc.gov/media/e-1-rd22-4-001; NERC, IBR Registration Work Plan_final.pdf (nerc.com), 15 Feb 2023, https://www.nerc.com/FilingsOrders/us/NERC%20Filings%20to%20FERC%20DL/IBR%20Registration%20Work%20Plan_final.pdf.
[10]NERC, NERC August Work Plan Filing Update, August Work Plan Filing Update.pdf (nerc.com), https://www.nerc.com/FilingsOrders/us/NERC%20Filings%20to%20FERC%20DL/August%20Work%20Plan%20Filing%20Update.pdf, 16 August 2023, p. 5.
[11] NERC, IBR Registration Work Plan_final.pdf (nerc.com), 15 Feb 2023, https://www.nerc.com/FilingsOrders/us/NERC%20Filings%20to%20FERC%20DL/IBR%20Registration%20Work%20Plan_final.pdf.
[12] "FERC Notice of Proposed Rulemaking (NOPR) RM22-12-000 20221117-3114 Reliability Standards to Address Inverter-Based Resources." Federal Energy Regulatory Commission (FERC) Website, 17 Nov. 2022, https://elibrary.ferc.gov/eLibrary/filelist?accession_number=20221117-3114&optimized=false, p. 5; NERC, Inverter-Based Resource Performance and Analysis Technical Workshop, Feb 2019, https://www.nerc.com/comm/PC/IRPTF%20Workshops/IRPTF_Workshop_Presentations.pdf, p. 29 (slide 2 of Fundamental Inverter Controls presentation).
[13] NERC, “NERC Glossary_of_Terms”, https://www.nerc.com/pa/Stand/Glossary%20of%20Terms/Glossary_of_Terms.pdf.
