Dispatchable Interties Rule Changes and Implementation Details Kevin Dawson January 10, 2013

Dispatchable Interties
Rule Changes and Implementation Details
January 10, 2013
Kevin Dawson
Senior Program Manager, Interties
Agenda
1. Background
2. Overview of Rule and Definition Changes
3. Dynamic Scheduling and the Dynamic Scheduling System
4. Requirements
5. Dispatch Instructions and Export Transaction Example
6. Dispatchable Interties, Scheduling and Curtailment
7. Q & A
2
Background
• Intertie transactions currently required to be price takers.
– Schedules fixed for the hour
– Not dispatchable in real-time
• Several policy references support allowing imports and exports to submit
priced bids/offers.
– Facilitate competition by reducing barriers while maintaining
reliability. (sections 16, 17 and 29 of the EUA)
– Intertie market design should support a level playing field for
generation, imports, exports and load where possible. (sections 6 and
18 of the EUA and the Electricity Policy Framework)
– Support system dispatch through the energy market merit order.
(sections 17 and 18 of the EUA)
• Allowing pool participants the ability to price their intertie transactions
should result in:
– Improved price fidelity because of fewer price taking energy blocks
– Reduced price risk for marketers
– Greater consistency between generators and imports/exports
3
Background Continued
• On May 7, 2010, the AESO issued the Intertie Framework
Discussion Paper, setting out options to allow imports and
exports to become dispatchable in real-time.
• On October 7, 2010, the AESO issued the Intertie
Framework Recommendation Paper. This paper identified
the use of dynamic scheduling as the preferred option to
allow imports and exports to become dispatchable in realtime.
– Responses to comments received regarding real-time dispatch
will be issued by the end of January.
– Given this, the deadline for providing comments regarding
dispatchable intertie rule changes is moved to February 15.
4
Overview of Rule and Definition Changes
• Will provide option to submit offers/bids under fixed price,
non-dispatchable mode (current state) or variable price,
dispatchable mode (future state).
• Rule and definition consultation begun on Nov. 29, 2012.
Comments due Feb. 15, 2013.
• Accompanying ID# 2012-029R also issued.
• Filing expected in April or May 2013 with implementation in
October 2013.
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Definition and Rule Changes
• New definitions:
– fixed price export / fixed price import
– variable price export / variable price import
• Amendments to existing definitions:
– pool asset, sink asset, source asset
Affected rules:
ISO Rules Section 201.5 Block Allocation
– Variable price imports and variable price exports to receive
seven operating blocks.
– Fixed price imports and fixed price exports continue to receive
one operating block only with set prices of $0/MWh and
$999.99/MWh respectively.
6
Definition and Rule Changes
Affected rules continued:
ISO Rules Section 201.6 Pricing
–
Variable import and variable export assets to set system
marginal price as do intra-Alberta sink and source assets.
–
Fixed import and fixed export assets will continue to be
ineligible to set system marginal price.
ISO Rules Section 203.1 Offers and Bids for Energy
– Variable price imports will be required to price their offers
above $0/MWh and below $1000/MWh.
– Variable price exports will be required to price their bids at or
above $0/MWh and below $999.99/MWh.
Note: This rule is the result of implementation restrictions with
respect to tag curtailment software.
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Dispatchable Interties and Dynamic
Scheduling
• Dynamic Schedules
– Allow the intertie energy exchange to continuously change
through the hour rather than remain a constant MW volume for
the entire settlement period.
– Historically only point-to-point long-term dynamic transactions
were practical.
• Dynamic Scheduling System (DSS)
– A Western Electricity Coordinating Council (WECC) wide
initiative.
– Simplifies the management of dynamic intertie transactions.
– Provides a real-time communication infrastructure and
standard process for managing dynamic schedules over the
interties.
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How the AESO will use the DSS
• The AESO will send the dispatch level of a dispatchable intertie
asset to the DSS
• determined by energy market merit order
• The DSS will adjust individual schedules based on the merit order
dispatch
• not by production variability
• The DSS ensures the changes in schedule volume resulting from
energy market dispatch are reflected in the e-tag by correcting the
integrated MWh quantity after the end of the settlement period for
the purposes of energy settlement.
• There is no direct participant interaction with the DSS
• However…
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Administrative Requirements – Variable
Price Assets
There are additional restrictions and requirements with respect
to pool asset requests and e-tagging
• Variable price Asset requests
– Current intertie trading assets will remain fixed price assets
– May request 1 variable price import and 1 variable price export
asset per intertie
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Administrative Requirements – e-tagging
New fields required for DSS e-tagging:
• Once you have successfully registered for a variable price
intertie asset the AESO will provide the parameters (or range
of acceptable values) for each field on the e-tagging form.
• Submitted tags will go through an automated e-tag validation
process before acceptance by the System Controller.
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Additional Requirements and Limitations
You may only source from or sink to Balancing Authorities
(BAs) who have also enabled the DSS. The following BAs
are part of the DSS initiative but are at various stages of
implementation:
– AESO
– PacifiCorp
– Arizona Public Service
– Portland General
– BC Hydro
– Public Service of New Mexico
– BPA
– Puget Sound Energy
– Grant County PUD
– Seattle City Light
– Idaho Power
– Tri-State G&T
– Imperial Irrigation District
– WAPA
– NaturEner, USA
– Xcel Energy
– Northwestern Energy
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Additional Requirements and Limitations
• Prior to any dispatchable intertie transaction:
– The source BA must issue a “VL” code for use on your e-tag.
– The sink BA must issue a “VG” code for use on the e-tag.
• Dynamic transfer limits
– Must ensure that transmission is available along entire path.
• Energy Market dispatches will come through the ADAMS
system
– Variable price imports/exports will be consistent with treatment
of other assets.
– Fixed price imports/exports treated same as today (confirm
through ADAMS).
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Dispatch Instructions
– Variable price import dispatch instructions will take the form of
change in production
• Energy will flow to AB through coordinated change in schedules
between source and sink BAs.
• Participant responsible to coordinate with source BA to
understand source of energy and associated dispatch
coordination.
– Variable price export dispatch instructions will take the form of
change in consumption
• The MW indicated in the dispatch instruction will not be the
expected new level of consumption.
• Rather, a pool participant is required to reduce the volume of an
export by the amount indicated in the dispatch instruction.
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Typical DSS Export Transaction Example
Export Bid for HE10
Block
Number
Price
MW
Block
Volume
0
$800.00
20
20
1
$300.00
40
20
2
$200.00
60
20
3
$50.00
80
20
4
$30.00
100
20
5
$20.00
120
20
6
$10.00
140
20
• @ 9:00, SMP is $22.00/MWh,
• The AESO will issue a dispatch of 40
MW (the sum of the block volumes for
blocks 5 and 6).
• The export volume is now 100 MW.
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Export Example Cont’d
Export Bid for HE10
Block
Number
Price
MW
Block
Volume
0
$800.00
20
20
1
$300.00
40
20
2
$200.00
60
20
3
$50.00
80
20
4
$30.00
100
20
5
$20.00
120
20
6
$10.00
140
20
• @ 9:13, SMP has increased to $45/MWh.
• The AESO will issue a dispatch of 60 MW
indicating that the export will be
decreased by a further 20 MW, 60 MW
less than the full bid of 140 MW.
• The export volume is now 80 MW.
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Export Example Cont’d
Export Bid for HE10
Block
Number
Price
MW
Block
Volume
0
$800.00
20
20
1
$300.00
40
20
2
$200.00
60
20
3
$50.00
80
20
4
$30.00
100
20
5
$20.00
120
20
6
$10.00
140
20
• @ 9:45, SMP spikes to $900/MWh.
• The entire bid is out of merit.
• The AESO will issue a dispatch of 140
MW.
• The export volume is now 0 MW.
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Dispatchable Interties, Scheduling &
Curtailment
• Scheduling will continue to allow for consideration of transmission
priority business practices in adjacent jurisdictions.
• Dispatchable Intertie transactions (variable price) will receive the
same scheduling treatment from the AESO as non-dispatchable
(fixed price) transactions.
– Ex. Non-firm BC Tx priced lower than Firm BC Tx will not
receive AB scheduling priority.
• EXCEPT
– Under the proposed ATC allocation rule, if curtailments are
required at or after T-15, transactions will be curtailed in
reverse merit order.
– By comparison, under current rules curtailments at T-15 would
be conducted LIFO based on e-tag timing regardless of
firmness or price.
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Questions?
[email protected]
403-539-2623