Power Markets People Market Policy Framework

Market Policy Framework
Implementation
“Quick Hits”
Reliable Power
Reliable Markets
Reliable People
Background
Reliable Power
Reliable Markets
Reliable People
Why “Quick Hits”?
• On June 6, 2005 the Alberta Department of Energy (DOE)
released a policy documenting their recommendations for
refinements to the current framework for the Alberta
wholesale electricity market, focusing on addressing shortterm and long-term adequacy of supply and other interrelated wholesale market issues.
• “Quick Hits” were identified as areas of the policy that could
be implemented in a reasonable amount of time, having an
immediate effect on either the visibility of available supply, or
the credibility, stability, or undue volatility of the pool price
3
Main “Quick Hit” Changes to
Market Operations
• The following four areas were identified for “Quick Hits”
• Merit Order Stabilizers
• Payments to Suppliers on the Margin
• Treatment of Imports/Exports
• Reconstitution of Pool Price for TMR Energy
4
What you will learn today…
• This session will cover relevant participant changes in the ETS and
in ADaMS.
• Must offer/Maximum Capability
• Available Capability and Acceptable Operational Reasons (AOR)
• Energy Restatements for AOR
• Price Restatements/ T-2
• Process for long lead time energy
• Imports/Exports
• Payments to generators on the margin
• Purpose of Dispatch Down Service
• Purpose of TMR Reference Price
• Use of Dispatch Down Service and Reference Price in dispatching
the Energy Market Merit Order
5
Merit Order Stabilizers
• Offers and Bids
• Restatements
• Outage Scheduling
• Dispatch of Long Lead Time Energy
• Short Term Adequacy Assessment
6
Must Offer
Maximum Capability
Available Capability
Acceptable Operational Reason
Must Offer/ Maximum Capability
• Generating Assets and imports must offer their Maximum
Capability
• Maximum capability for generating assets means the
maximum quantity (MW) that the generating asset is
physically capable of providing under optimal operating
conditions for that asset while complying with all applicable
ISO rules and terms and conditions of the ISO tariff.
• Maximum capability for imports it is the available capability
8
Must Offer/ Maximum Capability
• Where can maximum capability be found?
At the bottom right corner of the energy market
submission/restatement page in the ETS.
• How is the maximum capability changed?
Only the AESO can change this value
• Maximum capability is a static number, should only
change if there is a physical change to the unit, i.e.
upgrade
9
Must Offer/ Maximum Capability
Price restatement area
10
Must Offer/Available Capability
• Available capability (AC) means:
• For a generating asset the maximum quantity (MW) that the
generating asset is physically capable of providing during each
settlement interval of the trading day
• For an import source asset, the maximum quantity (MW) that the
importer is prepared to provide during each settlement interval of
the trading day
• For an export sink asset, the maximum quantity (MW) that the
exporter is prepared to consume during each settlement interval of
the trading day
• For a bid, the maximum quantity (MW), after accounting for any
restatements to the asset’s availability to which the asset may
receive an energy market dispatch in real time
11
Must Offer/Available Capability
• All source assets will have their available capability set
to the maximum capability of the asset as per the value
in the ETS
• All source assets must offer all of their available
capability unless they have an acceptable operational
reason
• The acceptable operational reason must be provided
with the restatement
12
Must Offer/Acceptable Operational
Reason
• A circumstance … which if it operated could reasonably be
expected to affect the safety of the generating asset, the
environment, personnel working at the generating asset or
the public
• Re-positioning an asset …due to the need to meet a
dispatch…to serve the stand-by ancillary service market
• Re-position…to manage physical or operational constraints
(includes constraints associated with interconnections)
• Force majeure
• Exempt energy (solely produced & consumed on site)
13
Offers, Bids and Restatements
Offers
Old Offer Structure
New Offer Structure
-Offer might not equal maximum
capability
-Offer must equal maximum
capability
-TDE submitted separate from
the offer
-Available Capability submitted as
part of the offer
-Outage Scheduling in TDE
section of the ETS for all periods
-Outage Scheduling for the
forecast scheduling period
happens through the offer
-TDE/ SSE no longer applies
15
Offers cont…
•
Two parts to the offer:
1. Must offer component Maximum Capability
(pricing of all of these MW)
2. Available Capability Declaration where it is
not equal to the Maximum Capability
16
Mandatory Energy Restatements (a)
• ISO Rules 3.5.3.2 a)
• Changing the level of available capability of an asset
for an acceptable operational reason.
• This may occur at any time during the trading day.
$/MWh
MW
$/MWh
MW
$/MWh
MW
999.99
400
999.99
400
999.99
400
500
350
500
350
500
350
250
225
250
225
250
225
100
175
100
175
100
175
50
150
50
150
50
150
10
120
10
120
10
120
0
100
0
100
0
100
300MW
340MW
170MW
Maximum Capability remains at 400 MW regardless of the restatement
17
Mandatory Energy Restatements (a)
• Energy Restatements require an “AOR” per ISO Rule 3.5.3.2
Acknowledgment message
18
Mandatory Energy Restatements
(b)
• Energy Restatement ISO Rule 3.5.3.2b
• New version of Old “Locking Restatement”
• Cannot be used for economic reasons, require an
acceptable AOR
• A participant must submit a revised offer re-distributing the
quantity (MW) within the offer blocks if
a) the asset cannot comply with the current offer
b) a price restatement can no longer be used
c) an energy restatement under a) does not represent the
asset’s operating state. (i.e. cannot simply restate the
available capability)
• No limit on the number per day
19
Mandatory Energy Restatements (b)
• Current time is 8:33
20
Voluntary Price Restatements
• ISO Rules 3.5.3.3
• Price Restatement: Changing the price and/or the quantity (MW) of an
operating block of the asset.
• This may only occur prior to two hours before the start of the settlement
interval
$/MWh
MW
$/MWh
MW
999.99
400
999.99
400
500
350
500
300
250
225
250
225
100
175
100
176
50
150
75.50
175
10
120
10
150
0
100
0
120
Maximum Capability remains at 400 MW regardless of the restatement
21
Restatements
Energy
restatem
Area (a)
Price restatement area
and Energy restatement area (b)
22
Application of Restatement of AC to
the Merit Order
$/MWh
MW
999.99
400
500
350
250
225
100
175
50
150
10
120
0
100
This portion of the offer WILL NOT
appear on the Energy Market Merit
Order
Available Capability = 325 MW
This portion of the offer
appears on the Energy
Market Merit Order
Maximum Capability = 400
23
Implementation of Offers
• AESO will implement changes in manner prescribed
• “When a generating asset has been issued both an ancillary
service dispatch and an energy market dispatch for the
same period, the ISO will deduct the quantity of MW in such
ancillary service dispatch from the available capability of
such asset for the purposes of determining the quantity of
MW of the energy market dispatch.”
• Participant will no longer be required to restate energy for
AS
• AESO will auto-adjust and re-dispatch energy to correct
level
24
Implementation of Offers
Example:
Maximum Capability = 400MW
SR Dispatch Level = 50MW
SUPG Dispatch Level = 25MW
Available Capability = 300MW
Therefore, Maximum Energy Dispatch Level = 225MW
25
Bids
• Same application of restatements as offers
• Intra-Alberta load may restate for any reason, however if
they are not going to comply with their bid, they must restate
26
Rule 3.7 Standing Offers and Bids
• Must offer obligation impacts
• Standing offer/bid is the default
• AC will default to the submitted outage schedule
• Move bid default provision of rule 3.9 to rule 3.7
27
Outage Scheduling
• As per the ISO Operating Policies and Procedures, available
capability will be used for the purposes of outage scheduling.
• For the duration of the forecast scheduling period (< 7 days),
all available capability information must be entered through
the Energy Submission section of the ETS.
• For all periods past the forecast scheduling period (> 7days),
all available capability information must be entered through
the Outage Scheduling section of the ETS.
28
Long Lead Time Energy
Dispatch of Long Lead Time Energy
• All pool participants must submit operating
constraints for each generation asset including the
Initial Start-up time (hr). (Rule 3.5.3.4)
• Initial Start-up time reflects, in hours, the time
required by the generating asset to synchronize to
the AIES from its off-line state.
• As per ISO Rule 5.1, the AESO will make use of
this information for the purpose of determining
supply adequacy.
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Long Lead Time Energy Dispatch
May submit
start time
May withdraw
start time
9:00 am
Must comply
3:00 pm
5:00 pm
T-2
T
• Generator Initial Start-up time: 8 hours (cold start)
– Submitted in ETS
– Provision for warm or hot starts prior to T-2
• Start time: 5:00 pm
– Submitted in ADaMS
31
Dispatch of Long Lead Time Energy
32
Dispatch of Long Lead Time Energy
cont…
33
Dispatch of Long Lead Time Energy
cont…
• ISO Rule 6.3.5 requires that pool participants, with a lead
time greater than 1 hour, declare to the AESO the time of
day at which they intend to be synchronized to the AIES.
• Participants must submit a start time that reflects the physical
condition of the generating asset, and must ‘make sense’
given the initial start up time constraint that they have
submitted to us
• Participants with an Initial Start-up time less than 2 hours
must submit a start time at least two hours prior to the start of
the settlement interval.
• Participants may withdraw a start time no later than two
hours prior to the start of the settlement interval.
34
Dispatch of Long Lead Time Energy
cont…
For example:
-The current time is 13:05.
-Gen 1 has an 4 hour initial start-up time.
-ETS Initial Start-up Time: 4 hours
Essentially, Gen 1 energy offer would be filtered out of the
real-time energy merit order and the STA Assessment until
they give the AESO their intention to start.
-Intention to start: If Gen 1 intends to come on line at 17:05,
they would enter at a start-up time record at or before 13:05.
(at least 4 hours prior to when they expect to come online)
-Gen 1 would log into ADaMS at 13:05 and enter a Start time of
17:05.
-Gen 1 energy would appear in the energy market merit order
at 17:05.
-In merit energy for Gen 1 would be dispatched at 17:05.
35
5.0 – Adequacy and Price Forecasting
• Providing forecast daily and weekly adequacy assessments
• Providing short term forecast system marginal prices
• Move rule 5.4 Equal Price Offers or Bids from Scheduling to
Dispatching Rules (Rule 6.3.4)
36
Short Term Adequacy Assessment
• ISO Rule 5.1 “An adequacy assessment will be prepared by the ISO for each settlement
interval for the trading day and for the 6 remaining days of the forecast scheduling
period on the day preceding that trading day.”
• Updates: every 5 Min for current day; every hour for the 6 remaining days
37
6.6 Pool Participant Non-Compliance…
• Must comply rules
• Will be considered in non-compliance when dispatch is
declined
• Tolerance levels remain unchanged
• Compliance Rules (Rule 12) continues to apply
38
Imports/Exports
Treatment of Imports/Exports
• “Must comply”
• Importers & Exporters are committed to volumes by T-2
• Inability to procure transmission is an acceptable operational
reason
– If total imports in merit order is less than ATC, all should
submit e-tags or they are in non-compliance
– If total imports in merit order is greater than ATC, expect
tie-line to be full
• Dispatch process should remain relatively unchanged
compared to today
• Not able to set pool price
40
Addressing the Impacts of TMR
Transmission Must Run (TMR)
• means a generator is constrained on to operate at a
minimum specified MW output level in order to
maintain system security
42
Impact of TMR Today
TMR Unit
100 MW $200
Gen 8
100 MW $77
Gen 7
75 MW $65
Gen 6
25 MW $50
Gen 5
75 MW $47
Gen 4
50 MW $45
Gen 3
25 MW $32
Gen 2
50 MW $28
• If TMR had not been
dispatched, then we would
“Unconstrained
have required additional
” price
energy dispatched in the
merit order
SMP
• If the price is artificially
depressed, then the correct
price signal is not being
sent to the market and may
delay generation investment
Gen 1
100 MW $20
43
Dispatch Down Service (DDS)
• Create market so that generators will offer a price to
voluntarily dispatch down
• Dispatch down the DDS by out of merit TMR amount, when
system marginal price is less or equal to the reference price.
• Reference price
• Cannot set SMP
• Calculated by 12.5 * Gas Price
• Costs allocated to suppliers (generators & imports) by
metered volumes “financial pro rata”
44
Dispatch Down Service (DDS)
• Not intended to compete with the energy market
• Provide an opportunity for a generator who is
dispatched down to recover opportunity costs
• Not a market intended to provide long term source
of funding for generators – should disappear with
elimination of transmission constraints
45
Conditions for DDS Dispatch
• SMP is less than or equal to the reference price
• Source asset has been issued a TMR dispatch or
directive
• TMR quantity is greater than constrained down
quantity
• E.g. if 300 MW is constrained down in KEG area, and
100 MW of TMR is dispatched, then no DDS is
dispatched
46
DDS Quantity Calculation
• DDS Quantity to be dispatched (MW) is the lesser
of:
• DDS (MW) = out of merit TMR – Constrained Down
• DDS cannot be less than zero
• Eligible DDS offer quantity
47
DDS Quantity Example
• 100 MW out of merit TMR in Rainbow Area
• 20 MW constrained down in Fort McMurray
• 70 MW of eligible DDS offered
DDS is the lesser of:
100 MW (TMR) – 20 MW (constrained down)
= 80 MW
Or 70 MW
48
Dispatch Example at Time T
TMR Unit
100 MW $200
Gen 8
100 MW $77
Gen 7
75 MW $65
Gen 6
25 MW $50
• TMR is not dispatched on
SMP
• Gen 2 and Gen 4 offer DDS
Gen 5
75 MW $47
Gen 4
50 MW $45
Gen 3
25 MW $32
Gen 2
50 MW $28
Gen 1
100 MW $20
49
Dispatch Example at Time T
TMR Unit
100 MW $200
• TMR is dispatched “on”
Gen 8
100 MW $77
Gen 7
75 MW $65
SMP
Gen 6
25 MW $50
Gen 5
75 MW $47
Gen 4
50 MW $45
Gen 3
25 MW $32
Gen 2
50 MW $28
Gen 1
100 MW $20
Today’s
Dispatch
Level
• 100 MW of “extra”
generation dispatched
• Rather than dispatching off
Gen 6 and Gen 7, the DDS
is dispatched down by 100
MW
• Gen 2 and Gen 4
dispatched down
50
Effect of Reference Price
• Reference price as “proxy”
for TMR
TMR Unit
100 MW $200
Gen 8
100 MW $77
Gen 7
75 MW $65
Gen 6
25 MW $50
Gen 5
75 MW $47
Gen 4
50 MW $45
Gen 3
25 MW $32
Gen 2
50 MW $28
Gen 1
100 MW $20
• Offers dispatched for TMR
face no dispatch risk in
energy market, since they
have an Ancillary Service
dispatch
Reference Price
SMP
Today’s
Dispatch
Level
• Without reference price,
TMR Unit pricing incentives
change, to affect price
without risk – effectively
market power mitigation
51
Dispatch Example at Time T+30min
• Load increases by 100 MW
TMR Unit
100 MW $200
Gen 8
100 MW $77
Gen 7
75 MW $65
Gen 6
25 MW $50
Gen 5
75 MW $47
Gen 4
50 MW $45
Gen 3
25 MW $32
Gen 2
50 MW $28
Gen 1
100 MW $20
• Last dispatched unit is Gen
7
Reference Price
SMP (Same
as today’s
dispatch
level)
• Next unit in merit order is
Gen 8
• Gen 8 is above reference
price
• Before dispatching units
above reference price, DDS
units are dispatched up
• Gen 2 and Gen 4
dispatched up
52
DDS Offers
• Any participant with a dispatchable source asset may offer
DDS
• One DDS block associated to each dispatchable source
asset (Rule 3.5.1 a))
• DDS block of a DDS offer must be flexible (Rule 3.5.5.1 d))
• Offers submitted any time prior to T-2 (Rule 3.5.2 d))
• DDS offer quantity must not be less than 10 MW (Rule
3.5.5.1 a))
• DDS offer must not exceed Available Capability minus
minimum stable generation (Rule 3.5.5.1 b), additional rules
on submitting DDS offers within 3.5.5.1)
• DDS offer price is equal to zero or a negative value (Rule
3.9 c))
53
DDS “New Submission”
54
Dispatching DDS (Rule 3.5.3.5 c) &
6.3.6.4)
• DDS Merit order is dispatched from lowest to highest DDS
price (taking into account the eligibility of the DDS offer)
• For every DDS dispatch:
• ISO will deduct the quantity from the Energy Market offer in
ascending order starting with the lowest priced block of the source
asset
• The asset will then receive a corresponding Energy Market dispatch
• DDS is not dispatched when the Pool Price is above the
Reference Price
55
Dispatching DDS (cont’d)
DDS Merit Order
DDS Offer Price
Source D
-5
MW
100
• SMP is $50
• If dispatched:
Source A paid 50+-60= 0
Source C
Source B
Source A
-20
20
-40
50
-60
40
Source B paid 50 +-40=$10
Source C paid 50 +-20=$30
Source D paid 50+-5=$45
56
Mandatory DDS Energy
Restatements (Rule 3.5.5.2)
• Within 2 hours before the start of any settlement interval
• Only for an Acceptable Operational Reason (AOR)
• Current Time: 7:30 am in example below
57
Voluntary DDS Price Restatements
(Rule 3.5.5.3)
•Only permitted prior to two hours before the start of any
settlement interval
•Restatement of price, quantity, or both
•Current Time: 7:40 am in example below
58
Implementation of Offers
(inclusion of DDS)
• When a source asset has been issued a DDS
dispatch, the ISO will deduct the quantity of MW in
such DDS dispatch from the in merit amount in the
source asset’s offer for the purposes of determining
the quantity of MW of the energy market dispatch.
The ISO will deduct such quantity from the offer in
ascending order starting with the lowest priced
block of such source asset
59
Implementation of offers (cont’d)
Example:
Maximum Capability = 400MW
Available Capability = 300MW
Current dispatch level in energy market = 200 MW
Minimum stable generation level = 100 MW
DDS offer = 50 MW
(max DDS offer participant can enter is 200 MW: 300-100)
Therefore the asset will be:
DDS dispatched on for 50 MW
Energy market dispatch for 150 MW
60
Real-time “Snapshot” of Adams
61
Dispatch compliance
• A market participant must comply with a DDS
dispatch
• If a participant does not comply with a DDS
Dispatch, the non-compliance will be flagged in the
energy market, therefore dispatch compliance is
monitored in the Energy Market, subject to ISO
Rules 6.6 and 12
62
DDS payment (Rule 8.1.3)
• DDS payment on dispatch
• DDS payment equals DDS price ($) x DDS quantity
(MW) x DDS time (min) divided by 60 minutes
• DDS Price is the system marginal price plus the
DDS offer price
63
DDS Charge (Rule 8.1.4)
• DDS charge allocated to all source assets
• A participant that has generated (generators &
imports) during a settlement interval will receive a
charge for DDS
• DDS charge calculated by: energy production
(MWh) divided by the sum of all energy production
(MWh) multiplied by the sum of all DDS payments
• DDS payment – Rule 8.1.3 (see previous slide)
64
Payments to Suppliers on the Margin
Payments to Suppliers on the margin
• Intent is to decrease the incentive for non-compliance with a
dispatch
• Often participants respond based on forecast pool price as
opposed to SMP
• If the participant believes the price will be lower than their
offer price, they may not immediately respond
• Guarantees that they will be paid their offer price for the time
that they are running
66
Payment to Suppliers on the Margin
• ISO Rule 8.1.2
• When a pool participant’s asset has been dispatched for a portion of
the settlement interval where their offer price is greater than pool price
for that settlement interval, they may qualify for an energy production
uplift payment.
• Pool Participants will receive the difference between their offer price
and the pool price for MWh produced from offer blocks dispatched
above pool price.
• ISO Rule 8.2.3
• Settlement charges for payments to suppliers on the margin will be
applied to all load based on their proportion of total load within the
settlement interval.
67
Payment to Suppliers on the
Margin cont…
• On a Monthly basis, payments and charges will be applied against the pool
participant’s invoice
68
New 8.1.2 Payment to Suppliers on
the Margin
• Alignment of Settlement & Dispatch
• Eligible to receive production uplift if:
– Operating block receives an energy market dispatch; and
– Offer price is greater than pool price; and
– Energy production (MWh) is greater than the sum of the dispatched
energy (MWh) of all blocks below such operating block
69
Eligibility
• Dispatched up to
$250/MWh during the hour
• Pool price = $150/MWh
• Meter Volumes = 187 MWh
– 187 MWh > 175 MWh
Gen A Offer
Block
$/MWh
MW
6
999.99
400
5
500
350
4
250
225
3
100
175
2
50
150
1
10
120
0
0
100
70
New 8.1.2 Payment to Suppliers on
the Margin
• If meter volumes are < the amount dispatched, then
they receive uplift for all the additional meter
volumes provided
• If meter volumes are > the amount dispatched, then
they receive uplift only up to the dispatched amount
71
Formula Definitions
A = energy production (MWh)
B = sum of dispatched energy from previously
dispatched blocks
C = dispatched energy of the eligible block
D = offer price
“dispatched energy” = minutes dispatched x volume
dispatched
72
Multiple Block Eligibility
Gen A Offer
Marginal Prices:
Block
$/MWh
MW
$55 for 50 minutes
6
999.99
400
$100 for 8 minutes
5
500
350
$250 for 2 minutes
4
250
225
Pool Price: $67.50
3
100
175
Dispatched Energy = 155.83
MWh
2
50
150
1
10
120
Meter Volumes: 155 MWh
0
0
100
Eligible
Not
Eligible
73
Multiple Block Eligibility
Gen A Offer
A = 155 MWh (Meter volumes)
$/MWh
MW
B = 154.17 MWh (Previous
block)
999.99
400
500
350
250
225
100
175
D = $250/MWh
50
150
Dispatch minutes: 2 min
10
120
Pool price: $67.50
0
100
C = 155.83 MWh (Dispatch
energy)
D
C
B
74
Rule 8.1.2 b) i)
• If (A minus B) is less than or equal to [(C minus B)
• (155 – 154.17) < (155.83 – 154.17)
• .83 < 1.66
• Metered volumes are within expected dispatch; calculation based on
actual metered volumes
• Then energy production uplift = (A minus B) multiplied by (D
minus pool price)
• Energy production uplift = (155 – 154.17) x ($250 – $67.50)
• Energy production uplift = $151.48
75
Multiple Block Eligibility
Gen A Offer
A = 155 MWh
$/MWh
MW
B = 150 MWh
999.99
400
500
350
250
225
100
175
50
150
10
120
0
100
C = 154.17 MWh
D = $100/MWh
Dispatch minutes:
8 min + 2 min = 10 min
Pool price: $67.50
D
C
B
76
Rule 8.1.2 b) ii)
• If (A minus B) is greater than [(C minus B)
• (155 – 150) > (154.17 – 150)
• 5 > 4.17
• Metered volumes are higher than expected dispatch; calculation
limited to dispatch
• Then energy production uplift = (C minus B) multiplied by (D
minus pool price)
Energy production uplift
= (154.17 – 150) x ($100 – $67.50)
Energy production uplift = $135.53
77
8.2.3 Settlement for Suppliers on
the Margin
• As per policy paper, allocated to energy
consumption in the hours it was paid
Energy production uplift share in $ = (sum of all
energy production uplifts) multiplied by the pool
participant’s energy consumption divided by sum of
all pool participant’s energy consumption
78
8.2.3 Settlement for Suppliers on
the Margin
Sum of Energy Production Uplift: $151.48 + $135.53
Pool Participant’s energy consumption: 100 MWh
Total energy consumption: 8000 MWh
Energy production uplift share charge
= $287.01 x 100 MWh / 8000 MWh
= $3.59
79
Implementation Plan
• Quick Hits Rules and System changes effective
Dec. 3, 2007
• Outage to systems in morning (10:15 am)
• Extension of gate close
• Participants able to enter in DDS offers on Dec 3
for effective Dec 4, 2007 00:00 hrs
• Further details to follow through web posting and
weekly stakeholder email
80
ETS Sandbox
• The AESO offers an electronic training environment for
participants to become familiar with AESO systems both
pro-actively and on a regular basis.
• A specific digital certificate is required to access the training
environment.
• Contact Nicole Boulet at [email protected] to gain
access to the training digital certificate and the web location
of this environment.
81
Questions?
Market Services
Customer Service
Ruppa Minhas
Mary-Beth Hansen
539-2589
539-2599
[email protected]
[email protected]
Doug Simpson
Marina Jagbandhansingh
539-2494
539-2587
[email protected]
[email protected]
Nicole Boulet
539-2634
[email protected]
82
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