NYISO Market Overview

Transcription

1 NYISO Market Overview Robert Pike Director, Market Design and Product Management New York Independent System Operator California ISO Pricing Forum April 22, 2014

2 Agenda Market Overview Fixed Block Unit Price Formation Shortage and Scarcity Pricing Voltage Support Service 2

3 Day-Ahead & Real-Time Markets Full two-settlement LBMP market for Energy and Reserves Forward and Real-Time Markets Simultaneous Co-optimization of Energy, Interchange, Operating Reserves and Regulation Minimize total production cost Allow cost effective trade-offs of services Reflect opportunity costs, shortage costs and inter-temporal costs Shortage pricing for operating reserves Virtual Bidding Demand Side Participation Economic evaluation of intertie transactions 3

4 Offer Flexibility Hourly flexibility: Startup Cost Minimum generation offer and MW Incremental energy in 11 offer/mw pairs Normal and emergency operating limits Operating reserve offer prices [only in DAM] Regulation service offer prices and availability In-day re-offer opportunities Self-scheduling and economic scheduling options Response rates for normal, emergency and regulation operation Minimum run time, minimum down time, maximum starts/ day 4

5 Day-Ahead to Real-Time Transition Bids by 5 a.m. Day before Day-Ahead Market (SCUC) SCUC = Security Constrained Unit Commitment RTC = Real Time Commitment RTD = Real Time Dispatch Reliability Unit Commitment Bids by 75 min before hour Supplemental Resource Evaluation Real-Time Commitment (RTC) Actual Conditions Real-Time Market (RTD) 5-minute Schedules Gen 5

6 Real-Time Market Overview Real-Time Commitment (RTC) Multi-period, time linked, security constrained unit commitment & dispatch software Co-optimizes to simultaneously solve load, reserves & regulation requirements Runs every 15 minutes, optimizes over next 2 ½ hour period Issues binding commitments for units to start Provides for commitment of quick start resources including 10 and 30-minute gas turbines Issues binding schedules for interchange transactions 6

7 Real-Time Market Overview Real-Time Dispatch (RTD) Multi-period, time linked, security constrained dispatch Co-optimizes to simultaneously solve load, reserves & regulation requirements Optimizes over next 60 minute period Issues binding dispatch instructions for units to operate Produces 5-minute ex-ante Locational Based Marginal Prices (LBMP) Settlements determined for each 5 minute interval based upon actual performance 7

8 Managing Intermittent Resources Actions taken to mitigate ramp impacts and increase market opportunities for flexible resources Integrating Wind: Wind Forecasting Economic Dispatch of Wind Removing Barriers: Inter-ISO Interchange Limited Energy Storage Resources 8

9 Fixed Block Unit Pricing The NYISO utilizes a multi-pass process to test for and incorporate fast start block loaded resources into the price setting algorithms. These resources are 10 and 30 minutes start gas turbines that only run at a fixed MW output level. Without special treatment their costs would not be explicitly represented in prices. A hybrid pass was designed to balance the needs of providing the ability for fast start, block loaded resources to set prices when they are economic, with the need to provide consistency between the pricing dispatches and the physical operation of the grid. 9

10 Hybrid Pass What is it The NYISO s GT pricing employs a pre-dispatch pass which is used to determine whether online GTs that are running within their initial commitment period are still economically needed to serve load The dispatch is executed with all fixed block units minimum generation MW release to zero. The initial commitment period is typically one hour, but is more precisely the period of time where the GT is running and the GT s Minimum Run Time constraint has not yet been met When an online GT is needed (dispatched > 0) in the hybrid dispatch pass it is eligible for pricing setting in the price setting dispatch pass When an online GT, still within its Minimum Run Time period, is not needed in the hybrid dispatch pass, it is not eligible to set price and is forced on during the price setting dispatch All online GTs operating past their Minimum Run Time period are eligible to set price in the price setting dispatch pass 10

11 $250 $200 $150 $100 $50 Hybrid Pass Price Impacts Hybrid Pass Supply Curve Dispatch Requirement $91/MWh Hybrid Pass Non-GTs are always treated flexibly (e.g. Steam Generator) GTs that are online are always treated as fully flexible from 0MW to UOL in the hybrid pass $0 $100 $90 $80 $70 $60 Non-GT Non-GT Non-GT Non-GT Non-GT Flexible GT Flexible GT Flexible GT Flexible GT Price Setting Pass Supply Curve $86/MWh Price Setting Pass Block Loaded GTs are treated as fixed at UOL and therefore have no increment cost; these are GTs that were dispatched to zero in the hybrid pass $50 $40 $30 $20 $10 $0 Block Loaded GT Block Loaded GT Block Loaded GT Non-GT Non-GT Non-GT Non-GT Non-GT Flexible GT These GTs shift the supply curve in the price setting pass which may result in a different price being calculated for the same dispatch need. 11

12 Offline GT Pricing Recognizes the availability of quick start, but offline, resources to run for real-time operations Established to address unnecessary price volatility resulting from forecasting uncertainties between RTC and RTD scheduling horizons. Provides RTD the ability to include eligible 10-minute offline units into the price setting formation Multi-period optimization reflects the full cost of operating the resources into the clearing price Only utilized if the lowest cost option Approximates unit commitment cost evaluation Incorporates a zero downward ramp rate into the scheduling decision Physical commitment of resource executed at the discretion of system operators 12

13 Shortage Pricing Mechanisms Used to provide pricing signals for needed services during scarcity conditions Provides incentives for addition of needed resources in required locations Demand Curve for Ancillary Services Demand Curves for Reserve and Regulation Transmission Demand Curve Demand Curve for Transmission Constraints Demand Response Emergency Demand Response Program and Special Case Resource 13

14 Operating Reserve Market-based full two-settlement service to ensure backup generation is available in the event of a system contingency Provided by: Generators Demand-side Resources Establish market based prices for each service and location based upon the results of the competitive auction Demand procures service from Day-Ahead Market Suppliers compete in Day-Ahead and Real-Time Market. Forward contracts issued from Day-Ahead Market and reoptimized in real-time 14

15 Regulation Reserve Market-based full two-settlement service for regulation and frequency response to provide for the continuous balancing of resources with demand Provided by Generators Flywheels and Batteries (LESRs) Demand Side Resources Establish market based prices for the service based upon the results of the competitive auction Demand procures service from Day-Ahead Market Suppliers compete in Day-Ahead & Real-Time Market Forward contracts issued from Day-Ahead Market and reoptimized in real-time 15

16 Reserve & Regulation Requirements NYCA Wide Reserve Values Total Spinning Reserve 655 MW Total 10 Min Reserve 1310 MW 30 Minute Reserve 1965 MW NYCA Wide Regulation Values Regulation MW Eastern (East of Central East) Reserve Values * Total Spinning Reserve 330 MW Total 10 Min Reserve 1200 MW * 30 Minute Reserve 1200 MW Long Island Reserve Values * Total Spinning Reserve 0 MW * Total 10 Min Reserve 120 MW 30 Minute Reserve MW * Denotes locational reserve categories that reflect a desire for dispersed reserves but are not operational requirements under the NYSRC reliability rules. 16

17 Reserve Demand Curve Values Additive Impact with LBMP Demand Curve values are cascading - the value for each constraint violated impacts the LBMP NYCA EAST LI 10 Min Spin $1150 $1700 $ Min Spin 10 Min Total 30 Min Total NYCA EAST LI $ $ Min Total 30 Min Total $650 $1175 $1225 $200 $225 $250 17

18 Value of Scarcity Pricing Activation of SCR/EDRP resources should be reflected in prices This signals there was a high probability an area would have been short operating reserves Current and future resources are incented to resolve this problem such that in the future the respective area is less likely to be short of operating reserves Shortage and scarcity prices should incent desired behavior in the short run and in the long run Prices across areas should appropriately reflect the value of the energy/ reserves in the respective area Prices should incent intra-day resource flexibility Consistent schedules and prices ensure these incentives are not undone 18

19 Shortage Pricing Review The NYISO, with its stakeholders, will complete an evaluation, assessment and prioritization of the following issues by Q2 2014: (i) the locations for which reserves are procured Consider adding, removing, or modifying reserve areas (ii) the reserves (type and amount) procured for those locations What products need to be secured in those locations? (iii) the reserve demand curve MW and value set points Review the Potomac Economics recommendation to raise the 30 minute reserve demand curve to $500 (iv) the implementation and triggering of scarcity pricing Modeling scarcity in the optimization 19

20 Transmission Pricing Transmission Shortage (MW) >0 to 5 >5 to 20 >20 Curve Price ($/MWh) 350 1,175 4,000 Implementing (Fall 2014) a multipoint shortage cost curve for transmission constraints will lead to: More efficient dispatch and commitment actions More efficient pricing outcomes 20

21 First Last Overview of Shortage Pricing Shortage Pricing Hierarchy with Reserve Shortage Costs Cascaded Product Location Shortage Amount (MW) Shortage Cost ($) Regulation NYCA 0 to 25 $80 Regulation NYCA >25 to 80 $ Minute Total West ALL $ Minute Total East ALL $ Minute Total LI ALL $250 Transmission ALL 0 to 5 $350 Regulation NYCA >80 $ Minute Total West ALL $ Minute Spinning West ALL $1,150 Transmission ALL > 5 to 20 $1, Minute Total East ALL $1, Minute Total LI ALL $1, Minute Spinning East ALL $1, Minute Spinning LI ALL $1,775 Transmission ALL >20 $4,000 Regulation 10 Minute Total 10 Minute Spinning 30 Minute Total Transmission 21

22 Voltage Support Service Reactive Power Service VSS Suppliers Receive Monthly Payments based on Annual Rate OF $3919/MVar Requirements: Generator s MVAR testing and capability established Auto Voltage Regulator required NYISO coordinates bus voltage profiles TOs responsible for local control in their network 22

23 Thousands Monthly Power Supplier Uplift Components $50,000 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 DAM BPCG State-wide RT BPCG State-wide DAMAP State-wide Import DAM BPCG State-wide Import RT GP State-wide DAM BPCG Local Reliability RT BPCG Local Reliability DAMAP Local Reliability MOB 23