ECONOMIC DISPATCH MODEL OF THE COLOMBIAN ELECTRICITY SYSTEM

ECONOMIC DISPATCH MODEL OF THE COLOMBIAN ELECTRICITY SYSTEM Juan Carlos Morales Ruiz Whosale Marke XM S.A E.S.P.

Summary and Objecives A sofware applicaion called Programmed Dispach and Re-Dispach (DRP for is iniials in Spanish) based on Mixed Ineger Programming echniques (MIP) has been developed by XM o solve he economic dispach problem on he Colombian Elecriciy Marke using CPLEX as he opimizer engine. This applicaion is being used o improve he energy dispach process, carried ou by he Sysem Operaor of he Colombian Power Sysem (called XM), aending o energy demand according o he rules of he Colombian Elecriciy Marke. The aim of his presenaion is o give a brief descripion of he Colombian Sysem and is dispach process and how he opimizaion problems have been faced by XM which is he Sysem Operaor and Marke Adminisraor in Colombia. 2

Conens 3 1. Characerisics of he Colombian Power Sysem 2. Descripion of he Colombian Marke 3. Economic dispach model of he Colombian elecriciy sysem and oher soluions developed by he Colombian ISO using ILOG CPLEX OPL 4. Conclusions and Resuls

1. Characerisics of he Colombian Power Sysem Overview

Characerisics of he Colombian Power Sysem 5 Generaion Capaciy (MW) Hydraulic Plans 8,525.00 Thermal - Coal 967.00 Thermal - Gas 2,757.00 Thermal - Fuel Oil 619.00 Self-producers and co-generaors 25.00 Small Plans 564.00 Toal 13,457.00 Reservoirs (GWh) Maximum Volume 16402 Transmission Neworks (km) 500 kv 2399 220-230 kv 11674 110-115 kv 11,290.00 Elecriciy Demand Annual (GWh) 53,870.00 Annual Growh (2008 vrs 2007) 1.640% Peak Load (MW) 9,079.00 In 2008, he peak load was 9,079MW. The energy demand accouned for 53,870 GWh, wih an increase of 1.64% compared wih 2007. The oal insalled capaciy is 13,457 MW composed of 64% Hydroelecric power and 36% Thermal. End User Tariffs (USDc/kWh) Residenial 9.1 Indusrial 8.4 hp://poral.xm.com.co/pages/descripciondelsisemaelecricocolombiano.aspx

Characerisics of he Colombian Power Sysem and Inernaional Inerconnecions 6 Col - Panamá 300 MW 500 MW Naional neworks Ecuador 336 MW Perú Col - Ecuador Implici Aucions Decoupled Sysems Colombia Col - Ven Bilaeral Conracs Venezuela Colombia Panama Fuure Colombia Ecuador Implici Aucions (2003) Colombia Venezuela Bilaeral conracs

2. Descripion of he Colombian Marke

8 Colombia's resrucuring began in 1991 wih he Consiuional reform Naional Inerconnecion El Niño 1992-1993 Raioning El Niño 1997-1998 No Raioning Consrains increase 1. 1. 1967... Consiuional reform Before 1991 Coverage Tariffs evoluion Demand procuremen Subsidies Unregulaed cliens 1992 Cliens Law 142 public services Law 143-elecriciy 1993 1994 1995 1996 Guerilla aacks on lines 1997 1998 1999 3. 2. 3. 2. Marke Compeiion Privae paricipaion Due receivables evoluion Hydrohermal balance Generaion availabiliy Power reserve Hedging operaions Energy losses CAN 536 Decision 2000... 2003 Afer Insiuions Creaion and consolidaion of CREG (regulaor), UPME (planning), CNO (operaion) and CAC (commercializaion)

Marke Srucure 9 Suppliers pass heir coss hrough o heir cliens COMMERCIALIZATION Buy and sell energy Compeiion Commercializaion margin approved by CREG for he regulaed marke DISTRIBUTION (wires) Regional Monopolies Free access o he grid Regulaed charges TRANSMISSION Naural Monopoly Compeiion since 1999 in expansion (for he marke) Free access o he grid and regulaed charges GENERATION Compeiion OTC conracs, negoiaed prices Bid Compeiion in he spo marke Impors from oher counries (No TIE) CLIENTS Regulaed Unregulaed Public Lighing Expors o oher counries (No TIE) SYSTEM OPERATION MARKET ADMINISTRATION Naional Dispach Cener Financial Operaions Ecuador Marke Shor Term Inernaional Energy Transacions (TIE) XM is in charge of operaing he Naional Inerconneced Power Sysem hrough he Naional Dispach Cener -CND- and of adminisering he Wholesale Elecriciy Marke -MEM-.

Marke Transacion Whosale Energy Marke 10 WHOLESALE ENERGY MARKET Energy is raded on wo compeiive markes Bilaeral conracs marke carried ou by public Long Term Energy Marke where energy is raded on an hourly basis by bilaeral conracs Shor Term Energy Marke where energy is raded on an hourly basis jus for he nex day Elecriciy Pool aucions for supplying elecriciy o he Regulaed Marke and free negoiaions for supplying elecriciy o he Non-Regulaed Marke or Hedge Operaions. The spo marke hrough bids o he Pool, where available capaciy mus be declared for cenralized dispach. On he Colombian Wholesale Elecriciy Marke, he Pool is where all generaion plans compee on he basis of bidding prices o supply he elecriciy demand of he Naional Inerconneced Sysem. Traders do no paricipae in an acive way in he Pool since hey canno submi bids. When prices are no he resul of compeiion, generaion plans are paid based on heir variable coss which have regulaed maximum values.

3. Economic Dispach Model

Economic Dispach (Day Ahead Hourly Based Dispach) Prices Prices bid bid Declared Declared availabiliy availabiliy Transmission Transmission consrains consrains (represened (represened by by he he area area impor/expor impor/expor limis limis and and nework nework consrains) consrains) Up Up and and down down reserve reserve for for AGC AGC Uni Uni characerisics characerisics Demand Demand forecas forecas Reliabiliy Reliabiliy Informaion Informaion Coordinaed Dispach Inerconnecions Inerconnecions price price curves curves (exporaion) (exporaion) Impor Impor price price curve curve 08:00 13:00 A 24-hour opimizaion process aimed a he minimizaion of operaing coss subjeced o generaion and nework consrains. 14:45 12 The Sysem Operaor compues he opimal schedule for each hermal uni and hydro plans for each hour of he nex day and for he inernaional inerconnecion wih Ecuador (Implici aucion) 15:05 Dispach wih Venezuela Colombia Venezuela Ecuador

Dispach Model 13 General Characerisics The DRP is a Uni Commimen problem wih Nework Linear Consrains (NLC - Opimal Power DC Flow). The applicaion finds he opimal generaion program of hermal unis and hydro plans according o he Colombian Regulaions and he inernaional inerchange programs. Basic characerisics of he DRP program: Mahemaical formulaion using Mixed Ineger Programming. The DRP has been developed by componens. Exremely fas execuion imes. Module of mahemaical modeling. Marix generaion in sandard formas (LP). Advanced User Inerface Graphic. High performance. DRP allows he modeling of differen scenarios (dispach, es, raining, ec) DRP models he echnical characerisics of he unis and he ransmission nework wih volage levels equal o or greaer han 110 kv. The dispach problem is modeled wih a nework of 212 generaion unis, 600 ransmission lines and 438 buses.

Dispach Model 14 Problem Descripion The dispach problem is solved by opimizaion echniques using Mixed Ineger Programming. Minimizing he operaional cos of he sysem subjec o he echnical characerisics of he unis, he frequency reserve and he nework consrains. Mahemaical Inerface CPLEX Callable Libraries Fuure Marix LP Solve Soluion Daa Base Repors DRP models a sysem of 212 generaion unis, 600 ransmission lines and 438 buses and ges he soluion in an average of 83 seconds

Dispach Model Mahemaical formulaion T I Minimize p i, * G i, = 1 i = 1 Subjec o Thermal uni minimum saring up/down imes on 1 si 1 xi, i off ui, = 0 si 1 xi, i 1,0 in _ oher _ case Operaion reserve requiremens I i= 1 I i= 1 G i, G g i, min i, + g max i, r down r up Elecric area flows limi Ia G i a, + I a, d a, i a exp imp I a, I a, I a, U U i, i, = 1 = 1 Mahemaical Inerface Nework consrain P p kl min kl = ( θ θ ) k P kl x kl Demand balance: I sisema G i, = d i i= 1 l p max kl Nodal balance demand Securiy consrains min max U i, g i, G i, g i, U i, G G Ramping consrains min [ 1 Ui, (1 Ui 1) ] URi + Ui, (1 Ui, 1 gi, min [ U (1 U )] DR + U (1 U g i, Gi, 1 ) i, 1 Gi, 1 i, 1 i, i i, 1 i, ) i, Blocks ramps and special linear ramps 15

Dispach Model 16 Ramping Consrains The dispach problem faces wo differen kinds of ramp consrains: ramp consrains under normal operaing sae, sarup and shudown ramp consrains; which are defined as follows: MWh Warm-up ime Up/down ime consrains Ramping consrains 0 1 2 3 n n+1 n+2 n+3 n+4 n+5 fixed blocks i) Operaing ramp: DRP model les o have five differen of up/down generaion levels of uni i on any wo successive on-line periods (eiher sarup or shudown periods) ii) iii) Sarup ramp: When an off-line uni is urned on, i akes T periods wih fixed increasing blocks of generaion o reach he minimum raed capaciy of he uni. Shudown ramp: When an on-line uni is urned off, is generaion level has o be reduced wih fixed decreasing blocks of generaion o reduce o zero.

Fecha de repore: Enero 18 de 2008 (Fecha de aplicación: Operación de 05 de Febrero) Plana: TERMOVALLE 1 Mínimo Técnico (MW): 100 Rango de disponibilidad Mínimo Máximo Configuración Número: 1 200 205 Descripción: 1TC X 1HRSG X 1TV Combusible: Gas 17 Modelo 1 Frío Tibio Caliene UR1 44 62 87 UR2 36 UR3 UR4 UR5 Bloques UR (MWh) DR1 DR2 DR3 DR4 DR5 Bloques DR (MWh) 12 Bloque de despachos > MT a Cero 12 DRP Ramp Inerface Modelo 2 Modelo 3 Arranque Frío Tibio Caliene Segmeno UR (MWh) Segmeno DR (MWh) Mínimo Máximo UR UR' Mínimo Máximo DR DR' UR1 62 85 93 DR1 100 205 90 UR2 86 99 118 DR2 UR3 100 205 85 68 DR3 90 UR4 UR5 Inervalos de iempo fuera de línea para deerminar ipo de arranque TFL > 48 horas 8 horas < TFL <= 48 horas TFL <= 8 horas Bloques UR (MWh) Bloques DR (MWh) a b UR c d DR T/VALLE UNIT DR4 DR5 Cold Sar Up Operaion Period Generaion 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 0 0 0 0 0 0 0 0 0 44 80 173 200 110 178 200 110 100 100 100 100 12 0 0 Fixed Blocks Up Up Time. Fixed Block Down

Oher Opimizaion Applicaions

Oher Applicaions (1) 19 Firm Energy for he Reliabiliy Charge (ENFICC) ENFICC refers o he maximum elecric energy ha a generaion plan is able o deliver on a coninual basis during a year, in exreme condiions of hydro inflows. Basic characerisics: The ENFICC of hydraulic plans is calculaed using a compuaional model (available in he Web Page www.creg.gov.co), which maximizes he minimum energy ha a hydraulic generaion plan can produce monhly during dry periods, using CPLEX as de opimizaion engine. This model incorporaes he following echnical parameers: Hisorical saisics of average monhly waer inflows; Ineracion of he generaion plan wih he waer sources, discharges and resricions in he waer conducion sysems; Characerisics of he generaion plans: average efficiency of he plans, minimum and maximum generaion; Waer reservoir: i) minimum echnical waer level, ii) maximum echnical waer level and iii) oher uses of waer like aqueduc or irrigaion and environmenal resricions; Index of Hisorical Unavailabiliy due o Forced Ouages of he Plans (Índice de indisponibilidad hisórica por salidas forzadas de la plana or IHF, is acronym in Spanish); Flow consrains.

Oher Applicaions (2) Ideal Dispach (ILOG OPL) Acual Generaion Ideal Generaion Acual dispach is more expensive han he ideal dispach because i akes ino accoun ransmission sysem limiaions. Consrain coss are paid by suppliers and passed hrough o end users. Ou of meri generaion has a regulaed cap. 20 dif dif Ideal Acual Acual Ideal PAYS (R-) Consrain cos RECEIVES (R+) Day (d) Day (d+1) Calculaed by he DRP Program Prices bid Prices bid Prices bid Real generaion availabiliy Prices bid Real generaion availabiliy Declared availabiliy Uni characerisics Declared availabiliy Uni characerisics Transmission consrains Real Demand Transmission consrains Real Demand (represened by he area impor/expor (represened by limis he and area nework impor/expor consrains) limis and nework consrains) Up and down reserve for AGC Up and down reserve for AGC Uni characerisics Uni characerisics Demand forecas Demand forecas Reliabiliy Informaion Reliabiliy Informaion An hour opimizaion process aimed a he minimizaion of operaing coss subjeced o generaion and demand consrains. And also compues he Spo Price Marke for each hour of he previous day. This year is going o be released a new applicaion developed using ILOG OPL

Oher Applicaions (3) Conrac Dispach (OPL / In phase of consrucion wih OPL) 21 Operaional Informaion Over 45,000,000.00 operaions every monh Ex pos process OPERATIONAL PROCESS AGENTS Generaors Traders Over 150,000 gahered every day COMMERCIAL PROCESS BY AGENTS 1 5 9 13 17 21 Measures Over 310 conracs are dispached every day COMERCIAL PROCESS Wholesale Elecriciy Marke Long Term Conracs Bilaeral Conracs Marke in which generaors and elecriciy suppliers sell and purchase energy a freely-negoiaed prices and quaniies. This marke is fundamenally financial: he purpose of he conracs is o reduce he exposure of boh he supplier and he end-user o price volailiy in he spo marke, while he physical delivery of he energy commied in hese conracs occurs via he spo marke.

Oher Applicaions (4) DRP wih non linear nework consrains (DRP OPF AC/ In phase of consrucion wih OPL) 22 Uni commimen DRP Operaion Program Nework consrains OPF AC Benders Cus Hydrohermal dispach sysem wih linear nework consrains for shor, medium and long erm operaion sudies (In phase of consrucion wih OPL) Sochasic opimizaion mehodology Thermal plan modeling A Complee hydro plans modeling Transmission nework Marke consrains Risk

4. Conclusions and Resuls

Resuls Since March 1s 2003, DRP is being used as he official sofware o calculae he economic dispach in he Colombian Power Sysem. Alhough he economic dispach is a big and a complex problem which mus be solved in a very shor period of ime, DRP has allowed us o reach high levels of reliabiliy and opporuniy, nearly o 100%, in he delivering of he final dispach program. 24 Sum up, DRP is a Uni Commimen problem wih Nework Linear Consrains (NLC - Opimal Power DC Flow), which resolves he economic dispach problem according o all he rules of he Colombian Marke. Among ohers, DRP obains he following resuls: The dispach program for each hermal uni and hydroelecric plan, marginal nodal prices, he marginal sysem price, power flows beween elecric areas and ransmission lines, he frequency reserve program and inernaional ransacion programs (TIE), ec. XM is working o develop in house some of he mos criical applicaions for he business (power sysems and energy markes); as he DRP, Ideal Dispach, Firm Energy, Conracs, Hydrohermal dispach.

Conclusions 25 According o he dynamics of he Colombian Power Markes, i has become necessary o conrol our own applicaion sofware. DRP and he oher applicaions allow us o implemen new and very complex consrains, making i possible o incorporae new rules ino any power and energy marke soluions. The Applicaions have been developed according o he specificaions and requiremens of proper users in order o reduce he processing ime and he human misakes in he manipulaion of daa.

XM Compañía de Experos en Mercados Calle 12 Sur N 18 168, PBX: 57(4) 317 22 44 FAX: 57(4) 317 08 33, Medellín Colombia www.xm.com.co

27