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Presentation Overview. IntroductionMarket OverviewDay-Ahead MarketReal-Time MarketInstalled CapacityTransmission Congestion ContractsCost-Based Products. NYISO in the Northeast. Ontario IESO27,005 MW*. Hydro- Qu
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1. NYISO Market Overview
2. Presentation Overview Introduction
Market Overview
Day-Ahead Market
Real-Time Market
Installed Capacity
Transmission Congestion Contracts
Cost-Based Products
3. NYISO in the Northeast
4. NYISO Roles Reliability
Markets
Planning
5. Reliability Managing the efficient flow of power on nearly 10,900 miles of high-voltage transmission lines -- from more than 500 generating units -- on a minute-to-minute basis, 24 hours-a-day, seven days-a-week.
6. Markets Administering & monitoring New York’s wholesale electricity markets totaling $11 Billion annually -- running auctions that match the buyers and sellers of power.
7. Planning
Conducting long-term assessments of New York State’s electricity resources and needs and evaluating the feasibility of proposed projects to meet those needs.
9. Here are the NYCA Zones.
There are 11 internal and 4 external.
IESO – Independent Electric System Operator
HQ – Hydro Quebec
ISO New England
PJM
Load pays the LBMP at the zone they are located in.Here are the NYCA Zones.
There are 11 internal and 4 external.
IESO – Independent Electric System Operator
HQ – Hydro Quebec
ISO New England
PJM
Load pays the LBMP at the zone they are located in.
10. NY Capability by Fuel Type
11. NY Generation by Fuel Type
13. Reliability Regulation
North American Electric Reliability Corporation (NERC)
Independent, self-regulatory, not-for-profit organization with mission to improve the reliability and security of the bulk power system in the U.S., Canada and part of Mexico
Compliance with NERC Reliability Standards became mandatory and enforceable in the U.S. in 2007
14. NYISO Markets
15. NY Electricity Markets Bilateral Contracts - The first way to purchase wholesale electricity is to set up a contract directly between a generator and a load. Many of these bilateral contracts were first set up when the utilities sold off their generators to new owners. Both parties (buyer and seller) were skeptical as to how successful the new market would operate. They wanted to hedge themselves by purchasing or selling a portion of the electricity for a set price over a set time frame. As a matter of fact when the market first opened about 70% of the electricity was purchased bilateraly. As loads and generator owners became more comfortable with the new market, the percentage of bilaterals reduced to about 45% of total electricity purchased and stayed in that range ever since.
Day–Ahead Market (DAM) The NYISO’s DAM operates a day in advance of the actual day. For example, bids for tomorrow’s DAM were closed at 5:00 a.m. this morning. The computer takes the bids and runs a program that will clear tomorrows market which begins at 12: 00 tonight. DAM prices are posted by the NYISO by 11:00 a.m. About 51 % of the electricity is purchased through the DAM.
Real Time Market The NYISO’s Real Time Market is the equivalent of a spot market. No matter how much is purchased bilaterally and through the DAM, it is never going to be 100% accurate. Forecasts change and outages occur. The Real Time Market allows buyers and sellers to make up any differences that occur during the actual hour. About 4% of the total electricity is purchased in the Real Time Market.
OTHER MARKETS:
Installed Capacity (ICAP)
Transmission Congestion Contracts (TCC’s)
Reserve
Regulation
Bilateral Contracts - The first way to purchase wholesale electricity is to set up a contract directly between a generator and a load. Many of these bilateral contracts were first set up when the utilities sold off their generators to new owners. Both parties (buyer and seller) were skeptical as to how successful the new market would operate. They wanted to hedge themselves by purchasing or selling a portion of the electricity for a set price over a set time frame. As a matter of fact when the market first opened about 70% of the electricity was purchased bilateraly. As loads and generator owners became more comfortable with the new market, the percentage of bilaterals reduced to about 45% of total electricity purchased and stayed in that range ever since.
Day–Ahead Market (DAM) The NYISO’s DAM operates a day in advance of the actual day. For example, bids for tomorrow’s DAM were closed at 5:00 a.m. this morning. The computer takes the bids and runs a program that will clear tomorrows market which begins at 12: 00 tonight. DAM prices are posted by the NYISO by 11:00 a.m. About 51 % of the electricity is purchased through the DAM.
Real Time Market The NYISO’s Real Time Market is the equivalent of a spot market. No matter how much is purchased bilaterally and through the DAM, it is never going to be 100% accurate. Forecasts change and outages occur. The Real Time Market allows buyers and sellers to make up any differences that occur during the actual hour. About 4% of the total electricity is purchased in the Real Time Market.
OTHER MARKETS:
Installed Capacity (ICAP)
Transmission Congestion Contracts (TCC’s)
Reserve
Regulation
16. Market Overview
Two-Settlement System: Day-Ahead and Real-Time Markets
Bid Based Security-Constrained Economic Dispatch (SCED) and Commitment (SCUC)
Locational Based Marginal Pricing (LBMP)
Co-optimization of Energy, Operating Reserves and Regulation
Scarcity pricing for operating reserves
Bid Production Cost Guarantees (Uplift)
Virtual Bidding
Transmission Congestion Contracts (TCC)
Installed Capacity Markets (ICAP)
Demand Side Participation
Market Power mitigation with conduct and impact tests and Automated Mitigation Procedure (AMP) Rana has already introduced these concepts…
You will be able to see these philosophies as we go through the presentationRana has already introduced these concepts…
You will be able to see these philosophies as we go through the presentation
17. The NYISO Market Timeline consists of the DAM and the RT. RT is also referred to the Balancing Market.
DAM
Prior to 5am, Load Forecast, Load Energy Bids, Generator Offers for Energy, Reserve and Regulation and DADRP bids submitted for the day-ahead market. The DAM schedule is posted by 11am. Settlements are solved on an hourly basis
RT, the market closes 75 minutes prior to each hour in RT. This is also referred to HAM or Hour Ahead Market Bids. After the HAM closes our software solves to meet the actual demand by sending signals:
6 seconds for Regulation
5minute basepoints for Energy, Reserve
In RT or Balancing Market, settlements are at RTD, Real Time Dispatch, intervals - 5 minute intervals.
The NYISO Market Timeline consists of the DAM and the RT. RT is also referred to the Balancing Market.
DAM
Prior to 5am, Load Forecast, Load Energy Bids, Generator Offers for Energy, Reserve and Regulation and DADRP bids submitted for the day-ahead market. The DAM schedule is posted by 11am. Settlements are solved on an hourly basis
RT, the market closes 75 minutes prior to each hour in RT. This is also referred to HAM or Hour Ahead Market Bids. After the HAM closes our software solves to meet the actual demand by sending signals:
6 seconds for Regulation
5minute basepoints for Energy, Reserve
In RT or Balancing Market, settlements are at RTD, Real Time Dispatch, intervals - 5 minute intervals.
19. Day-Ahead Market Security Constrained Unit Commitment (SCUC) scheduling software optimizes for least cost solution
Co-optimizes energy and ancillary service bids (reserve & regulation)
Hourly Locational Based Marginal Prices (LBMP)
Binding forward contracts issued to Suppliers and Loads
Bilateral transaction scheduling
Installed capacity suppliers are required to bid
Virtual resources (zonal supply/demand) allowed to bid into DAM
20. Day-Ahead Market (cont.) DAM operations began in December 1999
Significant redesign in February 2005
Five pass methodology:
Bid load pass
BPS Forecast pass
LRR Forecast pass
Forecast Re-dispatch pass
Bid Re-dispatch pass
21. Four Pass Methodology Bid load pass (Including LRR evaluation)
BPS Forecast pass
Forecast Re-dispatch pass
Bid Re-dispatch pass
23. Real-Time Market External transaction and generation suppliers may adjust bids hourly for consideration in the Real-Time Market evaluation to address in-day operating conditions
Real-Time Market scheduling software re-optimizes energy, reserve and regulation bids every 5 minutes
Provides for commitment of “quick start” resources including 10 and 30-minute gas turbines
Produces 5-minute Locational Based Marginal Prices (LBMP)
24. Real-Time Market (cont.) Real-Time Commitment (RTC)
Security constrained unit commitment & dispatch software
Co-optimizes to simultaneously solve load, reserves & regulation req.
Runs every 15 minutes, optimizes over next 2 ½ hour period
Issues binding commitments for units to start
Real-Time Dispatch (RTD)
Multi-period security constrained dispatch
Co-optimizes to simultaneously solve load, reserves & regulation req.
Runs approximately every 5 minutes
Optimizes over next 60 minute period
Issues binding dispatch instructions for units to operate
25. RT/DAM LBMP Results Generators
Paid the LBMP (where they inject power) at the Generator Bus.
Load
Charged the Zonal LBMP based where the Load is located.
Zonal LBMP is a Load Weighted Average for the Zone. LBMP is the cost to provide the next MW of load at a specific location in the grid. This concsits of the cost of energy, losses and congestion.
LBMPs are determined in DAM (hourly) and I RT (every 5 minutes). There are LBMPs for each Generator Bus and for each Zone. A zone is a load weighted average.
Generators are paid the LBMP at their generator bus. Load pays the Zonal LBMP.LBMP is the cost to provide the next MW of load at a specific location in the grid. This concsits of the cost of energy, losses and congestion.
LBMPs are determined in DAM (hourly) and I RT (every 5 minutes). There are LBMPs for each Generator Bus and for each Zone. A zone is a load weighted average.
Generators are paid the LBMP at their generator bus. Load pays the Zonal LBMP.
26. RT/DAM AS Results Generators
All flexibly dispatched generators must offer operating reserves.
Paid the Clearing Price for the location and service provided.
Performance factors included in real-time settlement.
Load
Fully purchase AS in Day-Ahead Market. Real-Time balancing lies with suppliers.
27. Guarantee Payments (“Uplift”) BPCG: Bid Production Cost Guarantee (BPCG)
Ensuring recovery of sufficient revenue to cover as-offered costs
Meet qualifying criteria
Based on [Submitted bid costs less Total Revenue]
DAM and/or RT
Types:
Power Suppliers (internal)
Transaction Customers (imports)
DAM Margin Assurance
Guarantees Generator's DAM margin (profit) is not reduced by balancing market settlements in RT due to reliability scheduling Uplift _ Incurred when market revenues are not sufficient to satisfy all market obligations while ensuring all suppliers recover sufficient revenue to cover their full as-offered costs
Uplift _ Incurred when market revenues are not sufficient to satisfy all market obligations while ensuring all suppliers recover sufficient revenue to cover their full as-offered costs
28. Generator Bidding Flexibility Fully featured market bidding capabilities
Hourly bidding flexibility:
Startup Cost
Minimum generation bid and MW
Incremental energy in 11 bid/MW pairs
Normal and emergency operating limits
Operating reserve bids
Regulation reserve bids and availability
Self-scheduling and economic scheduling options
Response rates for normal, emergency and regulation operation
Minimum run time, minimum down time, maximum starts per day
29. Load Bidding Flexibility Fully featured market bidding capabilities
Hourly bidding flexibility
Fixed load requirements
Bilateral load
Price capped load in 3 bid/MW pairs
Demand Response with all generator bid characteristics
30. Virtual Trading Virtual Supply offers and Virtual Load bids are placed in DAM only.
Financial Transactions only
No effect on RT physical energy consumption
Does not compromise physical commitment of energy resources for system reliability
Virtual Market was a request from MPs
Virtual Market allows companies outside electricity industry to participate in NY’s markets
It has facilitated price convergence between DA and RT markets
Virtual Market does not compromise physical commitment of energy resources for system reliability because Virtual bids and offers are not input for the passes of reliability in SCUC, no bids/offers are placed in RT
Virtual Market was a request from MPs
Virtual Market allows companies outside electricity industry to participate in NY’s markets
It has facilitated price convergence between DA and RT markets
Virtual Market does not compromise physical commitment of energy resources for system reliability because Virtual bids and offers are not input for the passes of reliability in SCUC, no bids/offers are placed in RT
31. Reserve & Regulation Requirements
32. Wind Integration Summer 2008 – Established centralized third-party wind power forecasting tools and incorporated predictions into Day-Ahead and Real-Time Market tools to improve commitment and scheduling of resources.
Summer 2009 – Implemented Wind Resource Management to incorporate the economic preferences of each wind facility within the NYISO’s real-time dispatch process.
This modification minimizes necessary energy limitations and duration, identifies the most efficient resource to limit, incorporates instructions into market clearing prices and avoids manual out-of-market actions.
Future Enhancements - NYISO is developing internal tools to alert system operators of potential for significant wind ramp events.
Sudden large changes in wind speeds and output levels
High wind speeds approaching turbine cut-out levels
33. Limited Energy Storage Resources (LESR) LESR are generators offering Regulation Service only, characterized by limited energy storage or the inability to sustain continuous operation for a minimum period of one hour.
Includes flywheel and battery storage technologies.
Energy levels will be managed by ISO to maximize market participation within the limits of scheduling and operational needs.
34. Demand Response
35. Installed Capacity (ICAP) Role of Capacity Market
Ensures Resource Adequacy
Supports market signals for investment
Suppliers offer capacity based on proven ability to supply
Loads procure capacity based on forecasted peak loads, plus reliability margins, with locational requirements
16.5% Reserve Margin for Capability Year 2008/2009
New York City must procure locally 80% of forecasted peak
Long Island must procure locally 97.5% of forecasted peak
36. Transmission Congestion Contracts (TCCs) Financial instrument
Available between any generator, proxy or zonal location
TCCs are fully funded by TOs
Financial obligation – right to collect and obligation to pay congestion rents
Used to hedge transmission system congestion costs
Settled in the Day-Ahead Market
Do not have to participate in the energy market
Used to hedge costs resulting from transmission system congestion
DAM Congestion Rents determined by the difference in the Congestion Component at the TCC point of injection and point of withdrawal for each hour of the TCC effective period
Used to hedge costs resulting from transmission system congestion
DAM Congestion Rents determined by the difference in the Congestion Component at the TCC point of injection and point of withdrawal for each hour of the TCC effective period
37. Transmission Congestion Contracts (TCCs) MPs purchase TCCs via NYISO TCC Auctions:
Centralized Auction
1 year and 6 month durations available
Monthly Reconfiguration Auction
1 month durations available
Fixed price TCCs available for 5 and 10 year durations for historical loads
Incremental TCCs may be awarded for transaction expansion
Owners of TCCs can sell TCCs:
Monthly NYISO TCC reconfiguration auctions
Secondary Market
NYISO deals with Primary Holders only
Used to hedge costs resulting from transmission system congestion
DAM Congestion Rents determined by the difference in the Congestion Component at the TCC point of injection and point of withdrawal for each hour of the TCC effective period
Used to hedge costs resulting from transmission system congestion
DAM Congestion Rents determined by the difference in the Congestion Component at the TCC point of injection and point of withdrawal for each hour of the TCC effective period
38. Cost-Based Products
Voltage Support Services
Black Start Service
39. Voltage Support Service (VSS) Reactive Power Service
VSS Suppliers Receive Monthly
Payments based on Annual
Rate of $3,919/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 VSS is Cost Based Ancillary Services
Maintain a desired voltage level on NYCA transmission/distribution grid during Real Time Operations.
There are incentives to VSS suppliers to participate in ICAP such that they receive a monthly payment vice if they were VSS only they would receive VSS payments only for the hours of providing VSS.VSS is Cost Based Ancillary Services
Maintain a desired voltage level on NYCA transmission/distribution grid during Real Time Operations.
There are incentives to VSS suppliers to participate in ICAP such that they receive a monthly payment vice if they were VSS only they would receive VSS payments only for the hours of providing VSS.
40. Black Start Service Black Start Restoration Plan
Fixed payment based on provider’s costs
NYISO selects generating resources with black start capability based on:
Electrical location in the grid
Startup time
Maximum Response rate
Maximum Power output
Currently three providers
Black Start is a Cost Based Ancillary Services
NYISO currently is not looking for any additional Black Start Providers.
Note there are Local Black Start Restoration coordinated through the TO.
Black Start is a Cost Based Ancillary Services
NYISO currently is not looking for any additional Black Start Providers.
Note there are Local Black Start Restoration coordinated through the TO.
41. NYISO Tariffs
42. More Information NYISO Home Page
www.nyiso.com
New York Market Orientation Course (NYMOC)
www.nyiso.com/public/services/market_training
43. Good morning and welcome to today’s symposium, “The Future is Now: Energy Efficiency, Demand Response and Advanced Metering.”
I am Mark Lynch and I serve as President and CEO of the New York Independent System Operator. Good morning and welcome to today’s symposium, “The Future is Now: Energy Efficiency, Demand Response and Advanced Metering.”
I am Mark Lynch and I serve as President and CEO of the New York Independent System Operator.