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Market Design Evolution for Wind Integration

Market Design Evolution for Wind Integration. Philip Bruich Director, Market Administration. Regulatory Environment. Incorporated in Arkansas as 501(c)(6) nonprofit corporation Federal Energy Regulatory Commission (FERC) Regulated public utility Regional Transmission Organization

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Market Design Evolution for Wind Integration

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  1. Market Design Evolution for Wind Integration Philip Bruich Director, Market Administration

  2. Regulatory Environment • Incorporated in Arkansas as 501(c)(6) nonprofit corporation • Federal Energy Regulatory Commission (FERC) • Regulated public utility • Regional Transmission Organization • Founding member of the North American Electric Reliability Corporation (NERC)

  3. Members in 14 states Arkansas Kansas Iowa Louisiana Minnesota Missouri Montana Nebraska New Mexico North Dakota Oklahoma South Dakota Texas Wyoming

  4. Future SPP Footprints

  5. Renewables impacts to SPP • Peak Wind Penetration level: 67.28% April 27, 2019, 01:25 am • Peak Renewables Penetration level: 71.38% April 27, 2019, 01:25 am • Peak instantaneous Wind output: 16,524 MW May 17, 2019, 05:59 pm Summer Peak Load: 51GW Spring Minimum Load: 20GW • High impact on congestion and loading of the transmission system • Wind can cause capacity issues by • Not showing up during times of high demand, contributing to capacity shortages • Showing up too high during times of low demand, contributing to “Min Gen” issues • Uncertainty complicating unit commitments • Short-term, intra-hour changes in wind also require reserves to maintain balance between generation and obligations • Wind forecast is crucial for SPP to have the right generation online at the right time, while maintaining the reliability and economic efficiency of the regional transmission grid.

  6. Installed Wind Capacityby year

  7. GENERATING Capacity* by Fuel Type(89,999 MW total) * Figures refer to nameplate capacity as of 12/1/18

  8. 2018 YTD Energy Productionby Fuel Type (250,659 GWh total)

  9. Market LMP Contour MapMay 21, 2019 11:05 am

  10. Evolving Energy Mix 63% 61% 60% 59% 55% 48% 46% 27% • 23% 23% 22% 21% 19% 24% 14% 20% 12% 11% 17% 8% 6% * 2018 is through 11/28

  11. Variability + reliability requires fuel diversity

  12. NDVER To DVER Conversion Requires full conversion of non-dispatchable variable energy resources(NDVER). Variable energy resources with generation interconnection prior to 2012 had previously been granted non-dispatchable status. FERC approved requirement to implement conversion by 2020. Exemptions for resources exercising PURPA rights and non-dispatchable run-of-the-river hydro.

  13. Ramp Product Appropriately reward any Resource that can provide ramping capability beyond its immediate dispatch level when that capability helps to meet a later interval’s system requirements Compensate Resource commitments that increase the ramp capability for an upcoming uncertainty period at time of commitment Provides a tool that is utilized based on economic incentives for the Resource in lieu of the RUC Help solve intra hour ramp problems that exist Provide economic market transparency as it relates to the market value of ramp in SPP Long-term economic incentive should be in place to entice the right technology to be built for the challenges that face SPP in the short, mid and long-term This includes any environmental issues and the addition of more wind and solar that is expected

  14. Uncertainty Product SPP is at times served with over 50% with regionally diverse and variable fueled generation, including wind, hydro, and solar Even at high magnitudes, Regulation is mostly deployed for load variances A 30 minute product is being explored to procure and deploy Reserves for longer variances that have been traditionally managed with manual obligation offsets This product helps value Resources that provide ‘quicker’ responses and help formulate prices, by allowing LMPs to better represent real-time conditions

  15. FERC Order 841 Intent & Justification

  16. PENDING GI Requests (70,673 MW total) As of January 1, 2019

  17. Most days wind in SPP looks like this…

  18. However some days…

  19. Min and Max Percent of Generation Mix Per Fuel Type - Last 12 Months

  20. How high can we go? • Wind generation technology improvements continue to help • Fossil units must provide more flexibility, reduce minimum run output and shorten start times • Ramp capability will be an import market aspect in the future • Transmission expansion has dramatically helped deliver new resources to load and reduced energy prices • We must have dispatchable generation available • Production tax credit will impact growth • Solar is expected to grow • Wind penetration limit is system dependent!! • Potential for 75% wind penetration today • Total annual wind energy approaching 30%

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