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September 26, 2013 | Sturbridge, MA

September 26, 2013 | Sturbridge, MA. Reliability Committee and Markets Committee Meeting #4. Considerations in the Design of Capacity Zones. Al McBride. MANAGER, AREA TRANSMISSION PLANNING. Presentation Objectives. Briefly review the Stakeholder discussions so far

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September 26, 2013 | Sturbridge, MA

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  1. September 26, 2013 | Sturbridge, MA Reliability Committee and Markets Committee Meeting #4 Considerations in the Design of Capacity Zones Al McBride MANAGER, AREA TRANSMISSION PLANNING

  2. Presentation Objectives • Briefly review the Stakeholder discussions so far • Discuss the proposed trigger for the modeling of Capacity Zones • Discuss next steps

  3. High Level Summary of the ISO Proposal • For FCA-9, Capacity Zones would be created by implementing an objective criteria (automatic trigger) using the existing 8 energy Load Zones as the starting point • The objective criteria for the automatic creation of Capacity Zones would be based on the “line-line” Transmission Security Assessment-like analysis of the energy Load Zones, along with security constrained import analysis • For FCA-9, the 8 energy Load Zones will serve as an approximation of the real transmission operating boundaries • Energy Load Zones that do not exceed the automatic trigger will be merged into the Rest-of-Pool Capacity Zone • For FCA-10 and beyond, incorporate the analysis of appropriate zonal boundaries into the annual process used to calculate transfer limits for Regional System Plan and NERC statutory requirements • The automatic trigger would continue to define whether a zone is modeled

  4. Stakeholder Discussions • Al McBride • MANAGER, AREA TRANSMISSION PLANNING

  5. Summary/Highlights • At the July 7, 2013 Reliability Committee (RC) meeting we discussed • The requirements of the FERC order • The constraints observed and expected on the New England system • The methodologies in place to calculate requirements • Considerations in the design of Capacity Zones • The timeline challenges associated with making changes for FCA-9 • At the July 22 and 23, 2013 Summer RC meeting we discussed • The possibility of making some changes in time for FCA-9 • On July 30, 2013, the ISO submitted the compliance timeline to FERC http://www.iso-ne.com/regulatory/ferc/filings/2013/jul/er12-953-002_7-30-13_fcm_zone_compliance_filing.pdf

  6. Summary/Highlights, continued • At the August 19, 2013 RC meeting we discussed • The Capacity Zone creation methodologies in place in PJM and New York • The Transmission Security Analysis (TSA) that has been performed in New England for the 8 energy Load Zones • The transmission transfer capability analysis processes in place in New England • Possible ways forward to model Capacity Zones

  7. Summary/Highlights, continued • At the September 3, 2013 RC meeting we discussed • The ISO proposal at a high level • Examples of the Capacity Zone models in place in PJM and NY • Possible objective criteria (triggers) for the creation of Capacity Zones (with examples) • Export-constrained zones • The proposed process for the analysis of transfer limits and interfaces in the RSP process • What is proposed for FCA-9 and FCA-10 (and beyond)

  8. Stakeholder ProcessAs defined by FERC • FERC has required the ISO to consider the following during the Stakeholder Process: “…(1) the appropriate level of zonal modeling going forward; (2) the appropriate rules to govern intra- and inter-zonal transactions; and (3) whether objective criteria by which zones may automatically be created in response to rejected delist bids, generation retirements or other changes in system conditions would be appropriate in New England, or if not, why not.”  Docket No. ER12-953-002: Order Issued May 31, 2013

  9. Subsequent FilingAs defined by FERC • FERC has required the ISO to make an additional filing at a later time to address: “…how it has addressed these items in its stakeholder process, and it must: (i) develop and file with the Commission revisions to the ISO-NE tariff that articulate appropriate objective criteria to revise the number and boundaries of capacity zones automatically as the relevant conditions change,or (ii) file with the Commission an explanation as to why such criteria are unnecessary.” Docket No. ER12-953-002: Order Issued May 31, 2013

  10. Automatic trigger for the modeling/creation of zones • Al McBride • MANAGER, AREA TRANSMISSION PLANNING

  11. Trigger Choices • At the September 3, 2013, RC meeting the ISO discussed the concept of zone modeling triggers based on: • The MW quantity of resources within the zone, or, • The import capability into the zone • In addition, the ISO discussed the “headroom” associated with the trigger being based on: • A percentage adder (such as 15%) to the requirement, or, • An adder equal to the size of the largest resource

  12. ISO Proposal • The trigger to model an import constrained Capacity Zone is proposed to be resource-based with an adder for the largest resource in the zone • A resource based trigger relates directly to the resources needed within the zone • In the cases where the import capability is very small compared with the requirement in the zone, then an import-based trigger can be less meaningful • The addition of the largest resource to the zonal requirement relates directly to the potential retirements and delists within the zone

  13. Calculating a Transmission Security Requirement • A “line- line” TSA Requirement is calculated as follows (simplified): • Assume resource unavailability of 5% • TSA Requirement = 5,263 MW • Simplified Example Zone (90/10 Load – Import Limit) (9,000 – 4,000) TSA Requirement TSA Requirement 1 - (resource unavailability factor) 1 - (0.05) N-1-1 Import Capability = 4,000 MW 90/10 Load = 9,000 MW

  14. A Resource-Based Trigger Considering Potential Retirements • TSA Requirement = 5,263 MW • The largest resource in the zone is 1,000 MW • Using a potential- retirement/delist-based automatic trigger for modeling zones: • If there aremore than 5,263 + 1,000 = 6,263 MW of Existing Resources in the zone, then the zone would not be modeled • Any received retirement requests would not be included in the count of Existing Resources • Simplified Example Zone N-1-1 Import Capability = 4,000 MW 90/10 Load = 9,000 MW TSA = 5,263 MW The largest Resource is 1,000 MW

  15. Analysis of FCA-8 Values • The following slides provide numerical examples of the trigger calculation for the New England energy Load Zones in FCA-8 • The ISO is not proposing to implement the methodology for FCA-8 • The calculations are intended to help illustrate the proposal • The first two examples are Connecticut and NEMA/Boston • Import transfer capability has been calculated for these zones • The remaining examples discuss other New England energy Load Zones for which import transfer capability has not been calculated

  16. Analysis of FCA-8 Values - Connecticut • The “line-line” TSA requirement for Connecticut is 7,273 MW • Adding the largest resource gives a total of 8,498 MW • The Connecticut zone has 9,768 MW of existing resources (i.e. 1,270 MW more than is needed to meet the objective criterion) • Using the objective criterion, the Connecticut zone would not be modeled for the Capacity Commitment Period

  17. Analysis of FCA-8 Values – NEMA/Boston • The “line-line” TSA requirement for NEMA/Boston is 2,788 MW • Adding the largest resource gives a total of 4,183 MW • The NEMA/Boston zone has 3,685 MW of existing resources (i.e. 498 MW less than is needed to meet the objective criterion) • Using the objective criterion, the NEMA/Boston zone would be modeled for the Capacity Commitment Period

  18. What if the Import Capability of a Zone has not been calculated? • A zone without defined import transfer capability could be evaluated based on its load and resources • Step 1 • If there is enough Existing Capacity in the zone (considering no import capability) to meet the requirement plus the largest resource, then the zone would not be modeled • Step 2 • If some import capability is needed, N-1-1 power flow analysis can be used to identify whether the load can be served • This analysis would consider the appropriate resource unavailability • Simplified Example Zone Load Resources

  19. Analysis of FCA-8 Values – New Hampshire • Without accounting for import capability, the “line-line” TSA requirement for New Hampshire is 3,101 MW • Any import capability will reduce this requirement • Adding the largest resource gives a total of 4,346 MW • The New Hampshire zone has 4,396 MW of existing resources (i.e. 50 MW more than is needed to meet the objective criterion) • Using the objective criterion, the New Hampshire zone would not be modeled for the Capacity Commitment Period

  20. Analysis of FCA-8 Values – SEMA • Without accounting for import capability, the “line-line” TSA requirement for SEMA is 4,467 MW • Any import capability will reduce this requirement • Adding the largest resource gives a total of 5,155 MW • The SEMA zone has 6,358 MW of existing resources (i.e. 1,203 MW more than is needed to meet the objective criterion) • Using the objective criterion, the SEMA zone would not be modeled for the Capacity Commitment Period

  21. Analysis of FCA-8 Values – Rhode Island • Step 1 • Without accounting for import capability, the “line-line” TSA requirement for Rhode Island is 2,403 MW • Any import capability will reduce this requirement • Adding the largest resource gives a total of 2,951 MW • The Rhode Island zone has 2,155 MW of existing resources

  22. Analysis of FCA-8 Values – Rhode Island (continued) • Step 2 • The Rhode Island energy Load Zone has several transmission connections to the rest of New England • The Rhode Island zone would be analyzed under N-1-1 power flow conditions to determine whether the load can be served under the conditions associated with the objective criterion • If no transmission reliability violations associated with serving the zonal load are observed, then, using the objective criterion, the Rhode Island zone would not be modeled for the Capacity Commitment Period • If violations associated with serving the zonal load are observed, the Rhode Island zone would be modeled for the Capacity Commitment Period

  23. Analysis of FCA-8 Values – WCMA • Step 1 • Without accounting for import capability, the “line-line” TSA requirement for WCMA is 4,538 MW • Any import capability will reduce this requirement • Adding the largest resource gives a total of 4,863 MW • The WCMA zone has 4,444 MW of existing resources

  24. Analysis of FCA-8 Values – WCMA (continued) • Step 2 • The WCMA energy Load Zone has several transmission connections to the rest of New England and neighboring Control Areas • The WCMA zone would be analyzed under N-1-1 power flow conditions to determine whether the load can be served under the conditions associated with the objective criterion • If no transmission reliability violations associated with serving the zonal load are observed, then, using the objective criterion, the WCMA zone would not be modeled for the Capacity Commitment Period • If violations associated with serving the zonal load are observed, the WCMA zone would be modeled for the Capacity Commitment Period • Note that, because of its connectivity to six other Load Zones, WCMA is expected to be the starting point for the system Rest-of-Pool Capacity Zone

  25. Analysis of FCA-8 Values – Vermont • Step 1 • Without accounting for import capability, the “line-line” TSA requirement for Vermont is 1,253 MW • Any import capability will reduce this requirement • Adding the largest resource gives a total of 1,305 MW • The Vermont zone has 527 MW of existing resources (Assumes that Vermont Yankee is retired)

  26. Analysis of FCA-8 Values – Vermont (continued) • Step 2 • The Vermont energy Load Zone has several transmission connections to the rest of New England and neighboring Control Areas • The Vermont zone would be analyzed under N-1-1 power flow conditions to determine whether the load can be served under the conditions associated with the objective criterion • If no transmission reliability violations associated with serving the zonal load are observed then, using the objective criterion, the Vermont zone would not be modeled for the Capacity Commitment Period • If violations associated with serving the zonal load are observed, the Vermont zone would be modeled for the Capacity Commitment Period

  27. Trigger to Model Export-Constrained Zones • The quantity of Existing Capacity Resources in a zone may cause the zone to be export-constrained • The addition of New Capacity Resources may cause a zone to become export-constrained or may worsen an export constraint • When analyzing export-constrained zones, consideration will be given to the quantity of applications for New Capacity interconnections • For FCA-9, Maine will be evaluated as a potential export-constrained zone

  28. Modeling Export Constrained Zones • What is the required export capability if the load is 2,000 MW and the Existing and New Resources total 4,000 MW? • The unavailability factor of the Resources should be considered (assume 5%) • Available Resources = 3,800 MW • In this example, the export capability needs to be 3,800 – 2,000 = 1,800 MW to avoid locked-in capacity • If the export capability is less than 1,800 MW, then the zone would be modeled for the Capacity Commitment Period • Simplified Example Zone Export Capability = ? MW Load = 2,000 MW Existing Resources = 3,000 MW New Resources = 1,000 MW

  29. Steps to implementation

  30. ISO Proposal for The Management of Capacity Zones • In Market Rule 1, Section 12, add automatic trigger(s) for the modeling and creation of Capacity Zones • For FCA-9 Capacity Zones would be created by implementing the objective criteria (automatic trigger) using the existing 8 energy Load Zones as the starting point • The objective criteria for the automatic creation of Capacity Zones would be based on the “line-line” TSA-like analysis of the energy Load Zone along with security constrained import analysis • The 8 energy Load Zones will serve as an approximation of the real transmission operating boundaries • Energy Load Zones that do not exceed the automatic trigger will be collapsed into the Rest-of-Pool Capacity zone • For FCA-10 and beyond, incorporate the analysis of appropriate zonal boundaries into the annual process used to calculate transfer limits for RSP and NERC statutory requirements • The automatic trigger would continue to define whether the zone would be created

  31. ISO Proposal for The Management of Capacity Zones, continued • In conducting compliance transfer capability analysis pursuant to NERC Standard FAC-013-2, include the review of whether new interfaces should be added based on submitted or potential retirements/delists • Add to Attachment K the presentation of annual transfer capability assessments as part of the annual RSP process • Zones to be modeled for each Capacity Commitment Period will be evaluated annually as part of the planning process and described in the Regional System Plan • Once a zone is modeled in the FCA, it will persist in the subsequent reconfiguration auctions and bilateral transaction windows for that Capacity Commitment Period • No change to bilateral trading rules

  32. Steps to Completion • Changes to Market Rule 1 Section 12 • Reliability Committee • Changes to Attachment K • Transmission Committee • Conforming changes to Market Rule 1 Section 13 • Markets Committee • FERC Filing

  33. Schedule for Implementation Implementation for FCA #9: * FERC Order to be received after opening of the Show of Interest Window but before New Capacity Qualification Deadline and De-list Bid Deadline

  34. Appendix:Other elements of the iso proposal (previously Presented) • Al McBride • MANAGER, AREA TRANSMISSION PLANNING

  35. FAC-013-2 • NERC Standard FAC-013-2 ensures that Planning Coordinators have a methodology for, and perform an annual assessment to identify potential future Transmission System weaknesses and limiting facilities that could impact the Bulk Electric System’s ability to reliably transfer energy in the Near-Term Transmission Planning Horizon • In New England, when identifying potential future Transmission System weaknesses, consideration will be given to rejected delist bids, generation retirements or other changes in system conditions • Near-Term Transmission Planning Horizon = the transmission planning period that covers years one through five.

  36. Alignment of Planning Processes • NERC FAC-013-2 activities have been brought in alignment with: • FERC 715 reporting of various aspects the transmission system and the transmission planning process • The calculation of future transmission limits needed for various activities and documented in the Regional System Plan • The following slide contains the most recent presentation of transfer capabilities that were provided to the Power Supply Planning Committee at their June 3, 2013 meeting

  37. RSP13 Base Interface Limits Notes are discussed in Appendix 1 of this presentation

  38. Assessment of New Interfaces • NERC FAC-013-2 activities will be further enhanced to incorporate the examination of future Capacity Zones and associated transfer capabilities • The transfer capability assessment will include the review of whether additional interfaces would be required in the case of submitted or potential resource retirements or delists

  39. Attachment K • Attachment K of the ISO New England Open Access Transmission Tariff (OATT) describes the Regional System Planning (RSP) Process in New England • According to Attachment K, the RSP shall, among other things: • describe, in a consolidated manner, the assessment of the PTF system needs, the results of such assessments, and the projected improvements; • provide the projected annual and peak demands for electric energy for a five-to ten-year horizon, the needs for resources over this period and how such resources are expected to be provided; • specify the physical characteristics of the physical solutions that can meet the needs defined in the Needs Assessments and include information on market responses that can address them; and • provide sufficient information to allow Market Participants to assess the quantity, general locations, operating characteristics and required availability criteria of the type of incremental supply or demand-side resources, or merchant transmission projects, that would satisfy the identified needs or that may serve to modify, offset or defer proposed regulated transmission upgrades.

  40. Attachment K, continued • According to Attachment K, one of the triggers for a Needs Assessment is: • constraints or available transfer capability limitations that are identified possibly as a result of generation additions or retirements, evaluation of load forecasts or proposals for the addition of transmission facilities in the New England Control Area • In addition, Needs Assessments are conducted for Rejected Non-Price Retirement Requests and De-List Bids • On-going Needs Assessments reflect Resources with Non-Price Retirement Requests or Permanent De-List Bids as unavailable for reliability • New Needs Assessments may be initiated

  41. Proposed addition to Attachment K • The annual Transfer Capability Assessment, conducted pursuant to NERC Standard FAC-013-2, and the identification of any new interfaces will be a part of the annual RSP process • The annual assessment will include the consideration of the addition of new interfaces that would result from submitted or potential retirements/delists of resources and changes to the transmission system

  42. Requirements Calculations • A new interface and associated zone will be included in the preparation for a given FCA if the transfer capability analysis is complete in time for the requirement calculation process for the FCA • Zones that do not trigger the automatic criteria are merged into the Rest-of-Pool Capacity Zone • The requirements calculations for the new Capacity Zone will follow the normal stakeholder review process used for FCA requirements calculations • The LSR and MCL requirements calculations for import- and export-constrained zones will be unchanged • The “higher-of” the Transmission Security Assessment and the Local Resource Adequacy will be used to set LSR

  43. FERC Filing • The zonal requirement of any new Capacity Zone, along with the associated transfer capability will be included in the pre-FCA FERC filings

  44. Vermont ZoneExample of How a New Zone Could be Evaluated in the Planning Process • In response to repeated requests to de-list generation in Vermont, the ISO had begun the process of defining an interface and calculating a transfer capability into Vermont • The ISO will evaluate the modeling of a Vermont zone in FCA-9 • In response to a request to retire generation • Will be discussed in the RSP process in 2014 • Vermont Zone

  45. SEMA/RIExample of How a New Zone Could be Evaluated in the Planning Process • SEMA/RI is a good example of why the energy Load Zone boundaries are not necessarily useful interfaces for modeling Capacity Zones • Some are perhaps counter-productive • For FCA-10 and beyond, the planning process can evaluate the addition of a more appropriate interface to manage the issues that could drive the need for a Capacity Zone • SEMA/RI – FCA-5 Values • 90/10 Load = 6,235 MW • Resources = 9,360 MW ? SEMA RI ?

  46. Minimum Zone Size • The zones modeled in PJM and New York are relatively large (many 1,000s MW) • Many zones are merged together in the absence of triggering the objective criteria • ISO New England proposes to remain focused on the more significant load serving constraints • Interregional Operating Limits (IROLs) • Rule-of-thumb minimum IROL size is 1,200 MW of transfer capability or served load

  47. The Role of Market Resource Alternatives • Market Resource Alternatives (MRAs – also known as Non-Transmission Alternatives or NTAs) are, by definition, a consideration in long-term transmission planning space • If MRAs become committed through the Forward Capacity Market or appropriate contract, they would be reflected in the zonal modeling process • The energy efficiency forecast, as an MRA, is already included in the analysis of expected future system conditions • Once completed, the forecast of Distributed Generation development, as an MRA, will be included in the analysis of expected future system conditions

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