Energy Imbalance Market Overview - OATI · Energy Imbalance Market Overview Presentation to:...

ISO PUBLIC – © 2016 CAISO

Energy Imbalance Market Overview

Presentation to:

Portland General Electric

EIM OATT Stakeholder Meeting

David Timson

Account Manager

CAISO Strategic Alliances

October 14, 2016


Topics for Discussion

ISO overview

Why have an EIM

Definitions

Basic operation and timing

Balance and feasibility tests

Market settlements

Transmission service

Changes with EIM

Governance

Slide 2


• Operate transmission Balancing Authority Area

• Matches generation with load and maintains electric frequency of the grid

• Runs day-ahead and real-time markets for energy and ancillary services

• Manages energy imbalance market across participating areas

• Maintain reliability

The ISO is a not for profit public benefit corporation.

Our responsibilities:

• Plan for system expansion

• Interconnect resources

• Implement state’s energy policies

Slide 3


California ISO by the numbers

• 68,200 MW of power plant capacity (net dependable capacity)

• 50,270 MW record peak demand (July 24, 2006)

• 27,500 market transactions per day

• 26,000 circuit-miles of transmission lines

• 30 million people served

• 240 million megawatt-hours of electricity delivered annually

Slide 4


Resource mix

May 2016

Slide 5


Western Electricity Coordinating Council (WECC)

CA is one of 14 states within

WECC

The ISO is one of 38 Balancing

Area Authorities within WECC

Resource sharing enhances

reliability, helps achieve

renewable targets and

manages cost

25% of all the electricity that keeps

the lights on during the summer

comes from other areas in the west

including parts of Canada and

Mexico

Slide 6


Changing resource mix over the next 10 years

presents new operational challenges

• Over 20,000 MW of wind and solar capacity is expected to be

interconnected by 2020 – Increased supply volatility

• Potential changes to load patterns as a result of distributed

generation and electric vehicles – Changing, less

predictable load patterns

• Approximately 18,000 MW of thermal generation will be

repowered or retired by 2020 – Uncertainty surrounding

thermal resources

o Phase out 12,000 MW of coastal plants with once-through

cooling

o Greenhouse gas reductions limit replacement generation

o Water flow management affects hydro availability

Slide 7


Power industry transformation

Goals:

Higher expectation

of reliability

Higher expectation

of security

Smart Grid

Situational

awareness through

Visualization

Main Drivers:

California RPS

GHG reduction

Once-through-cooled

plants retirement

Wind

• Unpredictable Output

• 4769 MW Peak – April 12, 2014

Solar Thermal / Photo Voltaic

•Semi – Predictable Output

•8136 MW Peak – July 26, 2016

Roof Top Solar

• Semi – Predictable Output

• Behind the meter – Residential

• 3500 MW Estimated Capacity

Slide 8


Hydro vs. solar monthly production --- 2012 through

October 2015

Slide 9

0

500

1,000

1,500

2,000

2,500

3,000

3,500

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O

2012 2013 2014 2015

GW

h

Hydro vs. Solar Monthly Production

Hydro Production Solar Production


Energy Imbalance Market is an easily-scalable

extension of real-time market to broader region

• Builds on existing market: automated

dispatch facilitates renewable integration,

resolves imbalances & avoids congestion

• Situational awareness enhances reliability

• FERC staff paper assessed EIM

reliability benefits: http://www.caiso.com/Documents/QualitativeAssessment-

PotentialReliabilityBenefits-WesternEnergyImbalanceMarket.pdf

• No critical mass required. No exit fees

• Easily scalable, low-cost, low risk,

voluntary option for new participants

• Preserves BAA autonomy, including

compliance, balancing, and reserve

obligations

• Benefits increase with more transfer

volume between BAAs

Slide 10

http://www.caiso.com/Documents/QualitativeAssessment-PotentialReliabilityBenefits-WesternEnergyImbalanceMarket.pdf






Benefits from the Energy Imbalance Market are

consistent with earlier analysis and growing

Entity Q4

2014

Q1

2015

Q2

2015

Q3

2015

Q4

2015

Q1

2016

Q2

2016

Savings

(Million $)

ISO 1.24 1.45 2.46 3.48 5.28 6.35 7.89 28.15

PacifiCorp 4.73 3.81 7.72 8.52 6.17 10.85 10.51 52.31

NV Energy 0.84 1.70 5.20 7.74

Total 5.97 5.26 10.18 12.00 12.29 18.90 23.60 88.20

• Reduced renewable energy economic curtailment displaced

greenhouse gas emitting resources:

• In Q1, reduced 48,342 metric tons of CO2

• In Q2, reduced 67,930 metric tons of CO2

• Reduced flexible ramping requirements across footprint –

35-36% savings during 2016

Slide 11


Transfers among areas

Slide 12


Wind/Solar avoided curtailment has significantly increased

due to EIM.

Slide 13

ISO began tracking

avoided curtailment

since Apr 2015.

Avoided curtailment

began to increase

significantly after NV

Energy joined the

EIM in Nov 2015.


EIM Interties

Slide 14


Several key roles are involved in enabling EIM participation

EIM Entity is a balancing authority that enables EIM to occur in its area.

By enabling EIM and coordinating with its area’s loads, resources and

transmission service providers, all load and generation imbalances within

its area will settle through the EIM.

EIM Entity Scheduling Coordinator coordinates and facilitates EIM for one

or more EIM Entities, and is responsible for resource plans and financial

settlements on behalf of non-participating resources and loads.

Base Schedule Coordinator submits base schedules and resource plans.

EIM Transmission Service Provider controls transmission in the EIM Entity

BAA, and voluntarily informs EIM Entity that it is making its transmission

available for EIM.

EIM Participating Resource is a resource within the EIM Entity

represented by a Scheduling Coordinator that voluntarily offers economic

bids for availability in EIM’s real-time market, subject to EIM Entity’s

eligibility requirements.

EIM Participating Resource Scheduling Coordinator is certified to bid in

ISO markets, submits bid, reports outages, and receives settlements and

invoices.

ESC

PRSC

Slide 15


EIM entities and participating resources determine key

aspects of participation

Slide 16

• EIM Entity determines:

• Eligibility of resource types

(generators, participating loads &

demand response, non-generator

resources, etc.)

• Types of eligible dynamic transfers

(dynamic schedules, pseudo-ties)

• Requirements of transmission service

within its BAA

• Definition of Load Aggregation Points

• Settlement of EIM charges or credits

to entities within its BAA

• EIM Participating

Resource determines:

• Voluntary registration to

participate in EIM

• Hour-to-hour quantity and

price of economic bids


A resource is

dispatched at its

location, and is paid

the nodal price

Load pays the weighted

average price of all load

nodes in the Load

Aggregation Point (LAP)

Basics of EIM Operation & Settlement

Base schedule: Forward energy

schedule, including hourly load

forecasts, generation schedules,

and interchange schedules, form

the baseline for EIM financial

settlements.

Resource plan: How to balance

supply and demand and ensure

resource sufficiency:

• Load, generation, and

interchange base schedules

• Energy bids from participating

resources

• Ancillary service plans

Other inputs: Outages, telemetry,

transmission capacity

Slide 17



Slide18

Compile

Hourly

Resource

Plan

Demand Forecast

Variable Energy Forecast

Transmission Outages

Generation Outages

Transmission Limits

Non-participating

resource hourly

base schedule

Hourly interchange

schedules

Participating resource

hourly base schedule

Participating

resource

energy bid range



Slide 19

EIM

15-Minute

Market

Demand Forecast



Generation Outages

Transmission Limits

Economic Bids

15-Minute

Schedule

Unit

commitment

for short-

start

resources



Slide 20

EIM

5-Minute

Dispatch

Demand Forecast



Generation Outages

Transmission Limits

Economic Bids

Dispatch

Instructions

State Estimator



Slide 21

EIM

Settlement

Hourly Base Schedule

15-Minute Schedule

5-Minute Dispatch

Meter

EIMPR SC

Settlement

Statement

EIM Entity SC

Settlement

Statement for

EIMNPR and

load

EIM Entity SC

Settlement

Statement for

EIM BAA

Neutrality


After advisory feedback period, interactive resource

sufficiency evaluation prevents “leaning” among BAAs

15-minute dispatch intervals

(4.5 hour look-ahead)

T-75: Base schedules and energy bids due

T-55: Updated base schedules submitted

T-20: E-tagging deadline

(Entity SC)

T

(T = start of the hour) T-60: Results of sufficiency test published (Balanced?

Feasible transmission? Sufficient flexible ramping?)

T-45: Results of sufficiency test

published

T-40: Final opportunity to submit base

schedules (Entity SC)

T-37.5: Start of Market 1 optimization

X:00 X:30 Y:00 X:15 X:45

T-22.5: 15-minute scheduled awards published

Market

Operator

EIM Market

Participants

5-minute dispatch intervals

(65-minute look-ahead)

Resource

sufficiency

tests:

Balanced

load and

generation?

Free of

congestion?

Sufficient

ramping

capability?

Slide 22


EIM Tests

Balancing

Capacity

Flexible ramp sufficiency

Feasibility

Slide 23


When loads deviate from their base schedules,

resources must be re-dispatched to maintain

balance.

Meter = 17 MW

Uninstructed

Imbalance

Energy = 2 MW.

Charge for

under-scheduling

2 MW energy

Base S

chedule

= 1

5 M

W

Base S

chedule

= 1

5 M

W

Meter = 12 MW

Uninstructed Imbalance

Energy = 3 MW.

Payment for over-

scheduling 3 MW

energy

For loads, uninstructed imbalance energy is the

difference between the base schedule and the meter.

Slide 24


The ISO settles with scheduling coordinators, who allocate

payments and charges to the appropriate customers.

Market Operator settles

deviations of EIM

Participating Resources

from base schedules at

LMP of resource locations.

For resources that do not

participate in EIM, Market

Operator settles with EIM

Entity Scheduling

Coordinator who is

responsible for settlement of

Non-PR deviations from their

base schedules.

Slide 25


Real-time energy charge codes reflect cost causation. Primary settlement: instructed and uninstructed imbalance

energy.

Illustrative set of common charge codes (See

http://www.caiso.com/Documents/ISOMarketChargeCodesMatrix.xls)

Instructed Imbalance Energy (IIE)

Uninstructed Imbalance Energy (UIE)

Other settlements Bid Cost Recovery (ensures resources recover daily RT

costs, recovered within BAA with EIM Transfer considered)

Unaccounted for Energy (UFE)

Congestion Offset (neutrality accounts by BAA)

Marginal Losses Offset (neutrality accounts by BAA)

Imbalance Energy Offset (can shift costs or payments

between BAAs based on EIM Transfers)

Greenhouse Gas Emission Cost Revenue

EIM Administrative Charge

Slide 26


Settlement statement timeline provides prompt

clearing, with later changes limited to

unresolved disputes or FERC decisions

• Initial settlement statement – T+3B (uses estimated settlement

meter data)

• Recalculation settlement statement – T+12B, T+55B

– Disputes due T+26B, T+77B

• Recalculation settlement statement – T+9M through T+36M

(optional)

– Disputes limited to incremental charges only

Slide 27


Transmission service uses simple principles

• EIM Entities make transmission capacity available through dynamic

e-Tag:

• Network service within EIM Entities allows redispatch up to network

capacity

• EIM coordinates transmission usage with EIM participants’ Transmission

Service Providers (e.g., Bonneville Power Administration)

• EIM transfers respect both scheduling rights and actual flow constraints

• ISO constantly updates EIM Entities’ NSI to reflect EIM transfers

• Reciprocity: To consider bids equally on economic merit, there is no

incremental charge for transmission use associated with EIM

transfers between EIM Entities

• EIM maintains existing transmission rate structures within EIM Entities

Slide 28


What changes for reliability entities?

If you are:

Balancing Authority • Current NERC and WECC responsibilities

will not change

• May commit resources as they do today

• Manage interchange tagging

• Will be the EIM Entity

• Will submit balanced schedules to the

Market Operator (ISO)

• Will communicate outage and operating

limits information with Market Operator

Transmission Owner,

Transmission Operator,

Transmission Service

Provider (TSP)

• TSP determines available transmission

capability (ATC) and prior commitments,

to inform Market Operator of capacity

available for EIM Transfers

• No other change in role or responsibilities

Slide 29


What changes for market participants?

If you are:

Utility affiliated with EIM

Entity

• Submits load and resource information to

Market Operator as well as EIM Entity BA

Other Utility in EIM Entity

BAA

• Submits load and resource information to

Market Operator as well as EIM Entity BA

Resource (e.g., merchant

generator) in EIM Entity

BAA

• If electing to participate in EIM as an EIM

Participating Resource

• Communicate availability through SC

• Provide outage information to Market

Operator as well as EIM Entity BA

• Respond to dispatch instructions

Scheduling Coordinator • Submits bids and schedules for EIM

participants

• Receives settlement statements and invoices

from ISO

Slide 30


EIM Governing Body

• Five-member body that exercises delegated authority over the rules

of the western Energy Imbalance Market

• The five members must be independent of entities that participate in

the ISO market, including the EIM

• Members are selected by representatives of all EIM stakeholders

EIM Governing Body - seated June 28, 2016

Valerie Fong, (Retired) Director of Utilities, City of Palo Alto

Doug Howe, Consultant, Vanry & Associates

Carl Linvill, Principal, The Regulatory Assistance Project

John Prescott, (Retired) President and Chief Executive Officer,

Pacific Northwest Generating Cooperative

Kristine Schmidt, President, Swan Consulting Services

Slide 31


EIM body of state regulators and regional issues forum

Body of State Regulators

• Primary function is to learn about the EIM, EIM Governing Body and

related ISO developments that may be relevant to their jurisdictional

responsibilities

• Provides forum for education and discussion, offer opinions to EIM

Governing Body and ISO Board on matters of interest, represents 8

states

• Not restricted from taking any position before FERC, ISO BOG, or

any other forum concerning matters related to the EIM or ISO.

http://westernenergyboard.org/eim-bosr/what-we-do/

Regional Issues Forum

• Public vehicle for discussion of EIM-related issues, including

impacts to neighboring balancing authority areas

http://www.caiso.com/Documents/EIMRegionalIssuesForumMembers.pdf

Slide 32












Recap: EIM extends ISO‘s real-time market and

systems to EIM participants

• Optimized 15 and 5-minute interval dispatch accounts for

operating characteristics and constraints of participating

resources as well as the underlying transmission system

• Multi-interval look-ahead anticipates changes in system

conditions and ensure flexibility of dispatch to efficiently

manage system balance and congestion

• Short-term unit commitment allows efficient economic

dispatch, recognizing state-of-art renewable energy

forecasts, hydro limits, complexity of resources like

combined-cycle, and other factors

• The result is efficient use of transmission offered by EIM

participants & cost reduction to consumers

Slide 33


Resources available for EIM

• CBT - Introduction to the Energy Imbalance Market This Computer Based Training provides a high level overview of the Energy

Imbalance Market

http://content.caiso.com/training/Introduction%20to%20EIM/My%20Articulate%20Projects/Introduction%

20to%20the%20Energy%20Imbalance%20Market/player.html

• CBT - How the Energy Imbalance Market Works – This Computer Based Training describes the roles and responsibilities of the key

players in EIM and the business processes that will take place.

http://content.caiso.com/training/HowEIMWorks/player.html

• EIM Stakeholder processes and tariff filings http://www.caiso.com/informed/Pages/StakeholderProcesses/EnergyImbalanceMarket.aspx

• EIM Business Process Manual http://bpmcm.caiso.com/Pages/BPMDetails.aspx?BPM=Energy Imbalance Market

Slide 34

http://content.caiso.com/training/Introduction to EIM/My Articulate Projects/Introduction to the Energy Imbalance Market/player.html

http://content.caiso.com/training/Introduction to EIM/My Articulate Projects/Introduction to the Energy Imbalance Market/player.html

http://content.caiso.com/training/HowEIMWorks/player.html

http://www.caiso.com/informed/Pages/StakeholderProcesses/EnergyImbalanceMarket.aspx

http://bpmcm.caiso.com/Pages/BPMDetails.aspx?BPM=Energy Imbalance Market


For additional information please contact: David Timson CAISO [email protected]

Slide 35

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