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Transcript of Ontario Electricity Supply Forum PEO Mississauga Chapter - September 6, 2007 Rhonda Wright-Hilbig,...
Ontario Electricity Supply ForumPEO Mississauga Chapter - September 6, 2007
Rhonda Wright-Hilbig, P.EngMarket Analysis - IESO
The IESO’s Role Within the Industry
• There are a number of different entities but all of them have their own set of accountabilities and defined responsibilities
• The IESO manages Ontario's electricity grid - directing the flow of electricity across the transmission system to meet the province's power needs
• We balance this demand for electricity against available supply through the wholesale market
The Electricity Markets
• Approximately:– 30,000 MW installed capacity– 28,000 km high voltage transmission system– 250 authorized market participants
• Anyone connected to high voltage grid must become an IESO market participant
• Anyone connected to a Local Distribution Company (LDC) has a choice to become an IESO market participant or participate retail market
Ontario’s Electricity Market
Real-time
EnergyEnergyOperating Operating ReserveReserve
Transmission Transmission RightsRights
Ancillary Ancillary ServicesServices
Procurement
Financial Physical
IESO - Administered MarketsIESO - Administered MarketsIESO - Administered MarketsIESO - Administered Markets
The Markets
Electricity Sector Participants
ParticipantsOutsideOntario
Local Distribution Company Network
Embedded LargeCustomer
EmbeddedGenerator
Wholesale Wholesale PricePrice
Low Volume End-use
Consumer
DesignatedConsumer
RPPRPP
Directly ConnectedGenerator
Directly ConnectedLarge Consumer
Transmitters
Retailers
Types of Market Participants
Adjust operations Adjust operations based on dispatch based on dispatch
instructions received instructions received from the IESOfrom the IESO
Submit bids/offersSubmit bids/offers
DISPATCHABLEDISPATCHABLE
Consume or produce as Consume or produce as desired – no dispatch desired – no dispatch
instructionsinstructions
Do not submit Do not submit bids/offers – accept bids/offers – accept
market pricemarket price
NON-DISPATCHABLENON-DISPATCHABLE
Generators and Generators and ImportsImports
Offers Loads and Loads and ExportsExports
Bids
IESO - Administered
Markets
Real-time Energy
Bid and Offer Basics
Price ($/MWh)
Quantity (MW)
$18.00
$20.00
0 40 80
$26.00
20 60 100
$24.00
$22.00
120
(20.5,20) (22,60)(21.6,40) (24,100)(23,80) (24.5,120)(20.5,0)
Price/Quantity Pairs - Offers
Setting the Market Clearing Price
Supply and Demand Determines Price
Optimum Selling Price
Price
Quantity
SupplyDemand
12000
13000
14000
15000
16000
17000
18000
19000
20000
21000
Demand Varies Considerably
Sun. Mon. Tues. Wed. Thurs. Fri. Sat.
TimeTime of of
DayDay
Weekend vs. Weekend vs. WeekdayWeekday
Ontario Demand by Day of the Week for typical October Week
Move to a Summer Peaking Jurisdiction
20,000
21,000
22,000
23,000
24,000
25,000
26,000
27,000
28,000
1994 1996 1998 2000 2002 2004 2006
Year
Peak O
nta
rio D
em
and (
MW
)
Summer Peak Demand Winter Peak Demand
Generator 3
50 MW - $25/MWh
Generator 1
150 MW - $38/MWh
100 MW - $15/MWh
Generator 2
50 MW - $20/MWh
Setting the Market Clearing Price
Offers Are Selected Economically
50 MW
100 MW
150 MW
200 MW
$15 / MWh
$20 / MWh
$25 / MWh
$38 / MWh
12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00
Quantity
Time
Generator 1 Generator 2 Generator 3
20:00
250 MW
Demand and Price
50 MW
100 MW
150 MW
200 MW
$15 / MWh
$20 / MWh
$25 / MWh
$38 / MWh
12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00
Generator 1 Generator 2 Generator 3
20:00
250 MW
Demand
$38$38
$15$15
$25$25
Quantity
Time
50 MW $15 / MWh
$20 / MWh
$25 / MWh
$38 / MWh
16:00 16:05 16:10 16:15 16:30 16:35 16:40 16:45
TimeTime
17:0016:20 16:25 16:50 16:55
MCP$ / MWh
100 MW
150 MW
200 MW
250 MW
Offers and Demand - 5 Minute Intervals
Generator 1 Generator 2 Generator 3
Hourly Ontario Energy Price = $30.42Hourly Ontario Energy Price = $30.42
$25 $25 $25 $25 $25 $25 $25 $38 $38 $38$38$38
Determining Dispatch Instructions
Balancing
DemandDemandSupplySupply
60 Hz60 Hz
Generators + Imports Loads + Losses + Exports
Ensure that supply meets demand within system limits
Security Limits
• Security limits are the reliability envelope in which the market operates; they protect our grid and our neighbours’ grids from disturbances
• Energy will take all available paths to get from supply point to consumption point
• Transmission lines do not control or limit the amount of energy they convey
• Energy flows are managed by dispatching generator output
• Different limits are used under different operating conditions
Prices and Schedules
• Dispatch follows economics as closely as possible• Can’t dispatch based purely on economics
– The unconstrained mode of the dispatch algorithm determines market clearing prices and “market schedules” in the absence of transmission constraints
• “copper plate” model of the grid• Assumes resources can ramp at three times their offered ramp rates
(September 12, 2007)
– The constrained mode of the dispatch algorithm determines dispatch schedules (i.e., dispatch instructions)
• Respects transmission losses, transmission system limits, ramp restrictions on resources
• When a difference in MW occurs between the economic “market schedule” and the practical “constrained schedule” market participants are held whole through Congestion Management Settlement Credits (CMSC)
• The cost of CMSC is recovered through the IESO uplift to loads
Dispatch instructions
• Dispatch instructions:– Primary method for controlling the balance of
supply with demand
– Indicate operating point at the end of a 5-minute interval
– Are sent only if there is a required change in operating point
– Can be refused for reasons of public or worker safety, equipment damage, or legal requirements
Imports and Exports
Imports and Exports
Scheduling Imports and Exports
• Imports and exports are scheduled based on economics compared to internal bids/offers
• Scheduled an hour in advance, scheduled for a one hour block
• Participants must navigate with other jurisdictions, including transmission access
• Electricity interchange improves Ontario reliability, – Imports reduce the price of electricity in Ontario,
effectively add supply– Exports effectively increase demand; exports can be
curtailed in the event of Ontario shortages
Contact us
• IESO website provides up to date prices• IESO publications available to help
businesses understand the market
IESO•1 (888) 448-7777 or •(905) 403-6900•[email protected]
Ontario Electricity Supply ForumPEO Mississauga Chapter - September 6, 2007Rhonda Wright-HilbigSection Head, Market AnalysisSeptember 6, 2007