Update on CAISO / PacifiCorp Energy Imbalance Market Presentation to WECC Seams Issues & Market...

Update on CAISO / PacifiCorpEnergy Imbalance Market

Presentation to WECC Seams Issues & Market Issues Subcommittees

October 10, 2013

Jim Price, Senior Advisor, Market Development & Analysis, CAISO

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

Presentation overview: PacifiCorp implementation and EIM stakeholder process are in progress

Implementation agreement

System testing market simulation

2013 2014

FERCreview

Implementation work

Filing

FERCreview

Go live 10/1/2014

tariff language

Process Merger

Board authorization

11/8/2013

FERC acceptance

Filing 4/30/2013

Board authorization

3/20/2013

FERC acceptance 6/28/2013

EIM stakeholder process

Stakeholder meetings:4/11/2013 – Folsom6/6/2013 – Folsom7/9/2013 – Phoenix

8/20/2013 – Portland9/30/2013 – Folsom

March 2012: CAISO proposed a scalable approach for implementing Energy Imbalance Market (EIM)

• No critical mass required – each participant can enter EIM when ready

• Preserves participants’ autonomy and current practices

– Balancing authorities balance and provide their own ancillary services

– Balancing authorities can trade bilaterally

– Participants retain all physical scheduling rights

– Flexible modes of participation are available

BAA 1

BAA 2

BAA 3

CAISO proposed a scalable approach for implementing Energy Imbalance Market (EIM)

BAAs

network modeling

transmission monitoring

bidding/self-scheduling

intra-hour dispatch

settlements

Benefits of Energy Imbalance Market

• Leverages existing CAISO market

• Enhances reliability through improved situational awareness in CAISO and EIM footprint

• Captures the benefits of geographical diversity of load and resources

• Potentially reduces reserve requirements

• Provides easy entry/exit for EIM participation

Major changes through stakeholder process include:

• Refined definitions and roles of participants

• Replaced initial processes with process for EIM Participating Resources to submit hourly base schedules and resource plans via Market Operator, with EIM Entity review and adjustments

• Several refinements in offset & neutrality cost allocations

• Refined under- and over-scheduling provisions

• Provisions for unit commitment and flexible ramping

• Refined approach for Greenhouse Gas (GHG) compliance

Energy Imbalance Market key definitions

EIM Entity is a balancing authority, representing one or more EIM Transmission Service Providers that make transmission available to EIM, that enables the EIM to occur in its balancing authority area (BAA). By enabling the EIM, real-time load and generation imbalances within its BAA will be settled through the EIM.

• EIM Entity determines eligibility of resource types, and required transmission service, within its BAA. (15-minute economic bids on its interties? Dynamic transfers?)

EIM Participating Resource is a resource located within the EIM Entity BAA that is eligible and elects to participate in the EIM.

• In the 5-minute market, eligible resources may include generators, participating loads & demand response, non-generator resources, and dynamic transfers.

• In the 15-minute market, imports and exports may also be eligible.

EIM builds on FERC Order 764 for financially binding 15-minute functions in real-time market

CAISO EIM

Day Ahead Schedule

15-Minute Unit Commitment & Energy Schedule, and Incremental AS Awards

Real-Time Dispatch

15-Minute Unit Commitment & Energy Schedule

Real-Time Dispatch

Base Schedule(basis of financial

settlement)

Market input data

• As needed– Resource operational characteristics

– Network model topology

– Static contingencies observed

• Prior to operating hour (T-75 minutes)– Economic bids and hourly base schedules

• Ongoing– Transmission and generation outages

– 15-minute base schedules

– Load and VER forecasts– Dynamic contingency list– Actual ETC/ATC scheduling limits and ETC uses

EIM design includes functionality to submit base schedules and review/approve resource plans

CReal-Time Market

Application

- CMRI -EIM Balance &

Feasibility Reports

Balance & Feasibility ResultsPowerflow(balance & feasibility)

Base Schedules

Base Schedule

- SIBR -EIM Base Schedules

Rules & workflowParticipating

resources

Non-participating

resources

Base Schedules Visibility & override

EIM Entity

supply/load MW mismatch, supply and load base schedules,

network flow MW overloads

Financially Binding Base Schedules


Loads


Base Schedules

Timeline: Submission of hourly base schedules and resource plans

EIM Entity Scheduling Coordinator has full visibility of all base schedules at all times.

Market 1 Market 2 Market 3 Market 4

T-75: Deadline for EIM Participating Resources to submit real-time bids & base schedules.Market Operator publishes advisory results at T-60. (Balanced? Feasible transmission?

Sufficient flexible ramping?)Base schedules can be revised up to T-55.

T-45: Market Operator publishes advisory results.T-40: EIM Entity may adjust base schedules.

T-20: E-Tag deadline for intertie hourly transmission profile and energy schedule for Market 1

T

T = Start of the Hour

T-37.5: Start of Market 1 optimization

Load Scheduling

• Options for load forecast for establishing base schedule:– Use ISO forecast, or– Use EIM Entity’s forecast, subject to under- & over-scheduling

charges when errors exceed 5% threshold

• EIM Entity defines Load Aggregation Points (LAPs)– For example, internal to the CAISO LAPs are defined by large

utility service territories– The number of LAPs must be weighed against the availability of

multiple granular load forecasts

• CAISO will determine Load Distribution Factors (LDFs) using its state estimator– CAISO uses LDFs to distribute LAP forecast to individual nodes

within the network model.

Base schedule should be balanced prior to start of real-time market

Load forecast from prior slide

Resource plans: base schedules– Self-scheduled resources– Intertie schedules– Base generation schedules

Resource plans also include:– Ancillary services reservations protected from dispatch– Operational characteristics (e.g., ramp rate)– Economic Bids

=

Base schedule must be balanced or they will be adjusted prior to start of EIM.

Ancillary service requirements

• EIM Entity remains responsible for meeting ancillary services requirements per NERC and WECC, dispatching contingency reserves, and managing load reductions

• Reserve deployment & sharing schedules– Capacity to meet reserve sharing obligations is included in the

resource plans used for base schedules. The capacity is protected for dispatch through EIM.

– EIM Entity is responsible for its share of DCS compliance– EIM Entity deploys operating reserves and regulation in

conformance with NERC, WECC, and reserve sharing group policies– If reserves are dispatched, they will be subject to EIM imbalance

settlement until reflected in the base schedule

Market optimization uses the economic bids submitted at T-75 minutes

• CAISO will provide advisory feedback on schedules up to the binding 15-minute market, so base schedules can be developed without congestion

• 15-minute process builds on FERC Order No. 764– Multi-interval Security Constrained Unit Commitment, with 15-

minute interval granularity– Imbalance energy = difference between base schedule and 15-

minute schedule

• 5-minute dispatch process– Multi-interval Security Constrained Economic Dispatch, with 5-

minute interval granularity– Imbalance energy = difference between 15-minute schedule and

5-minute dispatch

Congestion management

• CAISO will manage congestion in EIM by automatically activating constraints, before flows approach capacity– This allows the EIM dispatch to try and resolve the congestion– Alerts the EIM Entity that they may be required to initiate UFMP– Once activated, constraint will be enforced to maintain flows

below the limit

• EIM will coordinate with WECC’s Unscheduled Flow Mitigation Procedure (UFMP) and Enhanced Curtailment Calculator (ECC)– If EIM Entity initiates UFMP, CAISO will reflect the affected

schedules in EIM dispatch, and enforce constraint limits as requested by RC.

EIM Entity identifies resource constraints to address reliability issues which cannot be modeled

• CAISO will not issue exceptional dispatch instructions to EIM Entity resources

• CAISO’s dispatch will reflect reliability constraint within EIM area until the base schedule can be updated

• Any resource constraint for reliability will be settled at the EIM LMP

Publication of prices and other information

• Locational marginal prices for 15-minute market and RTD will be published on OASIS for all nodes and LAPs.

• Binding transmission constraints and shadow prices will be published on OASIS– LMP marginal cost of congestion component reflects congestion

contribution from binding network constraints

• Additional market data will be published as in ISO market– Some data are subject to a non-disclosure agreement

EIM settlement and accounting

• Settlement metering is required for generators. Options:– CAISO Metered Entity, Scheduling Coordinator Metered Entity

• Allocation of uplift costs will minimize comingled charges between ISO and EIM Entities to the extent possible.

• Unaccounted-for energy

• Inadvertent energy– CAISO will maintain a dynamic schedule to track energy between

EIM Entities and CAISO• Net scheduled interchange change every 5 minutes through the

dynamic schedule to ensure AGC control accuracy• Hourly energy is updated on the e-Tag within 60 minutes of the end of

the operating hour

– EIM Entity responsible for tracking and administering payment for inadvertent energy via WECC process

EIM administration

• Administrative Costs– Administrative rate of $0.19 per MWh volume as calculated by:

• Generation = max (5% of gross generation, generation imbalance energy), plus

• Load = max (5% gross load, load imbalance energy)

– Startup costs equal $0.03 times an EIM Entity’s total annual energy usage

• Forecasting Services– CAISO load forecast is included in Administrative Rate– VER forecasting available for $0.10 per MWh

• Dispute resolution is through Customer Inquiry, Dispute and Information (CIDI)

• Market monitoring provided by CAISO

Transmission Service

• Transmission capacity is made available through EIM Entities, and communicated through dynamic e-Tag and transmission registry:– EIM Participating Resources can offer their contracted capacity– Network service within EIM Entities allows redispatch up to available

network capacity– TSPs make uncommitted capacity available

• Reciprocity: Since transfer capability will be limited, as made available through EIM Entities, initial design proposes no charge for transmission for EIM transfers between EIM Entities

• EIM stakeholder process will continue discussion of transmission rate design for EIM transfers

CAISO is committed to ensuring EIM design will properly account for Greenhouse Gas (GHG) costs

• Entities that import energy to California have obligation to surrender compliance instruments to California Air Resources Board (CARB)

• ISO will inform EIM Participating Resources of their net incremental EIM transfers to California for CARB compliance

• The market optimization will consider GHG costs using GHG bids submitted by EIM Participating Resources

Process for New EIM Entities

• Encourage interested parties to engage as early as possible– Implementation details depend on system complexity and timing

of commitment

• Future implementations will occur on an annual commitment cycle with 12-18 month lead time– Implementation requires significant network modeling changes– Must align with CAISO spring and fall software release cycle

• New entrants pay start up fee ($0.03 per MWh of demand)– Payment will be established through implementation agreement

filed with FERC

Guiding objectives for governance drive toward a long-term independent EIM

Independent EIM structure

Stakeholder Transition CommitteeRoles:•Advise on EIM matters•Propose independent EIM structure

Prompt & direct input

Adaptable structure

Promote successful implementation

STEP 1 STEP 2

Update on CAISO / PacifiCorp Energy Imbalance Market Presentation to WECC Seams Issues & Market...

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