SEPTEMBER 12, 2012 | MARKETS COMMITTEE
Hourly Offer and
Intraday Reoffers
Overview of Current Market Components
Aleks Mitreski
MARKET DEVELOPMENT
AMITRESKI@ISO-NE.COM (413) 535-4367
Presentation Objective
• This presentation is intended to provide high level overview of
the current Day-Ahead and Real-Time Energy Market offer
rules with focus on:
–
–
–
–
Timing and offer requirements in the DAM
Parameters used to formulate an offer in the DAM
Modification of offers during the Re-Offer Period
Supplemental commitments during the Resource Adequacy
Assessment
– Commitment and Dispatch of generators in real-time
– Parameter re-offer/re-declaration in real-time
2
Energy Markets Overview
Energy
Markets
Day-Ahead Energy Markets
(DAM)
DAM produces financially
binding schedules for the
production and consumption of
electricity (occurs on the day
before the operating day)
Real-Time Energy Markets
Real-Time Energy Market
balances differences between
the Day-Ahead scheduled
amounts of electricity and the
actual real-time requirements
3
Energy Markets Overview (cont.)
DA Energy
Market
results
published
Real-Time Energy Market
―16:00
―00:00
Real-Time
Energy
Market
starts
ReOffer
Period
OPERATING DAY
22:00―
18:00―
OPERATING DAY -1
16:00―
―12:00
DA Energy
Market
offer and
bid period
closes
Day-Ahead Energy Market
Initial RAA is
performed to
finalize
operating plan
for next day
RAA is
performed
throughout the
operating day
4
DAY-AHEAD ENERGY MARKET
Review of offer structure, clearing, obligations
Day-Ahead Energy Market
• The DAM allows participants to sell/purchase energy on a
forward basis
•
•
•
•
•
Load/Asset Related Demand
Virtual Transactions (Increments/Decrements)
Dispatchable Asset Related Demand
External Transactions (Imports/Exports)
Generators
• The DAM produces financially binding positions that are
satisfied through:
– Physical performance (i.e. delivery/consumption) in real-time, or
– Cash settlement at the Real-Time Price for Day-Ahead quantities not
delivered/consumed
6
Price Taker versus Price Sensitive Behavior
• Participants have the ability to participate in the energy
market as price-sensitive or a price taker (i.e.,fixed)
• A fixed demand in the market effectively represents a bid to
consume energy at any cost below $1,000 MWh
• A fixed supply in the market effectively represents an offer to
sell energy at $0 MWh
7
Participation – Load/ARD
• Load/ARD participate through Demand Bids only in the DAM
• Demand Bids can be submitted as:
– Fixed Demand Bid specifying quantity and location (one per hour) or
– An individual priced Demand Bid specifying price, quantity and
location
• Participants can submit up to 10 individual demand bids per location, per
hour
• The price range can be between $0 and $1,000 MWh
8
Participation – External Transactions
• External Transactions are submitted to capture energy flow
into New England (Import) or out to one of the neighboring
areas (Export) in the DAM and RTM
• External Transactions can be submitted as:
– Fixed External Transaction specifying quantity and external node
ranging in duration from one hour to 24 hours
– An individual priced External Transaction specifying price, quantity and
external node ranging in duration from one hour to 24 hours
• The price range can be between $0 and $1,000MWh
9
Participation – Virtual Transactions
• Virtual Transactions are a virtual supply Increments (INCs) and
virtual demand Decrements (DECs) only in the DAM
• Virtual Transactions can be submitted as;
– Up to 50 priced bid blocks per location, per participant
• The price range can be between $0 and $1,000MWh
10
Participation – Generators
• Generators participate by submitting Supply Offer with
physical and financial parameters in the DAM and RTM
Physical Parameters
(sample)
Time
Interval
Financial Parameters
(sample)
Time
Interval
Emergency Min
Hourly
Economic Min
Hourly
Start Up Fee
Daily
Economic Max
Hourly
No Load Fee
Daily
Start Up Time
Daily
Daily
Notification Time
Daily
Incremental Energy
Offer
Minimum Down Time
Daily
Minimum Run Time
Daily
Manual Response Rate
Daily
11
Generator’s Financial Parameters
• Start Up Fee is the cost a generator incurs when started. Separate
cost can be designated when coming on-line from the following
three states (in $)
– Cold
– Intermediate
– Hot
• No Load Fee is the cost a generator incurs for each hour it remains
on-line (in $/hr)
• Incremental Offers are the blocks of energy quantities paired with
particular prices that reflect what a generator can produce at
certain incremental cost (price/quantity pairs)
– Quantity must be monotonically increasing
– Cost must be between $0 MWh and $1,000 MWh
– Identical price/pair blocks are used for the entire day
12
Example: Incremental Energy Offer
Price
MW
Quantity
$60
300
$50
250
$40
200
$30
150
$20
100
$10
50
13
Generator’s Physical Parameters
• Emergency Minimum is the lowest value at which the
generator can be dispatched during Minimum Generation
Emergency
• Economic Minimum (“EcoMin”) is the lowest value at which
the generator can be dispatched during normal conditions
• Economic Maximum (“EcoMax”) is the highest value at which
the generator can be dispatched during normal conditions
• Manual Response Rate is the rate at which the generator can
ramp its output
14
Generator’s Physical Parameters (cont.)
• Notification Time is the time needed for generator to
synchronize once informed to come on-line
• Start Up Time is the time the generator needs to reach its
Economic Minimum once synchronized to the system
• Minimum Run Time is the shortest duration the generator has
to remain on-line (after reaching Economic Minimum and
available for ISO dispatch) prior to being asked to come offline,
• Minimum Down Time is the shortest duration between the
time the generator has gone off-line and the time to come online, reach Economic Minimum and is available for ISO
dispatch
15
Example: Generation Physical Parameters
16
Example: Financial & Physical Parameters
Parameter
Emergency
Minimum
Economic
Minimum
Economic
Maximum
Offered
Value
25 MW
50 MW
300 MW
17
Generator Self Scheduling
• Resource can chose to self-schedule (i.e., fixed) their output
and become a price taker. A self-schedule “overrides” the
resources financial parameters effectively reflecting a desire
to operate at zero price, assuming no reliability issues.
• There are two key aspects of self-scheduling;
– Self-Commitment: A request for a resource to come online for a
duration (e.g., Minimum Run Time) at its EcoMin and be economically
dispatched between its EcoMin and EcoMax
– Self-Dispatch: An adjustment of a resource’s EcoMin to a desired
minimum output level. Resources will continue to be dispatched
between their EcoMin and EcoMax
18
Self Scheduling in DAM
• Generator can Self-Schedule which will result in clearing the
Day Ahead Energy Market as a price taker
– Equivalent to an offer to produce at the EcoMin at no cost (zero price
offer), and compensated at the Day-Ahead Clearing Price (set by
another generator)
• This is achieved by setting the Must Run flag and the
parameters are treated as:
– Start Up Fee = $0
– No Load Fee = $0
– Energy price pair blocks below the Economic Minimum offered at $0
• Generator will clear the Day Ahead Energy Market with at
least the energy below the Economic Minimum (unless there
is a reliability issue)
19
Example: Self-Schedule in DAM
•
Generator Self-Schedules in the DAM and sets its Economic Minimum at 150MW
•
At a minimum, generator A will clear 150MW for all 24hr of the day at the
Day-Ahead clearing price
•
Clearing/dispatch of output above 150MW will be on economic merit
Parameter
Emergency
Minimum
Economic
Minimum
Economic
Maximum
Offered
Value
25 MW
50 MW
150MW
300 MW
20
Example: Self-Scheduling & Dispatchable Range
• A generator that is not constrained by its physical parameter is eligible to
set the Real Time Price
– When self-scheduled, participants often increase the Economic Minimum
from their DAM offer, which naturally decreases the range in which a
generator is eligible to set the Real-Time Price
21
RE-OFFER PERIOD AND THE RESOURCE
ADEQUACY ASSESSMENT
Modification of financial parameters as previously submitted
in the DAM, supplemental commitments
Re-Offer Period
• Between 16:00 and 18:00 prior to the operating day,
Participants may modify certain financial Supply Offer
parameters that were submitted in the DAM
– The Incremental Offer (price/quantity pairs) can be modified for all
generators
– For generators that have not cleared the DAM, the Start Up and No
Load fee can be modified
– Generators that did not clear the DAM can also request to selfschedule
• Physical parameters can be re-declared only through phone
call to the Control Room
23
Resource Adequacy Assessment
• Between 18:00 and 22:00, the ISO performs the initial
Resource Adequacy Assessment to ensure that resources
committed in the DAM can meet the operational
requirements (e.g., forecasted load, operating reserves)
• During this time, supplemental commitments are considered
using offers submitted in the DAM (or modified during the ReOffer Period)
24
REAL-TIME ENERGY MARKET
Dispatching resources, settling Day-Ahead positions
Real-Time Energy Market Redeclaration
• Participants cannot change the financial parameters of their
Supply Offers
• Participants have the ability to self-schedule (self-commit) in
real-time, with 30 minute advance notice
– If approved, the generator will be permitted to come on-line
– If approved, the generator will at least be operated at its Economic
Minimum parameter
• Participant can also self-scheduled its output by re-declaring
their the Economic Minimum (self-dispatch) or to request
release to go off-line.
• Physical parameters in real-time can only be re-declared
through phone call to the Control Room
26
Real-Time Energy Market
• The ISO is evaluating system needs throughout the operating
day and will commit additional generators as needed
• During the operating day, economic dispatch of committed
generators is done based on the incremental offer submitted
in the DAM (or modified during the Re-Offer period)
27
Settlement
• Generators that clear in the DAM and produce energy up to
their cleared schedule are not impacted by the Real-Time
Price for that energy
• During an hour, if a generator produces less energy than its
Day-Ahead cleared schedule then it must procure the shortfall
at the Real-Time Price
• If a generator is dispatched above its Day-Ahead schedule
then the additional energy is settled based on the Real-Time
Price
• Generators which were committed/dispatched out of merit
for system needs are made whole through NCPC (i.e.,
indifferent regarding Real-Time Prices)
28
Summary
• As discussed, participants do not have an opportunity to
update financial parameters after the Re-Offer Period
• The Incremental Offer blocks must be identical for each hour
of the day
• The price of the Incremental Offer blocks can range between
$0 and $1,000
• During upcoming meetings, the ISO will discuss the observed
problems with the current market rules and the proposed
enhancements
29
30