Market Services Stakeholder Session
January 12, 2011
Agenda
Introductions, 2010 in review, the year ahead
Kelly Gunsch
Market Suspension
Anita Lee
Supply Surplus
Ruppa Minhas
Coffee Break
Wind Integration
Jacques Duchesne
Intertie Framework – ATC Allocation
Kevin Dawson
Transmission Constraint Management / Remedial Action
Schemes
Gordon Nadeau
Questions & Answers
2
Consultation and Conceptual Design
Clear Interpretation
of Policy Framework
Definition
of the Problem
Share our Research
& Learnings
from Other Markets
Share our Data &
Analysis
Review Progress
Against Objectives
12 – 18 months
Iterative Consultation
if New Ideas, New Concerns,
New Data
3
Solution Development and Implementation
Steps may be iterative,
performed more than
once within each initiative
Conceptual design
- define success
- idea generation
- stakeholder consultation
Detailed design
- iterative
- rules development
*AUC approval now
required
- processes
- systems
- procedures
Implementation
- training
Feedback loop – is the
implemented solution
achieving the initial
objectives?
- process changes
- system changes
Operationalize
- testing & training
4
2010 & 2011 Priorities
• Wind
– Integrate new wind
– Complete implementation of
Phase 1
– Phase 2
• Interties
– Integrate MATL
– ATC Allocation
– Intertie (ATC) restoration
initiatives
– Implementation of long term
framework
• Demand Response
– LSSi
– Brattle Review
• TCM & RAS
– Compliance Filing & Phased
Implementation
– Draft RAS Rule
• Contingency Rules
– Supply Surplus
– Market Suspension
• FEOC Regulation Implementation
– AESO Rule updates necessary
• Outage Information Sharing
• Market Rule Transition (TOAD
program)
• OR Redesign
5
Market Suspension
Anita Lee, P.Eng. PMP
January 12, 2011
Purpose of review
• Current rule is outdated (e.g., pricing methodology)
• Current rule does not differentiate between events of lesser
impact (such as temporary loss of the dispatch tool) and
events of more significant impact (such as an AIES blackout)
• Ensure market suspension is only used as a last resort
7
Status Update
• Recommendation Paper issued December 2, 2010
• Stakeholder comments due January 14, 2011 – comments to
be sent to anita.lee@aeso.ca
• Development of rule changes in Q1 2011
• Stakeholder consultation on rule changes in Q2 2011
8
Highlights of Recommendation Paper
• Limited Market Operation
– Triggered when:
• There is a temporary outage to market operation tools (DT or
ETS)
• The System Controller cannot access market operation tools after
evacuation from the System Coordination Centre and before the
Backup Coordination Centre is activated
9
Highlights of Recommendation Paper
• During limited market operation:
– The System Controller will use the best available EMMO for
energy market dispatch
– DDS dispatch and AS dispatch will be limited
– Payments to Suppliers on the Margin (PSM) will be suspended
– The System Marginal Price (SMP) will be set by the highest
price block dispatched in the EMMO in use
10
Highlights of Recommendation Paper
• Market suspension triggered when:
– There has been an extended period of market operation tool
outage,
– The System Controller has evacuated the System Coordination
Centre and cannot access or activate the Backup Coordination
Centre,
– The AIES has broken into two or more electrical islands, or
– The AIES has experienced a blackout
11
Highlights of Recommendation Paper
• A market suspension
– Must be authorized by the AESO CEO or his designate, except
in the case of an AIES blackout where it can be declared by the
System Controller
• During a market suspension
• The System Controller will not necessarily follow the EMMO,
but will direct generation as necessary to maintain system
reliability
12
Highlights of Recommendation Paper
• System Marginal Price during a market suspension will be
determined as:
– 30 day rolling average on peak price and 30 day rolling
average off peak price, prior to initiation of the market, or
– $999.99 when all available energy is dispatched and the
System Controller invokes Supply Shortfall procedures in order
to manage supply and demand balance
13
Highlights of Recommendation Paper
• A cost-based mechanism will be provided
– To ensure generators’ operating costs are covered
– The cost calculation formula is similar to that for Long Lead
Time Energy (LLTE), except generator start up costs are only
included if a generator is directed by the System Controller to
start during a market suspension, and
• Directed off by the SC during the market suspension, or
• Dispatched off by the SC upon the cancellation of the market
suspension and return to normal market operation
14
Next Steps
• Comments on the Market Suspension Recommendation
Paper are due this Friday, January 14, 2011 to
anita.lee@aeso.ca
15
Questions?
Supply Surplus
Recommendations
Ruppa Minhas
January 12, 2011
Status Update
• AESO responses to stakeholder comments on the Supply
Surplus Discussion Paper published December 2, 2010
• Supply Surplus Recommendation Paper published for
stakeholder comment on December 2, 2010
– Stakeholder comments on the Recommendation Paper are due
January 14, 2011
18
Supply Surplus
• Supply Surplus:
– More supply than demand at $0
• Purpose:
– Provide recommendations on the solutions for managing
supply surplus conditions
19
Recommendations - Summary
• No exemption for wind generators and cogenerators
• Implement of voluntary generator curtailment request
(VGCR)
• Allow exports within T-2
• Update minimum stable generation (MSG)
• Supply surplus report
– Implemented December 8, 2010
• A voluntary generator curtailment program (VGCP)
– Not recommended
20
Recommendation - No exemption for wind
and cogenerators
• It is necessary to include all generation types in the supply
surplus procedures so that they are all on a level playing field
• Allowing a blanket exemption for one generation type will not
accomplish this
21
Recommendation - No exemption for
Cogenerators
• To ensure a FEOC market the rules must consider, and, to
the extent possible, accommodate the different
characteristics of each generation type without unduly
favouring one type of generation over another
• Minimize the impact to cogen facilities as a result of supply
surplus:
– Electric energy produced and consumed on site is not subject
to the ISO rules: EUA, Section 2(1)(b)
• Cogenerators will not be curtailed below 0MW net to grid
– Generators will be curtailed to their MSG level
• Revise MSG definition to better accommodate current generator
limitations
22
Minimum Stable Generation
• MSG definition and application requires an update
• MSG workgroup
– Meeting was held in October 2010
• Further consultation:
– Meeting again soon:
• To finalize the proposed definition
• To discuss options for changing the application of MSG
– To allow participants to change the MSG value on a timeahead basis
23
Comparison – Supply Surplus and Supply
Shortfall
Supply Surplus
Supply Shortfall
$0
$999.99
• More supply than demand
• More demand than supply
• Need to achieve supply-demand balance
• Need to achieve supply-demand balance
Curtail current hour import transactions
Reduce export ATC to zero
• Included within existing and recommended
procedure
• Step 6 in OPP 801
Voluntary Generator Curtailment Request
Request to market to provide supply
• Request to market to allow generators to voluntarily
curtail supply
• Step 4 in OPP 801
Allow exports within T-2
Allow imports within T-2
• Low cost and easy to implement
• Step 5 in OPP 801
Assess an assets involvement in RR, consider redispatch if required
Issue directive for excess reserves
• Step 19 in OPP 801
• Included within existing and recommended
procedure
Supply Surplus Report
Supply Adequacy Report
• Provides the market with an indication of potential
supply surplus conditions
• Provides the market with an indication of potential
supply shortfall conditions
24
Voluntary Generator Curtailment Program
(VGCP)
• VGCP not recommended at this time
• Received mixed participant support and most participants
were not in favour
• May be a more complex solution than is required
• Not required at this time
25
Recommendation – Supply Surplus
Procedure
1) Curtail current hour import
2) Maximize the posted export ATC limit
3) Send out a VGCR request to voluntarily reduce generator
output.
4) Dispatch flexible blocks of the $0 offers for partial volumes
on a pro-rata basis and direct wind generation on a pro-rata
basis.
5) Direct assets with inflexible $0 offers to MSG
6) Assess an assets involvement in RR, consider re-dispatch if
required
26
Supply Surplus Report
• Available on the AESO website on December 8, 2010
27
Next Steps
• Stakeholder comments on recommendation paper due
January 14, 2010 to ruppa.minhas@aeso.ca
• MSG workgroup meeting soon
– Invite will be sent out through the weekly stakeholder email and
posted on the AESO website once scheduled
28
Questions?
Coffee Break
Wind Integration Program
Jacques Duchesne P. Eng.
Program Manager, Wind Integration
January 12, 2011
Wind Integration – Objectives
Phase 1:
• Wind integration management plan designed and
implemented to safely integrate 1100 MW of wind
by end of 2011
Phase 2:
• Wind integration plan for up to 4000 MW
32
Agenda
• Program overview
• Status update phase 1
– Wind Technical Rule
– Wind power management
– Forecasting
• Status update phase 2
– Discussion Paper
– Stakeholder sessions
33
Wind Integration Program – High Level View
2010
2011
Wind Power
Wind Power
Forecaster Selection
Forecast
Forecast
Integration
Integration
Design
2012 / 2013
Wind Power Forecast
Roll-out
Wind Technical Rule
Short-term
Short-Term
Market studies
Plan Design
Phase 2 Implementation
Wind Power Management
Long-Term
Phase 2
Market Studies
Design & Consultation
34
Phase 1 Update
• Wind Technical Rule
– Filed with AUC August 2010
– Hearing scheduled for February 28
• Phase 1 Recommendations - September 2010
– Use EMMO as primary tool
– Use wind power management when wind ramping up too fast
– For wind ramp down, activate contingency reserves from
standby. No additional volume required at 1100 MW wind.
– Continue implementation of centralized forecast
35
Wind Forecast
• Signed contract with WEPROG January 2010
• Forecast will:
• Reduce wind related Area Control Error (ACE) events
• Decrease the amount of wind generation impacted by Wind
Power Management
• Provide visibility to system controllers
• Developed implementation guide November 2010
• Roll-out to existing wind farms in progress
36
Phase 2 - Status
• Market and Operational Studies completed December 2010
– Cases: 1575 MW, 1700 MW, 2500 MW & 4000 MW
• Issued Discussion Paper for comments – December 2010
– Comments due back January 28
• Will hold stakeholder consultation to explore in Q 2011
37
Phase 2 Summary – Discussion Paper
• Rely on the Energy Market Merit Order
• Increase regulating reserve volumes.
• Refine short-term wind integration recommendations
• Develop a ramping service
• Develop a wind firming service: A market service could be
developed to firm overall wind production
• Develop must offer must comply (MOMC) rules for wind
38
Next Steps
• Phase 1
– Tool to calculate ramp rate and system wind power limit
– Consult on rule defining use of WPM
– Site specific forecast integration
• Phase 2
– Stakeholder comments due back January 28
– Ongoing consultation – wind working group Q1 2011
39
Next Steps
• Comments on the Phase 2 Wind Integration Discussion
Paper are due Friday, January 28, 2011 to
jacques.duchesne@aeso.ca
40
Questions?
Intertie Framework – Available Transfer
Capacity Allocation
Kevin Dawson, Program Manager, Interties
January 12, 2011
Intertie Framework – Today’s Agenda
• Summary of Intertie Framework Recommendation Paper
• Overview of recent ATC information package (letter, term
sheet)
• Discussion on ATC allocation recommendation
– Options considered
– Recommendation
– Next steps
43
Intertie Framework Recommendation Paper
• Intertie Framework Recommendation Paper published
October 7, 2010 contained four main recommendations:
– ATC allocation by energy price and then pro rata
– Implement dynamic scheduling
– Develop and implement a merchant transmission service
(MTS) tariff
– Plan system so each intertie can simultaneously transfer path
rating
• Stakeholder comments have been received and posted
44
Intertie Framework – ATC Allocation
• Immediate focus on ATC allocation as third tie line under
construction will result in requirement to allocate limited ATC
among multiple interties
• ATC letter and term sheet posted December 16, 2010
– For information purposes
– Provides overview of new rule framework
• Process going forward
– Rule drafting in progress (in integrated format)
– Rule cycle for February / March
• Fulsome opportunity for comment on rule change and rule language
45
Intertie Rules – Term Sheet Overview
• Rule framework integrates previous OPPs with rules
– Limits Total and Available Transfer Capacity (TTC, ATC)
– Scheduling
– Validation and setting of schedules
– Congestion management on the interties
– Dispatching intertie schedules
• Term sheet provides overview of new rule format outlining
proposed rule provisions and how they map to current rules
and OPPs
– Highlights where rule changes are recommended – allocation
of ATC
46
ATC Allocation – Design Choices
• Approval process
– Approve tags, allow for other scheduling authorities to make cuts
using their criteria (tariff)
• Alternative does not recognize commercial product in other jurisdiction
and may prematurely reject tags
• Timeline
– Xx:45 consistent with objective noted above
• Earlier alternatives, e.g., T-2, perhaps more consistent with rest of market
but don’t recognize products in other jurisdictions and may reduce overall
intertie utilization
• Procedures
– Submissions, scheduling and congestion management
• Discussed below
47
ATC Allocation Recommendation
• Recall – current method is to curtail on a last in,
first out (LIFO) basis
• New proposal – pro rata
– At xx:45, assessment and validation
– Test for oversubscription first at system, then AC, then intertie
level
– Resolve any oversubscription by:
• Netting out counterflows and wheelthroughs
• Price (when implemented)
• Pro rata of equal priced offers / bids at assessment level (system,
AC, intertie)
48
Example ATC Pro Rata Allocation Math
Capability
Scheduled
Net Sch.
Adjustment
Final Sch.
BC Intertie
Import Export
700
700
550
50
500
-65
485
50
MT Intertie
Import Export
300
300
300
0
300
-35
265
0
SK Intertie
Import Export
150
150
50
0
50
50
0
Net AC limit
Import Export
700
700
850
50
800
-100
System limit
Import Export
850
650
900
50
850
700
750
• Simplified example – no wheelthrough and only 1 tag per import/export
• In this example, system limit is OK but AC import limit is violated
• BC and Montana imports pro-rated down by 100 MW to come within
limits
• All interties are within limits
49
Congestion Management Choices
• Number of choices considered and rejected:
– Pro rata math limited to maximum of ATC on any line instead of
schedules
• Recognize incentive to over schedule, however “must supply” if
dispatched
• May need to revisit if “must supply” risk is not sufficient to limit behaviour,
but mathematically implementation is problematic
– Curtail first at intertie level, then AC, then system
• No opportunity at xx:45 to optimize process. Recognize that on occasion
cut at intertie level may be more efficient. Will monitor to see if
occurrence more frequent than expected.
• Expect ability to “net schedule” at system level should allow for
maximized utilization of ATC
– Curtail by participant not tag
• Fairness issue
50
Next Steps
• ATC term sheet comments welcome but not required
• Rules process for integrated rule language to commence in
February
• Expect rule filing with AUC by end of March, 2011
51
Questions?
Transmission Constraint Management &
Remedial Action Schemes
Gordon Nadeau
January 12, 2011
Transmission Constraint Management
Transmission Constraint Management AUC
Decision 2009-042
• Original proposed rule was deemed to be technically
deficient and the AESO has addressed those deficiencies by:
– defining the scope of the rule
– providing clarity around certain steps
– defining specific fundamental terms
– defining the use of TMR
55
Transmission Constraint Management AUC
Decision 2009-042
• ENMAX proposal:
– Not generally consistent with the AESO’s approach, as stated
by the Commission
– has perverse incentives
– not compatible with the current market design
56
Transmission Constraint Management Rule Filing
• Submitted the rule 9.4 as a compliance filing on December
16, 2010
• TCM update letter on the AESO progress on TCM Initiatives
• TCM rule language comment response matrix
• Rule was filed in accordance with section 20.5(2) of the EUA
• AUC will provide further direction
57
Transmission Constraint ManagementImplementation
• Once a final decision is received:
– Operational tool development
– OPPs will be aligned and filed in stages in 2011 and full
implementation of Rule 9.4 thru OPPs and systems to proceed
through 2012
58
Remedial Action Schemes
Remedial Action Schemes
Background
• Remedial Action Scheme (RAS) consultation has proceeded
in parallel with TCM rule 9.4; part of comprehensive
consultations on constraint management
• On July 20 2010, the AESO initiated formal rule consultation
on a proposed Connection RAS rule and provided a draft
RAS ID to help clarify the policies applied to Connection RAS
• Stakeholder comments on the proposed Connection RAS
rule were posted to the AESO website on September 9, 2010
60
Current Connection RAS Status
• The AESO is currently considering stakeholder comments
• Some stakeholders are seeking clarity on AESO connection
policies; others are looking for firm AESO commitments
during the connection process
• The AESO is of the view that further consultation is required
to discuss these issues and potentially broaden the scope of
the Connection RAS rule
• Targeting first half of 2011 for filing rule with AUC
61
Questions?
Thank you