1 market operations standing committee meeting april 23, 2003 market evolution program
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1
Market Operations Standing Committee Meeting
April 23, 2003
Market Evolution Program
2
Overview
• Consultation • Initiative Status
3
Overview
Day Ahead Market
Multi-Interval Optimization
Short Term Resource Adequacy
Long Term Resource Adequacy
Wholesale/Retail Integration
Environmental Tracking
Locational Marginal Pricing
4
5
6
Working Groups/Consultation
StakeholdersIMO
notify
post
access
Email IMO.consultation@theimo.com
Phone 905-403-6931
input/dialog
Working Groups
7
Working Groups
Working Groups were formed after an initial fact-finding period for initiatives that were mature enough to benefit: Multi-Interval Optimization Day Ahead Market Long Term Resource Adequacy
Advisory process to help IMO make informed recommendations, particularly with respect to stakeholder perspective on issues
8
Next Steps
Stakeholder workshops planned for May/June on the Long Term Resource Adequacy and Day Ahead Market initiatives
Dates announced by the end of this week
Format: Face - to - Face Webcast
Each consists of an educational component and an opportunity for questions/input
Presentations will be made available in PowerPoint and as a Media Player file with audio
9
Locational Marginal Pricing
Nodal pricing behaviour since market opening is being assessed
Expect decision in the next few weeks on priority of continuing this work
Environmental Information Tracking
RFP for system prepared based on draft regulations
Early stages of assessing training and education needs of consumers/participants
10
Day Ahead Market
Leonard Kula
11
Day Ahead Market
DAM discussion paper Examined and ruled-out simple DAM for summer 2003 Formed DAM Working Group following Feb 18 MAC Developed DAM Objectives and Key Principles Prepared Feasibility Study - Mar 28 IMO Board accepted DAM
direction and approved commencement of design phase Staged approach - high level design to be completed by July at
which time an assessment will be made whether to proceed further
12
Day Ahead Market
Assessment of high level design: How well it addresses some of the problems evident in current market design and operation Appropriate linkages to long term resource adequacy initiative Broad stakeholder consensus on the benefits of implementing the proposed design Appropriate cost recovery mechanism
Working Group is engaged in identifying design issues and potential solutions
Stakeholder workshops planned for early June on proposed high level design
13
Day Ahead Market
DAM Working Group: Principles and Objectives DAM and impact on Market Participant Classes Reviewed other DAM Options Working Group consensus to proceed with SMD-style DAM Commencing discussions of high-level design features
14
Day Ahead Market Design
User Requirements WHAT the DAM will look like - complete September 2003 Split into high level design and detailed design:
• High level design - present to MAC June 11, IMO Board July 3• Detailed design
Significant portion of participant-facing elements
System Requirements HOW the DAM will work - complete November 2003 Fewer participant-facing elements
15
Multi-Interval Optimization
Mark Wilson
16
Multi-Interval Optimization - What have we done?
Feb 18 MAC Breakout sessions
Working Group
Formed with representation from generators and loads
Meets either via conference call or face-to-face sessions on a weekly basis
Focussed on three key issues: • Optimization Function• Optimization Time Period• Dispatch Advisories (How,What,When)
17
Multi-Interval Optimization Objectives
Improved Operational Reliability
Resources will automatically be scheduled in advance to allow ramp rate capability to be utilized to solve future reliability concerns
Operational Stability
Reduced Unit Cycling - The number of start/stop sequences for resources will be reduced relative to current operation
Improved Compliance - Non-compliance with dispatch instructions will be reduced
Improved Market Transparency
IMO manual intervention in the dispatch solution will be reduced
Improve Market Efficiencies
Constraint payments caused by limited ramp capability will be reduced compared to present dispatch
18
ABB Proposal
– Runs every 5 minutes
– Optimizes dispatch over next full hour using same objectives as currently used for five minutes
– Results applied to next 5 minute dispatch
– Dispatch advisory notices issued for 15,30, 45 and 60 minutes out
– Currently being developed for NY
IMO Proposal
– Runs every 15 minutes– Optimizes for critical intervals
over the next 60 minutes ( i.e. peak load, low load)
– Less complicated approach to optimization (solution will be optimal approx. 80% of the time)
– Utilizes a modified Look Ahead sequence
– Provides maximum and minimum requirements to real time sequence
– Dispatch Advisory notices issued for critical intervals
Two Proposals
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Issues/Recommendation
Issues ABB Solution
Calculation time
Potential hardware upgrade costs
IMO Solution
Solution may not always be optimal
Recommendation
Implement IMO solution
IMO Board approved design stage funds
Will go back in July for build phase funding
20
Next Steps
Stage 1
4/1 – 4/30Requirement
Definition
Stage 2
5/1 – 5/31Detailed Design
Stage 3
6/1 – 8/31Build / Test
Stage 4
9/1 – 10/15Commissioning
Stage 5
10/16 – 12/9Market Trials
December 10, 2003ImplementationBaseline R 8.1
21
Resource Adequacy
Jason Chee-Aloy
22
Short Term Resource Adequacy
Options reviewed, recommended mechanisms being implemented:• Emergency Demand Response• Hour Ahead Dispatchable Load• Replacement Energy
23
Long Term Resource Adequacy
Discussion paper Working Group formed Performing feasibility assessment with recommendation targeted for July, design to be completed by year end Six options currently under investigation LECG consultants engaged Working Group is engaged in identifying issues and potential solutions
Stakeholder workshops planned for early to mid-May on draft feasibility assessment
24
Long Term Resource Adequacy
LTRA Working Group: Objectives Evaluation Criteria Draft Feasibility Study
25
Wholesale/Retail Integration
Edward Arlitt
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What is a Wholesale/Retail Issue?
No formal definition, but generally these issues all display four common characteristics:
Both the wholesale and retail markets are affected
It is in the long-term interest of both markets to resolve them
No single governing/regulatory authority has full rule-making powers or responsibility over the issue
They are generally complicated by the fact that they span the wholesale/retail market boundary - particularly in areas such as issue ownership, computer systems, business processes and financial risk management activities
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Wholesale/Retail Integration
Issue Areas: Financial Stresses across the market boundary Opening the door to future demand response products that retail customers can participate in while providing a
reliability benefit Ensuring that the wholesale/retail market boundary keeps pace with emerging technologies such as retail-level
metering and microgeneration
Developments: Wholesale/Retail Integration discussion paper soliciting stakeholder feedback to be released shortly Upcoming Pilot Projects
28
Wholesale/Retail Integration
The Approach:
Avoid overlap with topics being addressed in existing stakeholder forums
Use of Pilot Projects to look ahead to future logistical challenges
Ensure that future solutions do not conflict with the evolving role of various market participants and retail entities
Ensure alignment with other MEP initiatives
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