2018 CAISO Policy Initiatives Roadmap

Transcription

1 2018 CAISO Policy Initiatives Roadmap Jim Price Senior Advisor, Market Quality and Renewable Integration California ISO Briefing to WECC Market Interface & Operating Committees March 20, 2018

2 California ISO is one of 9 ISO/RTOs in North America, providing open, non-discriminatory transmission access 29% renewables for IOUs (biogas, biomass, geothermal, small hydro, solar, wind) 3.2% nuclear 12% large hydro <1% coal <1% oil Balance: natural gas Responsibilities: Reliability, grid planning, outage coordination Market development, operations, monitoring CAISO manages approximately 80% of California s electricity load 50,270 MW record peak demand (7/24/2006) Changing resource mix presents challenges: Supply volatility: Over 20,000 MW of wind and solar capacity to be interconnected by 2020 Less predictable load patterns: Effects of distributed generation and electric vehicles Uncertainty surrounding thermal resources as about 18,000 MW is repowered or retired Phase out 12,000 MW of coastal plants with once-through cooling, by 2020 Greenhouse gas reductions limit replacements Water flow management affects hydro availability

3 EIM extends real-time market to broader region, for $288 million gross benefits through Q Builds on existing market: automated dispatch minimizes cost, facilitates renewables, resolves imbalance & avoids congestion Situational awareness enhances reliability FERC staff paper documented EIM benefits: -PotentialReliabilityBenefits- WesternEnergyImbalanceMarket.pdf No critical mass required. No exit fees April 2014 April 2016 April 2015 April 2014 Easily scalable, low-cost, low risk, voluntary option for new participants Preserves BAA autonomy, including compliance, balancing, and reserve obligations April 2016

4 Other opportunities: Extending regional integration to full participation in ISO markets and operations California s Senate Bill 350 (October 2015), Clean Energy & Pollution Reduction Act, established goals for 2030 and beyond: Reduce greenhouse gas to 40% below 1990 levels, Increase renewable electricity to 50% by 2030, Double energy efficiency savings by 2030 Transform CAISO into regional organization, subject to approval by legislature Requires Integrated Resource Plans from large utilities, Authorizes utility transportation electrification activities, Directs agencies to undertake various studies Estimated California savings = $55 million/year in 2020 for limited CAISO + PacifiCorp market, $1-1.5 billion/year in 2030 for WECC region less federal agencies, depending on assumed renewables, plus non-quantified benefits CAISO has already conducted multiple stakeholder processes

5 Primary drivers of proposed three-year roadmap for current and upcoming stakeholder processes Recent grid operations challenges pointing to need for day-ahead market enhancements to better manage net load curve in real time Extending day-ahead market enhancements to other EIM balancing areas provides regional benefits Increasing risk of retirement leading to increase in RMR driving need to reform the RA program Continuing efforts to lower barriers to DER market participation and addressing T-D interface coordination in line with DER growth Page 5

6 Day-ahead market enhancements address net load curve and uncertainty previously left to real-time 15-minute scheduling granularity Ensures day-ahead market commits resources with sufficient ramping capability Day-ahead flexible reserve product Compensates resources for must-offer obligation in real-time market to address net load uncertainty Combined Integrated Forward Market and Residual Unit Commitment Increase efficiency by simultaneously clearing bid in demand and balancing area net load forecast Allow RUC to decommit resources Full network model phase 2 Improved modeling of intertie transaction sources/sinks Page 6

7 Extending DAM to EIM Entities provides additional regional benefits Key benefits: Allows EIM participants to take advantage of day-ahead market enhancements Day-ahead unit commitment and scheduling across larger footprint improves market efficiency and more effectively integrates renewables Key principles: Each balancing authority retains reliability responsibilities States maintain control over integrated resource planning Resource adequacy procurement decisions remain with local regulatory authority Transmission planning and investment decisions remain with each balancing authority and local regulatory authority Page 7

8 Scope of stakeholder initiative to extend day-ahead market to EIM Entities Aligning transmission access charge (TAC) paradigms Ensure EIM Entities recover transmission costs consistent with existing bilateral transmission framework Consistent billing determinants across day-ahead market footprint for market efficiency Congestion revenue rights over expanded footprint Congestion hedging similar to CAISO balancing area Address long-term bilateral transactions within expanded day-ahead market footprint Day-ahead resource sufficiency evaluation Ensure balancing areas not leaning on others for capacity, flexibility or transmission Page 8

9 Scope of stakeholder initiative to extend day-ahead market to EIM Entities (continued) Transferring bid range Facilitate monthly/daily/hourly bilateral transactions across expanded day-ahead market footprint Used to help meet resource sufficiency evaluation using resources outside a balancing area Day-ahead GHG attribution Extend EIM real-time market approach to day-ahead Page 9

10 The Long Game: Unlocking the Dividend from California s investment in renewables California has invested $billions in renewables A new dividend: Clean, plentiful energy that can electrify a low-carbon economy New consumption opportunities for consumers: Electric vehicle charging Industrial processes Cooking and heating Bulk and local energy storage Then incent these sectors to provide grid balancing services

11 THANK YOU Stay Download ISO Today mobile app Sign up for the Daily Briefing at Page 11