NWPP Market Assessment and Coordination Initiative

Transcription

1 NWPP Market Assessment and Coordination Initiative ColumbiaGrid Board of Directors Meeting October 17, 2012 Patrick Damiano, Vice President, Development

2 Activities Leading Up to the Launch of the Market Assessment and Coordination Initiative Increasing challenges of integrating variable energy resources Western Electric Coordinating Council (WECC) studies in 2010 and 2011 ColumbiaGrid Review Western Governors PUC EIM Studies

3 NWPP Members Establish a New Committee On March 19, after several months of discussions, senior executives of members of the Northwest Power Pool (NWPP) met and agreed to establish a new committee to address a defined set of problems. o o The new committee is called the Market Assessment and Coordination Committee (MC) Launch of the MC Initiative was approved by 20 NWPP members present at the meeting

4 MC Initiative Participants Avista Corporation Balancing Authority of Northern California Bonneville Power Administration British Columbia Hydro and Power Authority Eugene Water & Electric Board Iberdrola Renewables, LLC Idaho Power Company NaturEner Wind Holding, LLC NorthWestern Energy PacifiCorp Portland General Electric Company Puget Sound Energy Public Utility District No. 1 of Chelan County, Washington Public Utility District No. 1 of Clark County, Washington Public Utility District No. 1 of Cowlitz County, Washington Public Utility District No. 1 of Douglas County, Washington Public Utility District No. 2 of Grant County, Washington Public Utility District No. 1 of Snohomish County, Washington Seattle City Light Tacoma Power Turlock Irrigation District Western Area Power Administration, Upper Great Plains

5 Organizational Structure Executive Committee Chairs: Pat Reiten (PacifiCorp), Steve Wright (BPA) The Executive Committee includes one executive from each MC participant. Organizing Committee Chair: Elliot Mainzer (BPA) Communications Subcommittee Chairs: Gregg Carrington (Chelan PUD) David Mills (PSE) Market Assessment & Coordination Committee Lead: MC Facilitator (Sarah Dennison-Leonard) Staffing: Contributed by MC Participants Executive Subcommittee on Governance Chairs: Bill Gaines (TPU) Jim Piro (PGE) Data Subcommittee Chairs: Kevin Nordt (Grant PUD) Vicken Kasarjian (SMUD)

6 Problem Statement Dialogue within the NWPP Balancing Authority community over the past 24 months has revealed several challenges associated with operating the regional power system in a reliable and cost-effective manner: 1. NWPP Balancing Authorities and scheduling utilities need additional tools to respond to rapid changes in load resource balance (ramps) and the increasing demand for balancing capacity driven by the growth of variable energy resources; 2. Utilities within the NWPP footprint are managing load and resource balance without systematically sharing the diversity between their systems; this may be resulting in increased costs and wear and tear on generating resources; 3. The region s increasingly constrained transmission system would benefit from new tools for congestion management and more efficient use of existing infrastructure;

7 Problem Statement (continued) 4. The costs and compliance risks associated with operating a Balancing Authority are increasing; this has reinvigorated conversations on potential BA consolidation among interested parties; 5. Evolving operational measures must clearly address cost causation and cost allocation; 6. NWPP members wish to recognize and, if possible, leverage existing platforms (such as automated sharing of contingency reserve) and innovative and valuable work from more recent initiatives within the NWPP footprint that deal with reliability, renewables integration, and transmission congestion management, including efforts by the NTTG/ColumbiaGrid/WestConnect Joint Initiative and the Northwest Wind Integration Forum. At the same time, these efforts would benefit from greater focus, coordination, and commitment to implementation among a critical mass of utilities; and 7. It is very important to the NWPP members to preserve the significant value that NWPP members already receive from the existing contingency reserve sharing program.

8 Mission of the MC Initiative Develop a decision-quality assessment of options to address the challenges identified in the Problem Statement and improve the efficiency and maintain the reliability of regional power system operations, with recommendations for moving forward. This assessment should: Identify alternatives (ranging from enhanced bilateral markets and operational mechanisms to a centralized imbalance market) Address costs and benefits Address governance Include a qualitative assessment of how each option addresses the problems identified in the Problem Statement Identify proposed Implementation mechanisms (centralized? specialpurpose entity? virtual or bricks and mortar?) Identify desired end state and implementation steps to get there Provide building blocks (modularity/optionality) a menu of elements that can be included or excluded

9 Launch Define Problem Statement Complete Contractual Arrangements Develop Work Plan Recruit Utility Staff and Other Resources Work Plan/Timeline Education Other Region s Same-Day Market Design Existing and Emerging Market/ Operational Tools Review Existing Benefits Studies Define Alternatives Energy Imbalance Market Alternative Enhanced Market/ Operational Tools Alternatives Evaluation Measuring Stick is Problem Statement Modeling Tools and Assumptions Gather Data/Refine Alternatives Iterate Runs of Benefits Model and Refining Inputs and Methodology Estimate Implementation Costs Decision Quality Assessment Comparison of Alternatives Recommend Best Strategy to Address the Identified Problems

10 Enhanced Market/Operational Tools & Security-Constrained Economic Dispatch (SCED) EIM Regulation Sharing Plus Expanded Use of ITAP (WebEx) Platform Intra-Hour Scheduling Dynamic Scheduling System (DSS) Intra-Hour Pre-Scheduling Flexible Bilateral Contracts SCED EIM

11 SCED EIM What Is It? The term energy imbalance market can lead to confusion: o o o o o o The EIM s function is not limited to managing energy and generation imbalances. The EIM is an intra-hour redispatch mechanism to economically optimize the generation resources that have been voluntarily offered (or committed) ahead of the operating hour for load service. It is not a supply mechanism for utilities that find themselves short of energy or capacity coming into the operating hour. The EIM does not supply capacity Market Participants must ensure adequate capacity to meet their needs independent of the EIM Market Participants may experience diversity of forecast error if the EIM is sufficiently liquid and robust EIM transactions float on top of all other transmission usage based on physical transmission availability during real time ( last in, first off )

12 What an EIM IS NOT Transmission congestion management to increase ATC Unit commitment or capacity market Reserve sharing or reserve optimization market A mechanism that shifts reliability or supply responsibilities among operating entities

13 Energy Imbalance Market Design Issues 1. Non-RTO Transmission utilizing multiple TSPs a. Adequate cost recovery for transmission without cost shifts b. Discussing Imputed Costs Model vs. Non-Imputed Costs Model (SPP) 2. Capacity and Ramping Sufficiency a. Ensure/verify capacity sufficiency for ramping to cover VER fluctuations b. Clarify current and future obligations of market participants and Transmission Providers 3. Hydro-electric operations a. Coordinated projects on a single river system b. Linked operations on multiple river systems c. Address hydro opportunity cost pricing

14 Analysis Team Approach EIM Analysis EMT Analysis Simplify EIM analysis where possible Understand other EIM modeling efforts (e.g. WECC and PUC EIM efforts) to inform MC effort Determine minimum achievable Benefits Enlist external analysis resources Determine gaps in analytical resources Work with EMT Workgroup to define options for analysis Use model, cases and resources from EIM analysis, when possible Determine minimum achievable benefits

15 Next Steps - NWPP Analysis Team Plan Planning Select contractor Negotiate and finalize statement of work Execute contract Phase I Assisted by Contractor Complete development and performance of core cases Refine model, as necessary Refine assumptions and run studies Prepare and present reports Provide input on recommendation to Executive Committee Train and plan for Phase 2 Phase II Energy Imbalance Market Alternative Enhanced Market/ Operational Tools Alternatives Aug early Sept 2012 Mid-Sept Dec 2012 Dec 2012-Early 2013

16 Costs 1. Market Operator Costs a) Developing list of unique features or designs for NW b) Will seek cost estimates for: i. Stand-alone NW EIM ii. iii. Third-party provider Fee-based from third-party provider 2. Market Participant Costs a) Process mapping b) Cost model

17 Collaboration Monthly MC meeting open to all interested persons External experts invited to share knowledge and insights Consulting resources such as PNNL On-going discussions with external technical experts as needed