A Proposal for an Inter-Regional Transmission Organization

Transcription

1 A Proposal for an Inter-Regional Transmission Organization Marija D. ILIC Yong T. YOON Laboratory for Information and Decision Systems Massachusetts Institute of Technology 77 Massachusetts Avenue, Rm Cambridge, MA The views expressed here are strictly of the authors and do not necessarily represent the views of others including the research sponsors.

2 Outline Introduction Example: Northeast Power Coordinating Council (NPCC) and Northeast Regional Transmission Organization (NERTO) Revisiting operation of interconnected system Generation dispatch: efficiency and reliability Need for energy, reserve and information sharing Business model for inter-regional transmission organization [1] Enabling energy and reserve sharing through information sharing Economical supplement to current development Concluding remarks

3 Introduction Unlike in the restructuring of telecommunication industry and of gas industry, in the restructuring of electric power industry Operation and planning of various resources by the responsible participants effect system-wide performance and each other's respective functions and thus must be performed in competitive as well as coordinating environment Problems and issues of interposing efficiency and reliability for improved system-wide performance are usually quite difficult but at the same time learning through trial and error is not a practical approach Therefore, market design requires thinking through issues and problems pertaining to replacing parts of operation and planning functions traditionally performed by vertically integrated utility with market mechanisms In this presentation we consider replacing the coordination among Control Areas, which is customarily efficient and reliable but limited to neighboring regions, with a workable business model

4 Example: Geographical Area Covered by Northeast Power Coordinating Council (NPCC) The geographic area covered by NPCC includes New York State, the six New England States, and the Ontario, Québec, and Maritime Provinces. Among Control Areas in NPCC New York and New England combined with Pennsylvania-New Jersey-Maryland (PJM in Mid-Atlantic Area Council) make up Northeast Regional Transmission Organization market being developed.

5 Example: Seams Issues in Northeast Regional Transmission Organization Market (1) [5,6] Commercially significant and other inter-rto seams issues: ensure that generation/transmission expansion in each area are included in planning processes coordinated to ensure system reliability? avoid stranded costs? promote efficiency in the process? address rate pancaking? How homogeneous will the NERTO be? Coordinate with Alliance, MISO, Grid South, and the Canadian companies How will RTO work with adjacent systems to make sure that generation/transmission expansions in each area are included in the adjacent areas planning process to ensure system reliability?

6 Example: Seams Issues in Northeast Regional Transmission Organization Market (2) Technical Issues inter-rto congestion management? transaction scheduling and checkout? ICAP outside the RTO? Will the NE RTO continue to negotiate in good faith to resolve seams issues with other regions? When should interregional coordination (seams) issues be resolved and in put in place?

7 Revisiting Operation of Interconnected System [2,3,4] Generation dispatch in single Control Area single market setting (1) Possible generation dispatches with respect to anticipated load N-1cont. DISTURBANCE Dynamics model Thermal limit Violated? no Thermal limit violated? no Transient stability violated? no yes yes yes Desired operating Condition? no Corrective action through ancillary services Desired operating Condition? no Unacceptable operating conditions Reliability Criteria yes Reliability Criteria yes Reserve Availability Acceptable operating conditions

8 Revisiting Operation of Interconnected System [4,5] Generation dispatch in single Control Area single market setting (2) Acceptable operating conditions Economics of energy allocation Economics of reserve allocation Energy and transmission pricing/ maximum transmission limits/ transmission right settlement Assumption: Clearly defined reliability criteria Full control over generation dispatch and reserve allocation by system operator Availability of dynamics and static model in detail with respect to possible contingencies

9 Revisiting Operation of Interconnected System [ ] Extending generation dispatch method to interconnected system (1) Possible generation dispatches with respect to anticipated load DISTURBANCE Thermal limit Violated? (N-1)x(M-1)x??? Dynamics Model??? no Thermal limit violated? no Transient stability violated? no yes yes yes Desired operating Condition? no Corrective action through ancillary services Desired operating Condition? no Unacceptable operating conditions Reliability Criteria??? yes Reserve Availability??? Reliability Criteria??? yes Acceptable operating conditions

10 Revisiting Operation of Interconnected System [ ] Generation dispatch in multiple Control Area multiple market setting (2) Acceptable operating conditions Economics of energy allocation Economics of reserve allocation Energy and transmission pricing/ transmission loading relief/ ATC,TTC calculation Assumption: Different reliability criteria Limited control over generation dispatch and reserve allocation by system operator over interconnected system Limited availability of dynamics and static model in detail with respect to possible contingencies in other subsystems

11 Revisiting Operation of Interconnected System [2,3,4] Actual generation dispatch in multiple Control Area multiple market setting (3)

12 Revisiting Operation of Interconnected System Actual generation dispatch in multiple Control Area multiple market setting (4) Other subsystems modeled as uncertain load (or as a simple circuit with little detail) Due to the simplified modeling the change in system operating condition, which occurs outside the system operator s subsystem, is observed only as a change in tie line flows or change in load Fluctuation in level of reliability caused by change in operating condition outside the respective subsystem measurable nearly directly related to change in tie line flow from anticipated more deviation from anticipated typically more reserve required to keep the same level of reliability

13 Need for Energy, Reserve and Information Sharing Need for energy sharing Price of energy in ISO NE significantly lower with the import from Hydro-Québec than without Need for reserve sharing Loss of load probabilities in ISO NE and NYISO are both greater than 1 day in 10 years as two separate systems and less than 1 day in 10 years as two interconnected system with correlation between hourly loads of the subsystems Need for information sharing [2,5,6] Loss of import tie-line between ISO NE and Hydro-Québec (HQT-NE) results in low voltage problems in PJM

14 Business Model for Inter-regional regional Transmission Organization [1] System operators continue to be responsible for the reliable operation in the respective subsystems Direct interest in controlling tie line flows around the anticipated and in reserve sharing with neighboring regions to manage contingencies within the respective subsystem and to prevent further propagation of the effect to other regions Market participants have incentives for lowering electricity price through energy sharing Newly created inter-regional transmission organization (IRTO) becomes responsible for managing inter-regional transactions Initially assigning the anticipated tie-line flow and assisting the maintenance of flows around the anticipated while circumventing the need for transmission loading relief procedures

15 Financial Transactions among Participants under the New Business Model Short Term (1) Scheduling tie-line flows System operators submit bids to IRTO expressing their preferences for amount of flows reflecting the change in cost of reserve necessary to keep the desired level of reliability through bids; either pays (if the resulting tie-line flows scheduled close to the preferred and thus result in significant saving in reserve cost) or gets paid Market participants submit bids to IRTO expressing their preference for inter-regional transactions; always pays in order to achieve arranged transactions IRTO based on bids from system operators and market participants schedule the initial tie-line flows throughout the interconnected system

16 Financial Transactions among Participants under the New Business Model - Short Term (2) Following a change in operating condition System operator causing the change pays the neighboring subsystem (maybe in kind only) with whom reserve sharing agreements exist and pays the IRTO for maintaining tie-line flows close to initial schedule System operators in the affected subsystems get paid for providing reserve to maintain tie-line flows Individual generator owners gets paid by IRTO for providing reserve to maintain tie-line flows IRTO gets paid by the system operator causing the change and pays the system operators in the affected subsystems without reserve sharing agreement and individual generator owners

17 Financial Transactions among Participants under the New Business Model Long Term Coordination of transmission investment for accommodating more inter-regional transactions System operators submit bids to IRTO expressing their preferences for amount of flows reflecting the change in cost of investment necessary to keep the desired level of reliability through bids; gets paid for providing the resources in the future Market participants submit bids to IRTO expressing their preference for inter-regional transactions long term; always pays in order to achieve arranged transactions IRTO based on bids from system operators and market participants arranges for transmission facilities for scheduling the tie-line flows in the future throughout the interconnected system

18 Advantage of Newly Proposed Business Model Supplemental to current RTO development Requires no artificial changes to market development of each subsystem; software tool compatible with any market currently being established Adapts the market-based minimal coordination among market participants eliminating the need for transmission loading relief procedures Separate flow-based tariff for executing inter-regional transactions between any one subsystem to another reflecting system usage and change in reliability; no rate pancaking Introduces first market based reliability standards [7] in overseeing inter-regional transactions

19 Conclusion and Future Research Under the proposed market mechanism Optimization of reliability and efficiency throughout interconnection Streamlined scheduling and transmission reservation process Accurate transfer capability computation and liability placement Investment incentives for fostering inter-regional transactions Currently the proposed market mechanism and relevant algorithms are patent pending and under development for commercial application

20 References: [1] M.D. Ilic and Y, Yoon, " Inter-regional Transmission Organization: Design, Functions and Tariffs, October 14, 2000 MIT Patent, Case No [2] Ilic, M., "Voltage-Related Power Systems Monitoring and Control: A Revised and Expanded Research Agenda," MIT Laboratory for Electromagnetic and Electronic Systems, WP91-001, March [3] Ilic, M.D. and S.X. Liu, Hierarchical Power Systems Control: Its Value in a Changing Electric Power Industry, Springer-Verlag London Limited Series, Advances in Industrial Control, March [4] Ilic, M., Zaborszky, J., Dynamics and Control of Large Power Systems, John Wiley &Sons, 2000 (chapter 13) [5] Ilic, M., Yoon, Y., RTO Filing, Regarding Order 2000 Compliance Filing Docket No..RT01 000, January [6] Ilic, M., Graves, F.C., ``Promoting Wholesale Competition Through Open Access Non-Discriminatory Transmission Services by Public Utilities, Reply Comments to the Federal Energy Regulatory Commission, Docket No. RM , October, [7]Yoon, Y., Ilic, M., ``A Possible Notion of Short-term Value-based Reliability, Proceedings of the IEEE PES Winter Power Meeting, New York City, NY, January 27-31, 2002.