Update on Short-Term Goals

Transcription

1 Update on Short-Term Goals Cheryl Mae Velasco Sr. Engineer, Real Time Market Ops May 4, 2018 Energy Price Formation Sr. Task Force

2 Segmentation of EPFSTF Work Short-Term (Q3 2018): Synchronized Reserve (SR) Market Consolidation Accuracy Offers Dynamic Reserve Zone Modeling Simplified Operating Reserve Demand Curve (ORDC) Enhancements Fast-Start Pricing* Others?? Mid-Term (Q1 2019): 30-Minute Reserve Market Complete ORDC Modeling Fast-Start Pricing* Others?? Long-Term (TBD): Broader ELMP implementation Day-ahead Reserve Modeling and Shortage Pricing Others?? * Implementation dependent on FERC process and approval/rejection. 2

3 Synchronized Reserve Market Proposal Overview The proposal herein represents a starting point for discussion within the stakeholder process. It should not be construed as a final proposal. General direction Consolidate Tier 1 and Tier 2 reserves Obligated to provide reserves during synchronized reserve event Compensated, regardless of the occurrence of a synchronized reserve event Subject to consequences for non-performance Simplify offer structure Use energy offer to calculate availability and reserve capability 3

4 Resource availability By default, if a resource is available for energy, it is available for reserves Type of Resource Change availability? Must Offer Applicability (no change from status quo) PJM-scheduled No, will be based on energy availability Online Capacity Resources Self-Scheduled No, will be based on energy availability Hydro, PJM or Self- Scheduled Condensers (offline or in condensing mode) ; If offline, then only during emergency conditions Online Non-Capacity Resources PJM-scheduled and Self- Scheduled No Demand Resource No See OA Schedule 1 Section A for Must Offer requirement 4

5 Updates to offers Type of Resource Enter Offer MW? Enter Offer Price? PJM-scheduled No, PJM will use energy parameters to calculate offer MW (up to $7.50/MW) Online Capacity Resources Self-Scheduled Hydro, PJM or Self- Scheduled Condensers (offline or in condensing mode) ; to be considered for reserves, must have a dispatchable range (up to $7.50/MW) (up to $7.50/MW) (up to $7.50/MW + condenser-specific costs) status quo* Online Non-Capacity Resources PJM-scheduled and Self- Scheduled (up to $7.50/MW) Demand Resource (up to $7.50/MW) 5

6 Offer Price In order to remove offer prices, resources need to be financially indifferent between providing energy or reserves In order to be financially indifferent, the consequences for not following dispatch instructions need to be aligned Deviations from energy dispatch incur balancing operating reserve charges SR non-compliance penalty can be in excess of SR revenues For example, units A and B are being dispatched for energy: A has a reserve assignment and B does not If a spin event is called and A does not respond, it will incur a non-compliance penalty including a retroactive compensation refund for all previously assigned hours If B does not follow energy dispatch, it will incur deviation charges Unit A is not financially indifferent between energy and reserves Synchronized Reserve offer prices help account for the difference in risk between not following energy and not following reserves 6

7 Discussion Options to address incentives to offer synchronized reserves: 1. Remove offer price and lower penalty A synchronized reserve penalty aligned with the energy penalty (balancing operating reserve deviation rate) is not sufficient to incent event response 2. Keep offer price and leave penalty as-is 3. Others?? 7

8 Estimating reserves using energy ramp rate Unit Output = 200 MW Energy ramp rate = 1 MW/min Ecomax = 300 MW Dispatch point = 210 MW 10 MW of available ramp 10 MW energy t 0 t +10 t +20 Dispatch point = 215 MW Reserves = 5 MW 10 MW of available ramp 5 MW energy 5 MW reserves t +5 t +15 8

9 Resources with operational limitations Unit Output at t 0 = 200 MW Energy ramp rate = segmented Ecomax = 300 MW MW Energy Ramp Rate MW/min MW/min MW/min for t +10 Dispatch point = 210 MW Available ramp = 10 MW for t +30 Dispatch point = 225 MW Available ramp = 10 MW for t +50 Dispatch point = 227 MW Available ramp = 1 MW t 0 t +10 t +20 t +30 t +40 T +50 t +60 for t +20 Dispatch point = 215 MW Reserves = 5 MW Available ramp = 10 MW for t +40 Dispatch point = 226 MW Available ramp = 1 MW for t +60 Dispatch point = 237 MW Reserves = 10 MW Available ramp = 20 MW 9

10 Resources with Spin Max less than Eco Max Unit Output at t 0 = 200 MW Energy ramp rate = 5 MW/min Spin Max = 280 MW Eco Max = 300 MW Dispatch point = 225 MW Reserves = 25 MW Available ramp = 50 MW Dispatch point = 260 MW Reserves = 20 MW Available ramp = 50 MW Unused ramp = 20 MW Dispatch point = 300 MW Available ramp = 50 MW Unused ramp = 30 MW t 0 t +10 t +20 t +30 t +40 t +50 PJM proposes allowing intra-hour updates to Spin Max in Markets Gateway Dispatch point = 250 MW Reserves = 25 MW Available ramp = 50 MW Dispatch point = 280 MW Available ramp = 50 MW Unused ramp = 30 MW 10

11 Intra-day ramp rate changes Adding Intra-day Ramp Rate Changes requires additional discussion Pros Better modeling of resources with operating limitations Cons Can be used to influence market outcomes Could additional rules help address these concerns? Limit amount of change? Require explanation of change? Impacts to uplift eligibility? 11