Key Findings from the Electricity Market Operation Benchmarking Survey Presented by Tan Liang Ching 02 Nov 2011

Transcription

1 Key Findings from the Electricity Market Operation Benchmarking Survey 2010 Presented by Tan Liang Ching 02 Nov

2 Background to Survey Objective is to establish reference material among market operators to: benchmark market processes, and; guide market development EMC first started the Survey in 2004, current 2010 Survey is 7th in the series 2

3 Respondents to 2010 Survey 1. KPX (440.9TWh) Korea 2. OMEL (275.0TWh) Spain 3. AEMO (188.3TWh) Victoria, NSW, Queensland etc 4. CAMMESA (110.7TWh) Argentina 5. XM (56.9TWh) Colombia 6. EMC (42.3TWh) Singapore 7. NZX (40.6TWh) New Zealand 8. IMOWA (17.4TWh) Western Australian 9. ELEXON UK 10. WESM Philippines Figures in parentheses refer to total load in

4 Survey Processes Feb Send out survey format for feedback Mar Send out revised survey format May Collation of survey data returns June Compile and analyze survey returns July Send out compiled surveys 4

5 Overview of Areas Surveyed Market Background General Info System Modeling Generation and EG Ancillary Services Capacity Markets Market Data Competition Demand-Side Mgmt Settlement t Surveillance Rule Change IT Systems Operator Performance 5

6 Market Background 6

7 Key Market Features Most markets settle physical trades, gencos free to put in price offers in the wholesale electricity spot market KPX (Cost-Based Pool) Generators submit details of production costs, System Marginal Price set based on the most expensive generation available Elexon Balancing and Settlement Code company 7

8 Main MO Functions Common Functions Pricing, Settlements, Scheduling, Dispatch Market operations are either integrated with system operation (e.g. AEMO, KPX, XM) or conducted by an independent body (e.g. EMC, IMOWA) Some MOs also involved in Transmission Planning (AEMO, KPX), and Market Governance (Elexon, EMC, IMOWA, KPX, WESM) 8

9 Products Traded Common Products Energy, Reserve (different response times), Regulation Products traded in Real-time only (AEMO, CAMMESA, Elexon, EMC, NZX, WESM), Day-ahead only (IMOWA, OMEL, XM) or both (KPX) Other products Derivatives, Transmission Rights, Bilateral Contracts, Capacity, Vesting Contracts, Other Ancillary Services (e.g. Blackstart) t) 9

10 Locational Pricing No (Elexon, IMOWA, XM) Yes Few nodes or zonal (AEMO/5, KPX/2, OMEL/2) Yes - Many Nodes (CAMMESA/300, EMC/720, NZX/285, WESM/276) Figure after slashes refers to number of pricing zones/nodes 10

11 Price Ceiling/Floor Price Ceiling No (Elexon, KPX, NZX, WESM, XM) Moderate (below USD$600) (OMEL, IMOWA, CAMMESA) Very High (above USD$600) (AEMO, EMC) Price Floor No (CAMMESA, Elexon, KPX, NZX, WESM) Moderate (above USD$400) (OMEL, XM) Very Low (below USD$400) (AEMO, EMC) 11

12 Gate Closure / Trading Period Most Gate Closure for Real Time Dispatch ranges from 1 to 3 hours, except AEMO which is 1 minute Trading period ranges from minutes, though AEMO/NZX have dispatch interval of 5 minutes 12

13 Main Fuel Types Coal - AEMO Gas -EMC Hydro NZX, XM Gas/Coal IMOWA, WESM Gas/Hydro - CAMMESA Coal/Nuclear - KPX Gas/Nuclear/Wind/Hydro OMEL 13

14 Embedded Generation Differential Treatment for EGs Sell directly to host retailer to reduce retailer s settlement (AEMO) Receive network incentives from distribution company such as avoided transmission payments (AEMO) Only net load, rather than gross load is charged non-reserve charges such as MO/SO fees (EMC) Must consume at least 50% of its own generation (EMC, KPX) 14

15 Ancillary Services Common types Reserve (response time, up/down/both) Regulation (up/down/both) Specific types Blackstart/System Restart (AEMO, EMC, IMOWA) Reactive Power (AEMO) Capacity (CAMMESA) Load Rejection (IMOWA) Voltage Support (NZX, KPX) 15

16 Capacity Markets Reliability Criteria Can cater to demand under drought/dry conditions (CAMMESA, XM) Expected energy shortfall of 0.002% (IMOWA) or Expected Loss of Load Probability of 0.5 day (KPX) Capacity Targets Best forecast of energy demand in commitment year, accounting for load growth Set procurement reserve rate (12-20%) from peak kforecast tdemandd 16

17 Capacity Markets Pricing Mechanism Administered (CAMMESA, KPX, OMEL) Auction (XM) Administered ->Auction (IMOWA) Procurement Mechanism Annual procurement Contract length of 1 year, up to 25 years (XM) 17

18 Capacity Markets Annual Value of Capacity Market up to $USD 3.68Billion (KPX) Allocation Mechanism Usually borne by Demand/Retailers/Market Customers through reserve capacity requirements (IMOWA, KPX, CAMMESA) Additional Capacity cost subsidized by National Treasury (CAMMESA) 18

19 Market Surveillance Common objectives Improve Transparency Market structure conducive for efficient and fair operation Compliance with market rules Safety and labour control Quality of Service 19

20 Market Data 20

21 Competition (Generation) Market Concentrated KPX (Korea Hydro and Nuclear Power Company - 33%) EMC (3 Gencos 79%) NZX (3 Gencos 80%) Market Not Concentrated AEMO CAMMESA OMEL WESM XM 21

22 Competition (Retail) Market Concentrated KPX (KEPCO practically 100%) EMC (4 Retailers 83%) NZX (5 Retailers 95%) OMEL (4 Retailers 94%) Market Not Concentrated AEMO CAMMESA XM 22

23 Demand Response Dispatchable Load AEMO (1320MW) Interruptible Load (MW/% of Total Reserve) AEMO (1320MW) EMC (21MW/ 3.0%) IMOWA (54MW/ 1.0%) KPX (4668MW/ 6.5%) OMEL (2500MW) 23

24 Demand Response Other DR Schemes Retailer/Customer Arrangement Mostly selfdispatched so customer can avoid high spot prices (AEMO) Remote Air Conditioner / Cold Storage System - Consumers who newly install the device are given subsidies (KPX) 24

25 Load Contestability Industrial/Commercial/Domestic AEMO (96%) Elexon (100%) OMEL (100%) NZX XM Industrial/Commercial only CAMMESA (46%) EMC (67%) IMOWA (69%) 25

26 Load Contestability Sample Load Profiles (NZX) Night/day (domestic): 75%day; 25% night Internally switched weekend day, weekend night, weekday, weeknight (domestic and commercial) Street lighting g (public) Dairy milking shed (commercial) Telecom payphones (commercial) Traffic signals (public) Mobile phone towers (commercial) 26

27 Interconnections With Gross Import/Export CAMMESA (2420GWh/359GWh) OMEL (3617GWh/11941GWh) WESM (127GWh/63GWh) G XM (9.8GWh/797.7GWh) Without Import/Export AEMO EMC IMOWA NZX KPX 27

28 Price Revision Price Revision Allowed AEMO CAMMESA Elexon EMC WESM Revision usually made within a few business days, and; affect only few periods except WESM 28

29 RT Dispatch Schedule Freq 5 mins AEMO, KPX, NZX 30 mins EMC 60 mins CAMMESA, OMEL, WESM 90 mins XM 24 hrs IMOWA 29

30 Settlement Daily Elexon ($USD 2.4 billion, 240 companies) EMC ($USD billion, 23 companies) KPX ($USD 57.5 billion, 420 companies) OMEL XM ($USD 4.89 billion, 110 companies) Weekly AEMO ($USD billion, 98 companies) IMOWA ($USD 200 million, 27 companies) 30

31 Settlement Monthly CAMMESA ($USD 8.0 billion, 788 companies) NZX WESM ($USD 1.17 billion) 31

32 Settlement Payment Deadline from Settlement <5CDs AEMO, IMOWA, OMEL 6-20CDs EMC, NZX, XM >20CDs CAMMESA, Elexon, KPX, WESM Collateral Requirement Yes (net exposure ranging from days) No - CAMMESA 32

33 Settlement Defaults IMOWA 3 defaults, total value of $USDm1.9 million Treatment of Customers of Defaulting Retailer Transfer to retailer of last resort (AEMO, Elexon, EMC, IMOWA, OMEL, WESM) No special treatment (CAMMESA, KPX, NZX, XM) 33

34 Rule Change Process Generally similar across different markets Process in EMC s case Any party can propose rule change Rules Change Panel (RCP) comprising industry stakeholders with prioritise issue by assessing its impact, with help of EMC If prioritised, EMC will analyse and make recommendation RCP support change EMC Board adopt change EMA approve change 34

35 MO Service Costs Operator Cost Staff ($USDm) Numbers CAMMESA EMC IMOWA WESM - 67 XM Figures only as general reference, as different MOs may have different scope and responsibilities 35

36 Areas where NEMS does well Nodal pricing with large number of locations priced Most ancillary service products procured competitively and co-optimised i with energy, quantity dynamically determined Low number of state-owned generation companies, none fully state-owned Comprehensive set of forecast schedules, with broad info coverage No market defaults 36

37 Areas to Explore Few risk management tools Lack of products to manage risks (e.g. forwards, FTRs) Low fuel diversity Significant reliance on oil and gas, compared to other jurisdictions Limited interruptible load (IL) participation Lowest installed capacity of IL at 21MW Limits on percentage of reserves which IL can provide 37

38 Areas to Explore Limited demand-side management programs Most jurisdictions have some demand-side initiative/ dispatchable load programme No full retail contestability Half of surveyed jurisdictions have extended d contestability to domestic consumers 38

39 Thank you 39