FRAC-MOO: Eligibility and Counting Rules

Transcription

1 FRAC-MOO: Eligibility and Cunting Rules Mark Hlman June 18, 2018

2 Key Principles Fr A Rbust Flexible RA Prgram Design Prcure sufficient flexible capacity, with the necessary attributes, t serve lad with a high level f cnfidence Avid ver-prcurement by: Nt prcuring t much Nt prcuring frm resurces with the wrng attributes Nt prcuring frm resurces that cannt (r d nt) perfrm Prmte efficient, least-cst prcurement by maximizing cmpetitin between and amng eligible resurces All resurce types capable and willing f prviding flexibility, including slar, demand respnse, etc. Internal resurces as well as resurces lcated utside the CAISO BAA 2

3 Pwerex Supprts Majr Elements Of FRAC-MOO Prpsal Framewrk Prpsed Flex RA framewrk aligns frward prcurement with the peratinal needs f CAISO markets 3-hur flexibility (fr Day Ahead Lad Shaping) 15-minute flexibility (fr RTPD psitining and deplyment) 5-minute flexibility (fr RTD and regulatin) Pwerex believes this is significant imprvement ver the current prgram, where frward prducts d nt translate int resurces that can be psitined and deplyed effectively thrugh CAISO market Prpsal enables Flex RA t be prvided by resurces lcated utside the CAISO BAA External resurces will be able t prvide DALS and 15-minute Flexible RA prducts Current prgram excludes virtually all external resurces Prpsal enables Flex RA t be prvided by renewable resurces 3

4 Ultimate Success Of Flex RA Requires Accurate Determinatin Of Requirements, And Accurate Assessment Of Supply Reliability bjective f meeting lad with a high level f cnfidence will be undermined if: Requirements are understated (i.e., actual needs will exceed prcurement requirement mre ften than target standard); r Supply is verstated (i.e., the prcured flexibility will nt actually be prvided when needed) Gap 1: Flexibility requirements appear well belw (p50?) what is necessary fr a 1-in-10 year r similar reliability target Prpsal is based n expected (1-in-2?) maximum bserved three-hur ramp in each mnth, plus ~3.5% fr cntingency reserve Pwerex understands this is the same as the current methdlgy, which understated actual 3-hur ramps in three mnths in 2017 Gap 2: Resurce eligibility t sell Flex RA exceeds bth demnstrated and expected perfrmance (p0?) Based n EFC in Master File, which can far exceed the maximum ramp actually achieved by resurces under real-wrld cnditins Nt adjusted fr planned r frced utages, which will systematically leave CAISO shrt ~10% f Flex RA Eligibility nt adjusted fr available resurces that d n perfrm when called upn, leaving CAISO further shrt f Flex RA Pwerex believes the current Flex RA prpsal is based n an insufficiently rbust assessment f demand, cmpunded by unrealistic assumptins f resurce capability, availability, and cmpliance with bligatins. 4

5 Flex RA Prpsal Shuld Be Strengthened T Meet Its Key Objectives Crrect design flaws that understate demand and verstate supply f Flex RA, either by: Using rbust criteria fr Flex RA requirements ( p95 estimate f ramp) and resurce eligibility (accunt fr utages, perfrmance); r Apply a Flex RA planning reserve margin fr uncertainty f need and f supply If the Flex RA prgram is nt strengthened, hw des CAISO plan t fill the gap when flexibility challenges arise? Rely n internal resurces that d nt have Flex RA cntracts r bligatins? Lean n vluntary resurces in the EIM (and hw will the CAISO BAA pass RS in these cases)? Lean n vluntary resurce ffers in the CAISO day ahead market? Once the Prpsal reflects the right needs with the right eligibility requirements, shuld enable maximum cmpetitin t supprt efficient least-cst prcurement f Flex RA Between internal and external resurces: must address widespread stranding f MIC Between different types f resurces: n need fr 25% limit n slar if resurces are truly capable and willing t prvide service 5

6 Thank Yu Pwerex Crp Burrard Street Vancuver, British Clumbia Canada V6C 2X8 Tel Tll Free