Capacity Market Topics Resource Targets, Qualifications, Performance Standards, Must Offer. Jacqueline DeRosa, Senior Market and Product Economist

Transcription

1 Capacity Market Topics Resource Targets, Qualifications, Performance Standards, Must Offer Jacqueline DeRosa, Senior Market and Product Economist Capacity Market Stakeholder Meeting September 19, 2007

2 Agenda Resource Targets RA Qualifications Existing, Planned Generation, Demand Response Imports Performance Standards Must Offer 2

3 Resource Adequacy Targets - Proposals Summary: Four proposals include forward assessment and determination RA Targets Four proposals include continuation (in some form) of the collaborative RA Target development process that is in place today 3

4 RA Target - Proposals CFCM Five years prior to delivery year Requirements for local areas with transfer limitation and level of internal generation, and installed MWs Max amount of imports (by path and total) Cal CIM Three to Four Year Planning Elements Include Load Forecasting and Establishing Reserve Margin Definition of Load Pockets 4

5 RA Target - Proposals Mirant Retain existing procurement timelines Do not move to multi-year forward procurement requirement Move from monthly peak to annual peak demand PGE Six Years Ahead Comprehensive Forward Assessment Conducted Every Three Years Reliability, Competitiveness, Environmental and Performance Needs of System Local Area Prescriptive determination 5

6 RA Targets CAISO Assessment Build off RA procurement targets System Peak load plus PRM Annual Peak approach warrants consideration Locational Capacity Requirements Multi year forward assessment based on established RA targets Can inform investment decisions Supports bilateral procurement Could support integration with transmission planning Details? Could include other reliability requirements 6

7 Operational Attributes - Proposals CFCMA, Mirant, Constellation Include local price signals and encourages development of AS markets to inform investment decisions CFCM - Could add a price adder to meet more targeted operational goals PG&E - Comprehensive Assessment and CRFO to procure operational characteristics Mirant - Annual product to provide more operational certainty 7

8 Operational Attributes - CAISO Assessment Multi year forward obligation for system and local could direct investment What is the most effective and efficient way to attract investment in needed operational attributes? (1) Rely on combination of CCM and locational and spot AS markets (2) Use price adders in CCM for attributes (3) Target CRFO to procure attributes CAISO supports identification and development of spot markets but is this enough to encourage investment? 8

9 Resource Qualification - Proposals All proposals Support definition of product and clear rules to qualify CFCM All capacity must be offered into auction New Generation and repowerings -- with development criteria to be established Delisting Demand response Imports 9

10 Resource Qualification - Proposals Constellation Forced outages used to adjust QC on an annual basis (combined with testing to compute average) Forced outage data will impact subsequent periods Scheduled outages are already in PRM Mirant Demand response should be based on rolling average availability at peak Import capacity - Derating Net QC based on testing, and forced outages 10

11 Resource Qualification Proposals, Continued and CAISO Assessment Proposals Continued PG&E Qualification rules under CAM - undefined CAISO Assessment Existing RA program s resource qualification requirements are sound framework Carefully consider what resources qualify and should be uniform to all participants 11

12 Resource Qualification - CAISO Assessment Continued Once qualified, capacity may be traded bilaterally or through CCM, or other procurement mechanism Supports Listing and Delisting concept All internal capacity must offer into auction unless it formally delists New and Repowerings should meet milestones Demand Response Currently being discussed in multiagency process 12

13 Resource Qualification - Imports All Four There is a Need to Accommodate Imports in CA CFCM - CAISO recommends max amount of imports from external control areas; can be self supplied and bid in CalCim - Don t revisit; Supports maximum use of imports Mirant Qualifying criteria needs to be made more stringent, less reliance on financial penalties PG&E secured in bilateral, included in RA Registry, and can participate in CAM 13

14 Resource Qualification Imports CAISO Assessment RAR Tariff: Imports limited by total system and path import capability as determined by CAISO Imports have DA MOO, no RT obligation unless selected in RUC (except for dynamically scheduled) Standardized product All QC should be treated the same with respect to availability and performance requirements 14

15 Resource Qualification Imports CAISO Assessment Imports May be warranted to re-examine qualifying criteria; but don t want to discourage Accommodate limited amount of seasonal capacity swaps? Would forward obligation inhibit imports? 15

16 Must Offer - Proposals CFCM Must Offer to DA, RUC, RT and AS; If not selected, no obligation. Supply obligation is transferable External cannot be selected to meet local and must offer obligation Mirant Consistent with CAISO Tariff Control area certification process for imports or mechanism to discount Constellation - DA Must Offer Obligation and RUC 16

17 Must Offer Obligation - CAISO Assessment Continuation of must offer requirements for RA resources from DA, RUC, and into RT Must offer for Energy and AS Imports not qualified to meet local capacity requirements 17

18 Performance Standards - Proposals CFCM Availability metric: EFORd as all hours availability metric and EFORp to provide additional incentive during peak hours Penalty to units not available Only in year of underperformance Does not adjust QC of resource, except if chronic 18

19 Performance Standards - Proposals Mirant Net Qualifying Metric, based on UCAP, QC based on past performance and adjusted QC Penalties for non-compliance Constellation Net Qualifying Metric like Mirant Strong performance incentive where current year forced outages impact QC in subsequent period 19

20 Performance Standards CAISO Assessment Clear rules for compliance, performance requirements, capacity targets, and qualifying capacity CAISO has provisions in Tariff that provide for determination of Net QC: Deliverability, Performance, Testing Specific performance metrics should address overall and peak availability Impacts on current year capacity payments provides incentives to perform 20