THE STATE OF ANCILLARY SERVICES IN NORTH AMERICA

Transcription

1 CONFERENCE THE STATE OF ANCILLARY SERVICES IN NORTH AMERICA Encore At Wynn Las Vegas Pre-Conference Workshop CRITICAL ELEMENTS OF ANCILLARY SERVICES MARKET DESIGN June 17, 2015 Sponsors is authorized by IACET to offer 1.0 CEUs for the conference and 0.4 CEUs for the workshop. 1

2 OVERVIEW This 19th annual Ancillary Services conference provides an expert forum for utilities, LSEs, LDCs, market participants, industrial loads, service/technology providers and regulators dealing with ancillary services to: Review ancillary service fundamentals, including cost and benefits Discuss the full range of applications and resources that can provide ancillaries Examine current market efforts to overcome ancillary services (A/S) market participation barriers and optimize their solutions Recognize immediate, emerging and potential economic opportunities for A/S market participation Address constraints and opportunities relating to changes in Regulation and Reserve requirements and markets Determine the potential applications and issues associated with emerging fast ramp and response products In the last few years, the role of ancillary services (A/S) in assuring North American power system reliability has broadened significantly. The provision of regulation and other services used to be the exclusive domain of generators and other supply sources. That bias has been addressed in part through several FERC Orders and ISO/RTO measures to enable demand side and other variable energy resources (VERs) to now compete for providing all the ancillary services, including regulation and spinning reserves, in several regions. Yet, there s more to be done. Issues like valuing dispatchable capacity, using demand curves to gauge the market, evaluating increasing wind penetration impacts, effective scarcity pricing, fleet and fuel switching, system co-optimization, usage of operationally complex plants, and storage all become critical issues to understand as the role of ancillary services expands. This conference will inform attendees through specific updates on how ISO/RTO markets and independent balancing areas in North America are satisfying expanding ancillary services needs. In addition, it will consider how regulatory and policy drivers influence ancillary services market mechanisms. It will also examine issues and strategies that market participants can invoke to improve their performance in providing ancillary services. WHO SHOULD ATTEND Power industry personnel who need to have a better understanding of what Ancillary Services are, how they are competitively procured, how they are scheduled, and how and when they are called upon Portfolio managers and traders responsible for formulating bidding strategies for ancillary services Power-plant and systems operations engineers who would like to understand the impact of ancillary services on their plant profitability Genco and DR executives who need a good understanding of the potential impacts and opportunities of ancillaryservice markets on their operations Personnel of Independent System Operators, attorneys, and regulators who need to understand the function of ancillary services, co-optimization measures, and reliability implications in various markets Power marketing professionals responsible for optimizing their fleet utilization and profitability Demand side, demand response and aggregation services that must capitalize on access opportunities across multiple AS markets Gave a breadth of participants and perspectives across multiple markets. Manager, SCE Combination of workshops and invited conference speakers provided a rich knowledge base to benefit from. Corporate Engineer, Alstom Grid 2

3 LEARNING OUTCOMES Interpret FERC Orders and other actions that affect A/S markets Address participation challenges in the Regulation markets Evaluate A/S cost, value and bidding approaches Review the impact of FERC s pay-for-performance order on the A/S markets Examine demand-side ancillary services market applications Identify the options of faster response and ramp products and services Assess the capacity value of demand response in A/S Consider the impact of CAISO EIM and NWPP efforts on western interconnect balancing conditions AGENDA Thursday, June 18, 2015 Excellent group of diverse attendees conference was a great chance to speak to a variety of experts. 8:00 8:30 a.m. Registration and Continental Breakfast Economic Value Manager, GE Power & Water 8:30 9:30 a.m. Ancillary Services in North American Organized Markets This introductory session will orient the conference on the key drivers that are shaping the conditions around ancillary services for utilities, balancing areas and bulk system operators. - Erik Ela, Senior Technical Leader, EPRI 9:30 10:30 a.m. Significant Developments in Ancillary Services Markets This session will identify several of the major issues and developments that have influenced the conduct and development of ancillary services (A/S) markets in recent months, including: Pay-for-Performance Regulation (FERC Order 755) Demand-side ancillary services Shortage pricing New A/S product/service development o Ramp enhancement o Inertia CAISO Energy Imbalance Market NWPP SCED Initiative Following this overview, each of the market concepts will be discussed by market administrators and market participants in ensuing sessions. - Scott Harvey, Economist, FTI Consulting 10:30 10:50 a.m. Morning Break Very full agenda. Certainly didn t waste any time. Good variety of topics. Well done! There was almost too much material to digest. Manager Market Design & Regulatory Policy, CAISO 3

4 AGENDA Thursday, June 18, 2015 (Continued) 10:50 a.m. 12:15 p.m. Pay-for-Performance Regulation (FERC Order 755): Is It Accomplishing What the Regulators Anticipated? This discussion will revolve around what is happening in certain organized markets since FERC issued its FERC Order 755 ruling. Do the markets really need this fast response to regulation requirement? How can they accurately quantify the need? Will less regulation be required for the same system? Has it, or will it, result in rapidly expanding opportunities for energy storage and fast regulation technology, as well as demand side energy resources, etc.? Can the markets implement the necessary measures to effect the desired outcome of resource selection based on higher ramp characteristics all at once? Or, can this outcome better be achieved through separate, measured, short-term and long-term adjustments? - Ron Coutu, Manager Business and Technology Solutions, ISO-NE - Scott Benner, Senior Engineer, PJM Interconnection - Dhiman Chatterjee, Senior Manager Market Design & Delivery, MidContinent ISO (MISO) (Invited) 12:15 1:30 p.m. Group Luncheon 1:30 3:30 p.m. Are Flexible and Fast Response Technologies Ancillary Services or Capacity Products? What technologies support the grid s changing needs? Should products that provide fast response resources be differentiated and incentivized by markets? Should these be considered ancillary services products or something else? Two ISOs that have moved to establish market products for fast ramp and related resource products will discuss why and how they did it, as well as what types of market participants will benefit. Technical experts from the software modeling sector, the OEM sector and the grid analysis sector will weigh in with their thoughts on these innovations. - Mikael Backman, Director Market Development, Wartsila Power Plants - Steven Broad, Lead Consultant, Energy Exemplar - Dhiman Chatterjee, Senior Manager Market Design & Delivery, MidContinent ISO (MISO) (Invited) - Erik Ela, Senior Technical Leader, EPRI - Karl Meeusen, Market Design and Regulatory Policy Lead, California ISO (CAISO) 3:30 3:45 p.m. Afternoon Break 3:45 5:00 p.m. Examining Reserve and Regulation Shortage Pricing This panel will discuss: Whether markets should rely on scarcity pricing to assure resource adequacy? What price should the system operator be required to pay, and what level of reserves should the system operator maintain during shortage conditions? If offer prices should be allowed to set prices during reserve shortages or are caps truly necessary? Whether scarcity pricing should be imposed for insufficient ramp capability to meet load and maintain reserves, and if regulation should be differentiated from scarcity pricing imposed for insufficient generation capacity? What are the consequences of how each organized A/S market handles reserve shortage conditions? - Ron Coutu, Manager Business and Technology Solutions, ISO-NE - Scott Harvey, Economist, FTI Consulting - Resmi Surendran, Senior Manager - Market Analysis & Design Team, ERCOT - Brian Theaker, Director of Market Affairs West, NRG Energy (invited) REGISTER 4601 TODAY! DTC Blvd., CALL Suite OR VISIT 4

5 AGENDA Friday, June 19, :00 8:30 a.m. Continental Breakfast 8:30 9:15 a.m. In 2015, Can Demand Side Ancillary Services Participate Economically in the A/S Markets? Given the load plateau that many utilities, LSEs, and system operators are experiencing, combined with the prevailing relatively low fuel costs, how significant a role can DR play in the market? Can it continue to compete if load growth remains sluggish and energy as well as capacity prices stay low? With expanding renewable and variable energy resources coming into the resource stack, can DR and its demand side cousins perform firming functions? A large, industrial service provider discusses how the DR market has changed and what the near-term prospects look like. - DeWayne Todd, Global Director Energy and Demand Response, Alcoa 9:30 10:15 a.m. Efficient Bidding and Settlements in Co-optimized A/S Markets This segment will address frequently-asked questions on ISO ancillary services bidding strategies: Does co-optimization produce a schedule that minimizes the total ISO production costs? Does co-optimization produce a schedule that maximizes profits for market participants? Is it possible to validate that the DA & RT schedule that market participants receive from the ISO is optimal for a generation fleet? How should market participants formulate Energy and A/S offers to maximize profits? How does Mileage-Regulation Payment or Pay for Performance work at the settlement level? As more variable-energy resources come online, are new A/S products required? - Tony Delacluyse, Director, PCI 10:15 10:30 a.m. Morning Break 10:30 11:15 a.m. When Does It Make Sense for Utilities (VIEUs) in Non-ISO Balancing Authorities to Work with IPPs to Provide A/S? As variable and distributed energy resources penetration increases and distribution systems as well as the grid must adapt in ways that they were not originally intended to the hold back and other operational requirements of VIEUs to maintain reliability in non-iso control areas are increasing and adding costs. With the issuance of several recent FERC Orders, is it possible that the introduction of third party providers, new technologies or expanding the size of the ancillary region could improve the efficiency of the market and provide an opportunity for VIEUs to reduce operating cost? If this were to occur, might it lead to new coordination, operational or pricing challenges? Or will having additional resources to call on provide the VIEU s with the ability to more effectively manage the un-forecastable variability or large system swing of intermittent resources? This segment will feature a discussion of both the plausibility and desirability of expanding the A/S opportunities. - Dan LoBue, President, Competitive Energy Consulting 11:15 a.m. 12:00 p.m. Open Forum: How Will Impending Market Changes in the West Influence the Development of Ancillary Services Markets? In the face of increasing wind and solar penetration in combination with the introduction of intra-hour (15 min) scheduling many utilities and balancing areas (BAs) in the western interconnect have decided to go a quasi-market route to satisfy their burgeoning energy imbalance and ancillary services requirements. Market participants with varying perspectives will discuss what they think about CAISO s EIM creation that now incorporates some non-iso utilities, while NWPP weighs the implementation of a coordinated energy imbalance effort among several balancing areas (BAs). Will this trend reach to the Rockies? How about down to Arizona? 12:00 p.m. Conference Adjourns 5

6 PRE-CONFERENCE WORKSHOP: CRITICAL ELEMENTS OF ANCILLARY SERVICES MARKET DESIGN WEDNESDAY, JUNE 17, 2015 OVERVIEW This workshop will focus on developing an in-depth understanding of four features of ancillary service market design: 1. Co-optimization in the scheduling and dispatch of energy and ancillary services 2. The theory and practice of reserve and regulation shortage pricing 3. The pricing and scheduling of demand side ancillary services 4. Market design approaches to scheduling and pricing ramp capability. LEARNING OUTCOMES Assess the reasons co-optimization of energy and ancillary services is becoming a standard feature of wholesale power markets and how they function Examine the relationship between ramp constraints, regulation shortage prices, price variability, and the returns to being on dispatch. Analyze and understand how the development of demand ancillary services is related to the level of price caps and the introduction of meaningful shortage pricing. WORKSHOP INSTRUCTOR Scott Harvey / Consultant / FTI Consulting Scott Harvey is a consultant in the Boston office of FTI Consulting. Prior to joining FTI in 2010, he was a consultant for 12 years with LECG and 11 years with Putnam, Hayes and Bartlett, Inc. He has been actively involved at FTI, LECG, and PHB with the restructuring of the PJM, New York and New England Power Pools, the development of the MISO Stage 2 congestion management system, and the development and implementation of the California ISO s MRTU market design in April He is currently a member of the Midwest ISO s market advisory committee, a member of the California ISO s market surveillance committee and continues to consult for the NYISO on a wide variety of issues. 6

7 WORKSHOP AGENDA PRE-CONFERENCE WORKSHOP: CRITICAL ELEMENTS OF ANCILLARY SERVICES MARKET DESIGN WEDNESDAY, JUNE 17, :30 1:00 p.m. Registration 1:00 4:45 p.m. Workshop Timing I. Overview of Ancillary Services Pricing II. III. IV. Co-Optimization of Energy and Ancillary Services o Why is co-optimization needed for economic efficiency? o How does co-optimization work? Reserve and Regulation Shortage Pricing o Overview of Alternative Scarcity Pricing mechanisms o The advantages of reserve shortage pricing o How does reserve shortage pricing work o Determining energy prices in markets with reserves shortage pricing and co-optimized energy and ancillary service markets o Ramp constraints, price spikes and regulation shortage values o The role of scarcity pricing in markets with capacity requirements Demand Side Ancillary Services o Why utilize demand side ancillary services? o Bidding and pricing for demand side ancillary services o Negawatt pricing and the provision of demand side ancillary services. 7

8 IACET CREDITS EVENT LOCATION has been accredited as an Authorized Provider by the International Association for Continuing Education and Training (IACET). In obtaining this accreditation, has demonstrated that it complies with the ANSI/IACET Standard which is recognized internationally as a standard of good practice. As a result of their Authorized Provider status, is authorized to offer IACET CEUs for its programs that qualify under the ANSI/IACET Standard. is authorized by IACET to offer 1.0 CEUs for the conference and 0.4 CEUs for each workshop. INSTRUCTIONAL METHODS PowerPoint presentations and case studies will be used in program. REQUIREMENTS FOR SUCCESSFUL COMPLETION OF PROGRAM Participants must sign in/out each day and be in attendance for the entirety of the conference to be eligible for continuing education credit. A room block has been reserved at the Encore At Wynn Las Vegas, 3131 S Las Vegas Blvd, 89109, for the nights of June 14-18, Room rates are $199 + $29 resort fee, plus applicable tax. Call for reservations and mention the program to get the group rate. The cutoff date to receive the group rate is May 14, 2015, but as there are a limited number of rooms available at this rate, the room block may close sooner. Please make your reservations early. SPONSORSHIP OPPORTUNITIES Do you want to drive new business through this event s powerful audience? Becoming a sponsor or exhibitor is an excellent opportunity to raise your profile before a manageably sized group of executives who make the key purchasing decisions for their businesses. There is a wide range of sponsorship opportunities available that can be customized to fit your budget and marketing objectives, including: Platinum, gold, or VIP sponsor Workshop sponsor Reception host Lanyard sponsor Networking break host Luncheon host Tabletop exhibit Breakfast host Custom sponsorship opportunities are also available. Please contact Stephen Coury at or scoury@euci. com for more information. PROCEEDINGS A copy of the conference proceedings will be distributed to attendees at the event. REGISTER 3 SEND 4TH FREE Any organization wishing to send multiple attendees to these conferences may send 1 FREE for every 3 delegates registered. Please note that all registrations must be made at the same time to qualify. REGISTER 4601 TODAY! DTC Blvd., CALL Suite OR VISIT 8

9 REGISTRATION INFORMATION EVENT LOCATION Mail Directly To: Electric Utility Consultants, Inc. () 4601 DTC Blvd., Ste. 800 OR, scan and to: PLEASE REGISTER THE FOLLOWING THE STATE OF ANCILLARY SERVICES IN NORTH AMERICA CONFERENCE AND PRE-CONFERENCE WORKSHOP, JUNE 17-19, 2015: US $1895 :: EARLY BIRD ON OR BEFORE JUNE 5, 2015: US $1695 THE STATE OF ANCILLARY SERVICES IN NORTH AMERICA CONFERENCE ONLY JUNE 18-19, 2015: US $1495 :: EARLY BIRD ON OR BEFORE JUNE 5, 2015: US $1295 CRITICAL ELEMENTS OF ANCILLARY SERVICES MARKET DESIGN PRE- CONFERENCE WORKSHOP ONLY: US $595 :: EARLY BIRD ON OR BEFORE JUNE 5, 2015: US $495 How did you hear about this event? (direct , colleague, speaker(s), etc.) A room block has been reserved at the Encore At Wynn Las Vegas, 3131 S Las Vegas Blvd, 89109, for the nights of June 14-18, Room rates are $199 + $29 resort fee, plus applicable tax. Call for reservations and mention the program to get the group rate. The cutoff date to receive the group rate is May 14, 2015, but as there are a limited number of rooms available at this rate, the room block may close sooner. Please make your reservations early. ENERG ZE WEEKLY s Energize Weekly newsletter compiles and reports on the latest news and trends in the energy industry. Newsletter recipients also receive a different, complimentary conference presentation every week on a relevant industry topic. The presentations are selected from a massive library of more than 1,000 current presentations that has gathered during its 28 years organizing conferences. Sign me up for Energize Weekly. Print Name Job Title Company What name do you prefer on your name badge? Address City State/Province Zip/Postal Code Country Telephone List any dietary or accessibility needs here CREDIT CARD Name on Card Account Number Billing Address Billing City Billing State Billing Zip Code/Postal Code Exp. Date Security Code (last 3 digits on the back of Visa and MC or 4 digits on front of AmEx) OR Enclosed is a check for $ to cover registrations. All cancellations received on or before May 15, 2015, will be subject to a US $195 processing fee. Written cancellations received after this date will create a credit of the tuition (less processing fee) good toward any other event or publication. This credit will be good for six months. In case of event cancellation, s liability is limited to refund of the event registration fee only. For more information regarding administrative policies, such as complaints and refunds, please contact our offices at reserves the right to alter this program without prior notice. 9