Energy Imbalance Market Overview Presentation to: Portland General Electric EIM OATT Stakeholder Meeting David Timson Account Manager CAISO Strategic Alliances October 14, 2016
Topics for Discussion ISO overview Why have an EIM Definitions Basic operation and timing Balance and feasibility tests Market settlements Transmission service Changes with EIM Governance Slide 2
The ISO is a not for profit public benefit corporation. Our responsibilities: Operate transmission Balancing Authority Area Matches generation with load and maintains electric frequency of the grid Runs day-ahead and realtime markets for energy and ancillary services Manages energy imbalance market across participating areas Maintain reliability Plan for system expansion Interconnect resources Implement state s energy policies Slide 3
California ISO by the numbers 68,200 MW of power plant capacity (net dependable capacity) 50,270 MW record peak demand (July 24, 2006) 27,500 market transactions per day 26,000 circuit-miles of transmission lines 30 million people served 240 million megawatt-hours of electricity delivered annually Slide 4
Resource mix May 2016 Slide 5
Western Electricity Coordinating Council (WECC) CA is one of 14 states within WECC The ISO is one of 38 Balancing Area Authorities within WECC Resource sharing enhances reliability, helps achieve renewable targets and manages cost 25% of all the electricity that keeps the lights on during the summer comes from other areas in the west including parts of Canada and Mexico Slide 6
Changing resource mix over the next 10 years presents new operational challenges Over 20,000 MW of wind and solar capacity is expected to be interconnected by 2020 Increased supply volatility Potential changes to load patterns as a result of distributed generation and electric vehicles Changing, less predictable load patterns Approximately 18,000 MW of thermal generation will be repowered or retired by 2020 Uncertainty surrounding thermal resources o Phase out 12,000 MW of coastal plants with once-through cooling o Greenhouse gas reductions limit replacement generation o Water flow management affects hydro availability Slide 7
Power industry transformation Wind Unpredictable Output 4769 MW Peak April 12, 2014 Solar Thermal / Photo Voltaic Semi Predictable Output 8136 MW Peak July 26, 2016 Roof Top Solar Semi Predictable Output Behind the meter Residential 3500 MW Estimated Capacity Main Drivers: California RPS GHG reduction Once-through-cooled plants retirement Goals: Higher expectation of reliability Higher expectation of security Smart Grid Situational awareness through Visualization Slide 8
GWh Hydro vs. solar monthly production --- 2012 through October 2015 3,500 Hydro vs. Solar Monthly Production 3,000 2,500 2,000 1,500 1,000 500 0 J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O 2012 2013 2014 2015 Hydro Production Solar Production Slide 9
Energy Imbalance Market is an easily-scalable extension of real-time market to broader region Builds on existing market: automated dispatch facilitates renewable integration, resolves imbalances & avoids congestion Situational awareness enhances reliability FERC staff paper assessed EIM reliability benefits: http://www.caiso.com/documents/qualitativeassessment- PotentialReliabilityBenefits-WesternEnergyImbalanceMarket.pdf No critical mass required. No exit fees Easily scalable, low-cost, low risk, voluntary option for new participants Preserves BAA autonomy, including compliance, balancing, and reserve obligations Benefits increase with more transfer volume between BAAs Slide 10
Benefits from the Energy Imbalance Market are consistent with earlier analysis and growing Entity Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Savings (Million $) ISO 1.24 1.45 2.46 3.48 5.28 6.35 7.89 28.15 PacifiCorp 4.73 3.81 7.72 8.52 6.17 10.85 10.51 52.31 NV Energy 0.84 1.70 5.20 7.74 Total 5.97 5.26 10.18 12.00 12.29 18.90 23.60 88.20 Reduced renewable energy economic curtailment displaced greenhouse gas emitting resources: In Q1, reduced 48,342 metric tons of CO2 In Q2, reduced 67,930 metric tons of CO2 Reduced flexible ramping requirements across footprint 35-36% savings during 2016 Slide 11
Transfers among areas Slide 12
Wind/Solar avoided curtailment has significantly increased due to EIM. ISO began tracking avoided curtailment since Apr 2015. Avoided curtailment began to increase significantly after NV Energy joined the EIM in Nov 2015. Slide 13
EIM Interties Slide 14
Several key roles are involved in enabling EIM participation ESC PRSC EIM Entity is a balancing authority that enables EIM to occur in its area. By enabling EIM and coordinating with its area s loads, resources and transmission service providers, all load and generation imbalances within its area will settle through the EIM. EIM Entity Scheduling Coordinator coordinates and facilitates EIM for one or more EIM Entities, and is responsible for resource plans and financial settlements on behalf of non-participating resources and loads. Base Schedule Coordinator submits base schedules and resource plans. EIM Transmission Service Provider controls transmission in the EIM Entity BAA, and voluntarily informs EIM Entity that it is making its transmission available for EIM. EIM Participating Resource is a resource within the EIM Entity represented by a Scheduling Coordinator that voluntarily offers economic bids for availability in EIM s real-time market, subject to EIM Entity s eligibility requirements. EIM Participating Resource Scheduling Coordinator is certified to bid in ISO markets, submits bid, reports outages, and receives settlements and invoices. Slide 15
EIM entities and participating resources determine key aspects of participation EIM Entity determines: Eligibility of resource types (generators, participating loads & demand response, non-generator resources, etc.) Types of eligible dynamic transfers (dynamic schedules, pseudo-ties) Requirements of transmission service within its BAA Definition of Load Aggregation Points Settlement of EIM charges or credits to entities within its BAA EIM Participating Resource determines: Voluntary registration to participate in EIM Hour-to-hour quantity and price of economic bids Slide 16
Basics of EIM Operation & Settlement Base schedule: Forward energy schedule, including hourly load forecasts, generation schedules, and interchange schedules, form the baseline for EIM financial settlements. Resource plan: How to balance supply and demand and ensure resource sufficiency: Load, generation, and interchange base schedules Energy bids from participating resources Ancillary service plans Other inputs: Outages, telemetry, transmission capacity A resource is dispatched at its location, and is paid the nodal price Load pays the weighted average price of all load nodes in the Load Aggregation Point (LAP) Slide 17
Energy Imbalance Market Overview Demand Forecast Variable Energy Forecast Transmission Outages Generation Outages Transmission Limits Compile Hourly Resource Plan Participating resource hourly base schedule Participating resource energy bid range Non-participating resource hourly base schedule Hourly interchange schedules Slide18
Energy Imbalance Market Overview Economic Bids Demand Forecast Variable Energy Forecast Transmission Outages Generation Outages Transmission Limits EIM 15-Minute Market 15-Minute Schedule Unit commitment for shortstart resources Slide 19
Energy Imbalance Market Overview Economic Bids Demand Forecast Variable Energy Forecast Transmission Outages Generation Outages Transmission Limits EIM 5-Minute Dispatch Dispatch Instructions State Estimator Slide 20
Energy Imbalance Market Overview Hourly Base Schedule 15-Minute Schedule 5-Minute Dispatch EIM Settlement EIMPR SC Settlement Statement EIM Entity SC Settlement Statement for EIMNPR and load Meter EIM Entity SC Settlement Statement for EIM BAA Neutrality Slide 21
After advisory feedback period, interactive resource sufficiency evaluation prevents leaning among BAAs Resource sufficiency tests: Balanced load and generation? Free of congestion? Sufficient ramping capability? T-75: Base schedules and energy bids due T-55: Updated base schedules submitted T-40: Final opportunity to submit base schedules (Entity SC) T-20: E-tagging deadline (Entity SC) T-37.5: Start of Market 1 optimization T-45: Results of sufficiency test published T-60: Results of sufficiency test published (Balanced? Feasible transmission? Sufficient flexible ramping?) T EIM Market Participants 15-minute dispatch intervals (4.5 hour look-ahead) X:00 X:15 X:30 X:45 Y:00 5-minute dispatch intervals (65-minute look-ahead) T-22.5: 15-minute scheduled awards published Market Operator (T = start of the hour) Slide 22
EIM Tests Balancing Capacity Flexible ramp sufficiency Feasibility Slide 23
Base Schedule = 15 MW Base Schedule = 15 MW When loads deviate from their base schedules, resources must be re-dispatched to maintain balance. Meter = 17 MW Uninstructed Imbalance Energy = 2 MW. Charge for under-scheduling 2 MW energy Meter = 12 MW Uninstructed Imbalance Energy = 3 MW. Payment for overscheduling 3 MW energy For loads, uninstructed imbalance energy is the difference between the base schedule and the meter. Slide 24
The ISO settles with scheduling coordinators, who allocate payments and charges to the appropriate customers. Market Operator settles deviations of EIM Participating Resources from base schedules at LMP of resource locations. For resources that do not participate in EIM, Market Operator settles with EIM Entity Scheduling Coordinator who is responsible for settlement of Non-PR deviations from their base schedules. Slide 25
Real-time energy charge codes reflect cost causation. Primary settlement: instructed and uninstructed imbalance energy. Illustrative set of common charge codes (See http://www.caiso.com/documents/isomarketchargecodesmatrix.xls) Instructed Imbalance Energy (IIE) Uninstructed Imbalance Energy (UIE) Other settlements Bid Cost Recovery (ensures resources recover daily RT costs, recovered within BAA with EIM Transfer considered) Unaccounted for Energy (UFE) Congestion Offset (neutrality accounts by BAA) Marginal Losses Offset (neutrality accounts by BAA) Imbalance Energy Offset (can shift costs or payments between BAAs based on EIM Transfers) Greenhouse Gas Emission Cost Revenue EIM Administrative Charge Slide 26
Settlement statement timeline provides prompt clearing, with later changes limited to unresolved disputes or FERC decisions Initial settlement statement T+3B (uses estimated settlement meter data) Recalculation settlement statement T+12B, T+55B Disputes due T+26B, T+77B Recalculation settlement statement T+9M through T+36M (optional) Disputes limited to incremental charges only Slide 27
Transmission service uses simple principles EIM Entities make transmission capacity available through dynamic e-tag: Network service within EIM Entities allows redispatch up to network capacity EIM coordinates transmission usage with EIM participants Transmission Service Providers (e.g., Bonneville Power Administration) EIM transfers respect both scheduling rights and actual flow constraints ISO constantly updates EIM Entities NSI to reflect EIM transfers Reciprocity: To consider bids equally on economic merit, there is no incremental charge for transmission use associated with EIM transfers between EIM Entities EIM maintains existing transmission rate structures within EIM Entities Slide 28
What changes for reliability entities? If you are: Balancing Authority Current NERC and WECC responsibilities will not change May commit resources as they do today Manage interchange tagging Will be the EIM Entity Will submit balanced schedules to the Market Operator (ISO) Will communicate outage and operating limits information with Market Operator Transmission Owner, Transmission Operator, Transmission Service Provider (TSP) TSP determines available transmission capability (ATC) and prior commitments, to inform Market Operator of capacity available for EIM Transfers No other change in role or responsibilities Slide 29
If you are: What changes for market participants? Utility affiliated with EIM Entity Other Utility in EIM Entity BAA Resource (e.g., merchant generator) in EIM Entity BAA Submits load and resource information to Market Operator as well as EIM Entity BA Submits load and resource information to Market Operator as well as EIM Entity BA If electing to participate in EIM as an EIM Participating Resource Communicate availability through SC Provide outage information to Market Operator as well as EIM Entity BA Respond to dispatch instructions Scheduling Coordinator Submits bids and schedules for EIM participants Receives settlement statements and invoices from ISO Slide 30
EIM Governing Body Five-member body that exercises delegated authority over the rules of the western Energy Imbalance Market The five members must be independent of entities that participate in the ISO market, including the EIM Members are selected by representatives of all EIM stakeholders EIM Governing Body - seated June 28, 2016 Valerie Fong, (Retired) Director of Utilities, City of Palo Alto Doug Howe, Consultant, Vanry & Associates Carl Linvill, Principal, The Regulatory Assistance Project John Prescott, (Retired) President and Chief Executive Officer, Pacific Northwest Generating Cooperative Kristine Schmidt, President, Swan Consulting Services Slide 31
EIM body of state regulators and regional issues forum Body of State Regulators Primary function is to learn about the EIM, EIM Governing Body and related ISO developments that may be relevant to their jurisdictional responsibilities Provides forum for education and discussion, offer opinions to EIM Governing Body and ISO Board on matters of interest, represents 8 states Not restricted from taking any position before FERC, ISO BOG, or any other forum concerning matters related to the EIM or ISO. http://westernenergyboard.org/eim-bosr/what-we-do/ Regional Issues Forum Public vehicle for discussion of EIM-related issues, including impacts to neighboring balancing authority areas http://www.caiso.com/documents/eimregionalissuesforummembers.pdf Slide 32
Recap: EIM extends ISO s real-time market and systems to EIM participants Optimized 15 and 5-minute interval dispatch accounts for operating characteristics and constraints of participating resources as well as the underlying transmission system Multi-interval look-ahead anticipates changes in system conditions and ensure flexibility of dispatch to efficiently manage system balance and congestion Short-term unit commitment allows efficient economic dispatch, recognizing state-of-art renewable energy forecasts, hydro limits, complexity of resources like combined-cycle, and other factors The result is efficient use of transmission offered by EIM participants & cost reduction to consumers Slide 33
Resources available for EIM CBT - Introduction to the Energy Imbalance Market This Computer Based Training provides a high level overview of the Energy Imbalance Market http://content.caiso.com/training/introduction%20to%20eim/my%20articulate%20projects/introduction% 20to%20the%20Energy%20Imbalance%20Market/player.html CBT - How the Energy Imbalance Market Works This Computer Based Training describes the roles and responsibilities of the key players in EIM and the business processes that will take place. http://content.caiso.com/training/howeimworks/player.html EIM Stakeholder processes and tariff filings http://www.caiso.com/informed/pages/stakeholderprocesses/energyimbalancemarket.aspx EIM Business Process Manual http://bpmcm.caiso.com/pages/bpmdetails.aspx?bpm=energy Imbalance Market Slide 34
For additional information please contact: David Timson CAISO dtimson@caiso.com Slide 35