1 Market Evolution Program Regulatory Affairs Standing Committee Meeting September 11, 2003.

Slides:



Advertisements
Similar presentations
Achieving Price-Responsive Demand in New England Henry Yoshimura Director, Demand Resource Strategy ISO New England National Town Meeting on Demand Response.
Advertisements

EMIG Electricity Market Investment Group Presentation to the Ontario Energy Board February 17, 2004.
Gloria Godson VP, Federal Regulatory Policy Reliability Pricing Model Part 2.
The information in this presentation has been collated by ELEXON and while all due care has been taken to ensure the accuracy of this information, ELEXON.
Convergence Bidding Overview Margaret Miller Manager, Market Design & Regulatory Policy CPUC Convergence Bidding Workshop August 26, 2010.
CPUC Procurement Policies Robert L. Strauss California Public Utilities Commission Energy Division - Procurement Section.
NARUC-FERC Demand Response Collaborative Meeting NARUC Fall Meeting Anaheim, CA T. Graham Edwards President & CEO November 11, 2007.
Concerns with RUC Capacity Short Charge and Energy Trades.
1 The Midwest ISO At the Crossroads of America International Meeting of Very Large Power Grid Operators October 24 & 25, 2005 Beijing, China.
MISO’s Midwest Market Initiative APEX Ron McNamara October 31, 2005.
Luis A. Camargo S. Wholesale Electricity Market Manager Colombia The Andean Electricity Market -TIE- Cartagena de Indias, October 14&15th
Towards Regional Independent Operators – a main driver for successful market integration.
1 Resource Adequacy and Market Power Mitigation via Option Contracts Hung-po Chao and Robert Wilson EPRI and Stanford University Presentation at POWER.
Solutions to California’s Energy Crisis: Real-Time Pricing by Frank Wolak Chairman, Market Surveillance Committee March 17, 2001.
Utility Regulation March 10, 2011 Raj Addepalli Deputy Director, Electric, Office of Electric,Gas and Water New York State Department of Public Service.
The Convergence of Market Designs for Adequate Generating Capacity Peter Cramton and Steven Stoft 24 March 2006.
Market Overview in Electric Power Systems Market Structure and Operation Introduction Market Overview Market Overview in Electric Power Systems Mohammad.
Overview of LMP Markets Features of ISOs / RTOs David Withrow Senior Market Economist Fall 2007 Meeting of the NARUC Staff Subcommittee on Accounting and.
North American Electricity Markets APEX Paris, France October 15-16, 2007 Kenneth Laughlin, PJM.
Demand Response in MISO Markets NASUCA Panel on DR November 12, 2012.
Gas & Power Coordination: Growing Pains in Time of Transition Mark Stultz, BP Natural Gas Supply Association OPSI Annual Meeting Chicago, Illinois October.
Economic Demand Response Sheldon Fulton Executive Director, IPCAA November 4, 2008.
October 8, 2003 Market Advisory Council of the IMO1 Market Evolution Program Update Drew Phillips/Edward Arlitt Leonard Kula/Jason Chee-Aloy.
Welcome New York Independent System Operator. (Pre-NYISO) Regulated Market Physical contracts Regulated industry Cost Based System Two Party Deals Bundled.
Challenges for the SEM.  Day-ahead price coupling is a key feature of the final draft Framework Guidelines on congestion management issued by ERGEG in.
Overview of the North American and Canadian Markets 2008 APEX Conference in Sydney, Australia October 13, 2008 Hung-po Chao Director, Market Strategy and.
CMSC Rules Changes under Consideration Market Operations Standing Committee December 3, 2003 PUBLIC.
Overview of the Capacity Markets in the United States 2008 APEX Conference in Sydney, Australia October 13-14, 2008 Hung-po Chao Director, Market Strategy.
FERC’s Role in Demand Response David Kathan ABA Teleconference December 14, 2005.
1 Capacity Markets Investment in Generation Capacity Payments October 31, 2005 J. W. Charlton.
Marjket Operations Standing Committee IMO Day Ahead Market Design Update Market Operations Standing Committee September 22, 2003 Market Evolution Program.
Bulk Power Transmission System
Colombia’s Forward Energy Market Peter Cramton University of Maryland 5 November 2007.
“Demand Response: Completing the Link Between Wholesale and Retail Pricing” Paul Crumrine Director, Regulatory Strategies & Services Institute for Regulatory.
Demand Response Workshop September 15, Definitions are important Demand response –“Changes in electricity usage by end-use customers from their.
1 Electricity System and Energy Market Basics David J. Lawrence Manager, Auxiliary Market Products Prepared for: RGGI I&L Workshop June 15, 2006.
PJM©2013www.pjm.com Economic DR participation in energy market ERCOT April 14, 2014 Pete Langbein.
Capacity mechanisms in Europe The fundamental issues behind the ongoing sector enquiry Session 2 - If a capacity mechanism, which design is most appropriate?
Review of CAISO Wholesale Electricity Market Trends APEX Sydney Conference California Electricity Wholesale Market Trends October 13, 2008 Anjali Sheffrin,
An update on the Market Development Program Phil Bishop New Zealand Electricity Commission Presentation to the EPOC Winter Workshop 3 September 2009.
1 Market Evolution Program Long-Term Resource Adequacy Regulatory Affairs Standing Committee Meeting May 14, 2003.
1 October 2003 Electricity Markets Regional Evolution Randy Berry
PJM© Demand Response in PJM 2009 NASUCA Mid-Year Meeting June 30, 2009 Boston, MA Panel: Price Responsive Demand – A Long-Term Bargain.
PJM © 2006 The Institute for Regulatory Policy Studies Illinois State University Conference May 12, 2006 Jeff Bladen PJM Interconnection.
PJM©2013www.pjm.com Demand Side Working Group Loads in SCED Angelo Marcino Real-Time Market Operations – PJM April 14, 2014.
DAM Design Issues - Participants & Obligations May 12, 2003 Market Evolution Program.
1 Market Operations Standing Committee Meeting April 23, 2003 Market Evolution Program.
Northern Mini Forum Copenhagen, 27 June 2006 Gunnar Lundberg Chair of the EURELECTRIC WG Wholesale Markets & Trading Vice Chair of the Markets Committee.
Illinois Wholesale Market Update December 10, 2003.
To Buy or To Build Is it really one or the other? APPA New Generation Workshop Portland, Oregon August 1, 2007.
Day Ahead Market Working Group Meeting October 30, 2003 Market Evolution Program Sub-topic: Design Overview to Settlements, Prudentials and Payment Functions.
SAWG Update to WMS September 2 nd, 2015 Brandon Whittle.
Market Operations Standing Committee March 5, 2003.
Role Of ERC in the WESM To enforce the rules and regulations governing the operations of the WESM and monitors the activities of the Market Operator and.
02/18/2003Market Advisory Council of the IMO1 Market Evolution Program Document ID #: MAC
Market Evolution Program. 2 Topics Overview of the Market Evolution Program Consultation Plan for Phase 1 Overview of the Market Evolution Program Consultation.
1 Market Evolution Program Day Ahead Market Project Regulatory Affairs Standing Committee Meeting May 14, 2003.
Development and Implementation of a Coordinated Model for Regional and Inter-Regional Congestion Management Development and Implementation of a Coordinated.
Texas Nodal Program ERCOT Readiness & Transition (ERT) Supplemental Information TPTF January 12, 2009 Kevin Frankeny.
CPUC Resource Adequacy Program – LAO briefing May 25, 2009.
Joint Energy Auction Implementation Proposal of PG&E, SCE and SDG&E California Public Utilities Commission Workshop – November 1, 2006.
Resource Adequacy and Market Power Mitigation via Option Contracts
Consolidated EIM Initiatives from 2017 Roadmap Issue Paper
Electricity Wholesale Markets: Designs for a low-carbon future
The Future of Demand Response in New England
Benefits of New England’s Proposed Capacity Market
Market Design in New England
Market Evolution Program Update
Market Evolution Program
Market Pricing Initiatives Update September 9th, 2003
Presentation transcript:

1 Market Evolution Program Regulatory Affairs Standing Committee Meeting September 11, 2003

2 Market Evolution Program agenda  Long Term Resource Adequacy  Day Ahead Market

3 Long-Term Resource Adequacy Overview Today’s Discussion:  Recap from May 14 RASC meeting  Description of Paths  Recommendations from Feasibility Assessment  Long-Term Resource Adequacy Working Group Update  Next Steps

4 Long-Term Resource Adequacy Recap from May 14 RASC meeting :  Long-Term Resource Adequacy Working Group Feasibility Assessment (June 2003) LTRA Objectives LTRA Evaluation Criteria Barriers to Investment LTRA Paths and Options

5 Long-Term Resource Adequacy Paths  Path A: Complete the initial market design and structures without an explicit Resource Adequacy Requirement (RAR) Rely on results of improved energy and ancillary service markets alone (e.g. Pricing Team work, day-ahead market, multi-interval optimization, etc.)  Path B: Create Load Serving Entities (LSE) and assign a RAR to these entities LSEs required to contract forward capacity requirements through bilateral contracts (different to bilateral contracts for energy) IMO could administer a resource adequacy auction market (similar to NYISO and PJM) as a complementary element to LSE capacity contracts  Path C: Allow a central agency to procure adequate resources and allocate the resource acquisition costs to loads IMO administers a resource adequacy auction market and secures forward capacity on behalf of loads (NYISO, PJM and ISO NE are developing) As a mechanism of last resort (different to above), a government agency (e.g. OEFC) could contract forward capacity

6 Recommendations from Feasibility Assessment Fundamental recommendations relating to policy decisions: 1)Barriers to investment must be addressed to better ensure market entry to address long-term resource adequacy 2)The ‘market buyer’ must be defined (in particular, for small default electricity consumers) 3)Improvements to the current IMO-administered market design should be implemented, irrespective of the option to address long-term resource adequacy 4)Given the decision of who the market ‘buyer’ is, the ability and magnitude of spot prices to clear under shortage or near-shortage conditions must be addressed 5)The appropriate level of reliability must be decided

7 Recommendations from Feasibility Assessment Timeframe for making decisions: 6)An option to address long-term resource adequacy needs to be recommended no later than the end of this year In order to address potential inadequate future supply Recognizing sufficient lead-time required to develop new resources Provide potential investors with required signals

8 LTRAWG Update  LTRAWG is in the final stages of completing a Strawman that builds on the recommendations and work from the Feasibility Assessment  LTRAWG has acknowledged that the 3 Paths may not be mutually exclusive  LTRAWG is examining what aspects of each Path could be workable and designed to work together within an integrated manner

9 Market Evolution Program agenda  Long Term Resource Adequacy  Day Ahead Market DAM Chronology DAM Features and Benefits DAM Issues Next Steps

10 Day Ahead Market - Reprise  January - commence work on Day Ahead Market (DAM)  Feb 18 MAC - established Day Ahead Market Working Group (DAMWG) ~ 28 members from all industry sectors (generators, loads, transmitter, distributors, marketers, OEB and OEFC) meet every ~10 days - 22 meetings this year  April - recommend development of a comprehensive DAM that performs 2 functions... Market - allow participants to buy and sell energy and sell operating reserve and lock-in prices and quantities day-ahead Reliability - process to commit resources to meet forecast demand preferred by DAM WG members more closely aligned with DAMs in neighbouring markets  May 14 - Regulatory Affairs Standing Committee update

11 Day Ahead Market - Progress since May 14 RASC  late May - DAM hi-level design summary released (strawman r1)  June 11 MAC - MAC members provide consensus on recommendation to continue develop comprehensive DAM design  June and July - hi-level design concepts prepared and discussed  mid-August - DAM hi-level design released (strawman r2) DAM WG devoted 2 full days to its review

12 Market Evolution Program agenda  Long Term Resource Adequacy  Day Ahead Market DAM Chronology DAM Features and Benefits DAM Issues Next Steps

13 Day Ahead Market - Features Participation:  Participants with physical resources  Importers and Exporters  Virtual buyers and sellers - parties without physical resources ‘virtual’ offer (bid) to sell (buy) in the DAM also implies an obligation to buy (sell) back in the real-time market (RTM) at RTM prices Three-part offers/bids:  Separate fixed and variable components of energy offer/bid Multi-pass dispatch and commitment engine:  DAM schedules are financially binding and consistent with transmission constraints  Optimized solution... over 24-hour period (hourly granularity) amongst three-part offer/bid components energy and operating reserve markets solved simultaneously

14 Day Ahead Market - Features Pricing DAM WG conclusion - a day-ahead market under a uniform pricing regime would be costly to implement and maintain, complex and confusing, and is not recommended. Strawman positions: Nodal pricing should be implemented in the DAM to reflect the actual cost of serving load at each location Suppliers and selected customers subjected to nodal prices selected customers include appropriately metered loads that opt to pay nodal price and dispatchable loads Remaining (most) loads would pay a ‘uniform’ price - weighted average of nodal prices A system of internal transmission rights will allow participants to hedge nodal price differences Note - requires that nodal pricing also be applied to the real-time market to maintain pricing consistency between markets

15 Day Ahead Market - Benefits DAM provides an improved point of convergence for forward products  DAM prices are transparent and predictable DAM less volatile than RTM greater liquidity in DAM nodal pricing assigns value to congestion efficiently DAM prices converge to RTM prices DAM allows participants to reduce exposure to real-time volatility  price certainty - participants have financial commitment for quantities bought/sold in DAM  operational certainty - DAM results allow participants to make critical operating decisions in advance of real-time

16 Day Ahead Market - Benefits DAM improves reliability  Allows for direct participation of loads in market additional opportunity for demand side responses - allows price-sensitive loads to participate in market without being dispatchable on 5-minute basis  Improved commitment process for all resources (generators and loads)  Intertie transactions implemented and priced day-ahead moves transactions to DAM from real-time market reduces uncertainty associated with intertie trading should reduce the number of failed intertie transactions and IOG payments in real-time market

17 Market Evolution Program agenda  Long Term Resource Adequacy  Day Ahead Market DAM Chronology DAM Features and Benefits DAM Issues Next Steps

18 Day Ahead Market - Issues For a DAM to be effective:  Pricing Issues must be addressed...  Both the RTM and DAM prices need to represent the actual costs of serving loads as reflected by competitive market prices.  Each of the mechanisms that currently distort market prices must be corrected.  Structural Issues must be addressed...  Buy-side - ‘market-buyers’ required for default supply customers  Supply-side - market power issues need to be addressed

19 Market Evolution Program agenda  Long Term Resource Adequacy  Day Ahead Market DAM Chronology DAM Features and Benefits DAM Issues Next Steps

20 Day Ahead Market - Next Steps In the coming months...  Complete final elements of high-level design  Complete significant parts of the detailed design  Begin writing market rules Expecting significant interaction with and contributions from stakeholders:  DAM WG  MAC - October 8  RASC, MOSC, ITSC  ad hoc meetings with stakeholder groups

21 -- END --

22 Supplemental Slide 1 - ‘Market-Buyer’ proposals A number of industry organizations and stakeholders have recently put forth proposals to increase load participation in the market, particularly for default supply customers... EDA - Beyond Bill 210  Contemplates an aggregator that will facilitate a contract-based approach to default supply  All consumers, large or small, should have option of entering in to fixed price contracts or taking spot price  The security of long term contracts will provide incentives for investment in new sources of supply AMPCO - DAM Position Paper  OEB should allow LDCs to procure SSS energy through the DAM  Dispatchable load participation will be enhanced by providing similar reciprocal treatment, as for generators, for commitment costs, and market payments for demand reduction

23 Supplemental Slide 2 - ‘Market-Buyer’ proposals Toronto Board of Trade - A Healthy Electricity Market  SSS should introduce default suppliers, selected through a competitive bidding process, to provide multi-year fixed price supply  Change should be implemented immediately; in the short-term to reduce subsidy to finance price freeze, in the long-term will provide stable prices for transition to eliminating price-cap in 2006  Customer education at all levels is required to restore confidence in a market-based electricity system -- OEB should take leadership role  Enhances investment in new sources of supply