1. National Market for Instantaneous Reserves
Project Overview
30 September 2016

2. Topics Background and Objectives Enablers and Terminology
Reserve Sharing Explained
Deployment and Transition
New NCC Operational Procedures
Changes to Manual Risk
Other RMT Changes

3. National Market for IR
Joint Electricity Authority and Transpower Initiative
Part of the wider Reserves and Frequency Management Programme
Replaces the interim FIR & SIR Sharing introduced in 2014 and 2015
Scheduled for implementation on October 20th.

4. What is NMIR
The ability to utilise (or share) reserve from one island to respond to events in the other.
Uses HVDC Round Power and Frequency Keeping Control capability
Roundpower:
The HVDC mode that allows energy to be transferred in opposite directions simultaneously on each pole
Frequency Keeping Control (FKC):
The HVDC operating mode that maintains the same system frequency in both islands
HVDC can share reserves to respond instantaneously to under frequency events from the other island

5. Objectives of NMIR
Reduce the quantity of instantaneous reserve procured
Sharing reserve allows us to cover largest national AC risk rather than each islands largest AC risk (once the HVDC risk is covered)
Access the lowest price instantaneous reserve
We can chase the lowest priced instantaneous reserve, not constrained to purchase in island

6. New Terminology NMIR introduces some new concepts
This brings new terminology – definitions handout is on our website
A few key ones:
Sharing Limit: The maximum quantity of FIR/SIR that can be procured for transfer to the other island
Shared Reserve: The quantity of FIR and SIR cleared to be shared between the two islands.
Forward Sharing: sharing reserves in the same direction as HVDC transfer
Reverse Sharing: sharing reserve in the opposite direction to HVDC Transfer
Reserve losses: Reserve lost on the HVDC when sent in the direction of energy transfer
Negative Reserve Losses: Reserve gained in the receiving island when shared in the opposite direction to HVDC energy transfer

7. Reserve Sharing Explained

8. When was HVDC first commissioned?
April 1965 – primarily used for energy transfer
20th/Oct/2016 – NMIR enables reserve sharing

9. Section Topics Why/What Reserve Sharing Limit Manage DC/AC risks (SIR)
New Concepts
Reserve Sharing Losses
Effectiveness Factors (Mike Phethean)
Shared Net Free Reserves (Shared NFRs)
Manage DC/AC risks (FIR)
High DC North Transfer Scenario

10. Why/What’s NMIR New HVDC functionality FKC - max modulation (±250 MW)
Receiving Island
+250MW
New HVDC functionality FKC - max modulation (±250 MW)
facilitates frequency keeping (Modulation Risk 30MW)
enables NMIR (Reserve Sharing)
Forward Reserve Sharing limit = MR
+MR
Set Point / Power Order
-MR
Reverse Reserve Sharing limit = MR
-250MW
Sending Island

11. Reserve Sharing Limit

12. Reserve Sharing Limit Forward Sharing Reverse Sharing
Only further constrained by (HVDCmax - MR - Energy) when DC energy transfer high
HVDCmax North = 1200MW
HVDCmax South = 850MW
Reverse Sharing
Same constraint (Energy - MR - Pmin) is used for Reverse Sharing to account for HVDC operational mode transition delays
Pmin = 35MW

13. No Reverse Sharing Zone
A ‘No Reverse Sharing Zone’ (for FIR between 22.5 and 65) is modelled in SPD to account for the delays of HVDC operational mode transitions.
Impacts
SPD solutions may be ‘sticking’ on certain MW points to keep the reverse sharing but resulting in energy price separation.

14. No Reverse Sharing Zone
NI Load +40MW
SI Energy $1
NI Energy $2
22.5 65
1st Solve: DCN = 22.5, FIR Reverse Sharing Quantity = 50MW
2nd Solve: $1 x 40 + $SI FIR x 50 ↔ $2 x 40
DCN = 62.5 (no reverse sharing means buy 50MW in SI but can share more to NI)
DCN = 22.5

15. Managing DC Risk

16. DC Reserves are procured from the receiving island only
Managing DC Risk
DC Reserves are procured from the receiving island only

17. Managing AC Risk

18. Reserve Sharing Losses
Why
Losses on shared reserves are significant at high levels of DC energy transfer
up to 10% of reserve transferred and
up to 20% in reduced voltage
Impacts
Forward Sharing will incur losses
Reverse Sharing will reduce losses

19. Reserve Sharing Losses
To island
Start MW
End MW
Reserve Sharing Losses% SI
683
0.055
To island
Start MW
End MW
Reserve Sharing Losses% NI
202.93
0.0075
700

20. Losses

21. Effectiveness Factors
HVDC frequency controls have time delays
Reserve in the non risk island is not as effective
Use a factor to reflect this difference in value
Initial factors = 0.8

22. Shared NFRs
SharedNFR = 1% x non-risk island load (excluding inertia-less load)
SharedNFRs use some of the Sharing Limit (HVDCB – MR)
SharedNFR (1% Sending Island Load)
SharedNFR (1% Receiving IslandLoad)

23. Losses/E-Factors/Shared NFRs
(Forward Sharing Quantity)actual
+ NI FIR Scheduled =
NI 6s Risk
(Forward Sharing Quantity)actual =
Effectiveness Factor x (Forward Sent – Losses)
NISharedNFR
+ % NI FIR Scheduled = Reverse Sent
≤ Reverse Sharing limit
DCN
≤ Forward Sharing limit
Forward Sent = % SI FIR Scheduled +
SISharedNFR
(Reverse Sharing Quantity)actual =
Effectiveness Factor x (Reverse Sent + Losses)
SI 6s Risk = SI FIR Scheduled
+ (Reverse Sharing Quantity)actual

24. Losses/E-Factors/Shared NFRs

25. Losses/E-Factors/Shared NFRs
Reserve Sharing Losses, Effectiveness Factors and Shared NFRs affect both
Scheduled Reserve Quantity and
Island Reserve Price

26. High DCN

27. Medium/Low DCN/RP

28. Summary DC Reserves are procured from the receiving island only
Forward Sharing
Only further constrained by (HVDCmax - MR - Energy) when DC energy transfer high
Reverse Sharing
Same constraint (Energy - MR - Pmin) is used for Reverse Sharing to account for HVDC operational mode transition delays
‘Sticky’ MW points
Reserve Sharing Losses/Effectiveness Factors/Shared NFRs affect both Scheduled Reserve Quantity and Island Reserve Price

29. Go Live Thursday October 20th 2016.
Deployment
Go Live Thursday October 20th 2016.

30. Future State
The NMIR project will be increasing the maximum possible quantity of FIR and SIR able to be shared to 220MW
The FKC limit of 250MW – the current 30MW modulation risk.
The actual quantity of IR able to be shared for any given trading period is dynamic based on a range of conditions.
Reserve, including shared reserve, will continue to be co-optimised by SPD.

31. This will take some getting used to
The new market behaviours will be different to what the market is used to
Staging the introduction to full sharing will reduce the frequency and scale of these new market characteristics in the short term
By staging the changes the market will be able to acclimatise to the ‘new normal’ as it takes effect
Staging minimises step changes in forward schedules and provides a forward view of the changes to participant

32. Market system deployment of October 20th 2016.
Restrict reserve sharing to 0MW for the period of the deployment window + 2hrs.
At the two hour mark after the change completes set the max sharing to 90MW (effective sharing will be 90MW – MR = 60MW) to best replicate the current interim sharing arrangements.
Leave the 60MW effective sharing limit in place for 3 weeks to let traders become familiar with it
After three weeks move to an interim 120MW effective sharing limit for a further three weeks to allow traders (period covers the planned HVDC outages in late November)
On 1 December set the full sharing limit of 220MW (i.e. FKC limit of 250MW-30MW modulation risk)
All changes in reserve sharing maximums to be future dated in the market system which will ensure they are able to make their way through the various schedules.

33. New NCC Procedures Round Power and FKC Status Changes

34. Managing Round Power
There are times when round power mode will need to be disabled
For example when the HVDC is Monopole or for live line work on the BEN HAY circuits
NCC will advise via a CAN when round power will be disabled

35. Managing FKC when Round Power is Disabled
With round power disabled FKC will need to disabled when HVDC transfer is low
NCC will no longer send CAN updates advising when FKC status changes
FKC status will be set based on a standard set of rules
These rules will be published on the system operator section of the Transpower website
A link to these rules will be included in the CAN that is sent advising round power is being disabled

36. FKC Status when Round Power is Disabled
Scenario:
Round power is disabled
HVDC transfers are low
FKC status will be modelled as Disabled on the HVDC Schedule as follows:
From the start of next period, in which the HVDC transfer is scheduled to be less than 70MW
FKC will be disabled for a minimum of 2hrs (4 trading periods)
FKC status will be modelled back to Enabled:
At the start of a 1hr period (2 trading periods) where the scheduled HVDC transfer is continuously greater than 100MW
FKC status will be continually monitored to these criteria any time round power is disabled.

37. Summary CANs will be issued when round power status changes
CANs will no longer be issued when FKC status changes
FKC status while round power is disabled will bet set following a standard set of rules
These FKC status rules will be:
Posted on our website
Linked to from our standard round power status CAN

38. Manual Risks
Manual risk groups will be co-optimised in SPD between energy and reserves
Stations that are single circuited and become N-1 risk stations could be affected
NCC coordinators may be required to issue a BSC to a station to follow its station dispatch if it is operated higher than the scheduled island risk

39. Upcoming RMT Changes

40. HVDC 5 second overload Existing feature of the HVDC
Using the opportunity of the NMIR changes to introduce
Will decrease FIR purchase by 5 to 40 MW for DC CE risks

41. Intermittent Generation (IG) MWmax
Current
Future
Figure used by Reserve Management Tool for Secondary Risk on IG
ACS declared MCR
MWmax - submitted as part of offer via WITS
Reduces reserves for ECE risks in both islands
Increases transfer before HVDC is the binding risk.
Reduces dispensation costs