1. SCED Power Balance Penalty Curve
Resmi Surendran

2. Objective Explain the Power Balance Penalty Curve
Discuss the values for the Power Balance Penalty Curve
MW break points
Penalty for violation up to the MW break point
Not to discuss the optimal mechanism for setting scarcity pricing.

3. Power Balance Penalty
System Lambda is the change in the objective value obtained by relaxing the Power Balance constraint by 1MW
Power Balance Penalty is the maximum cost paid for one addition/less MW of generation to meet the Power Balance constraint.

4. SCED Constraints Power Balance Constraint Transmission constraint
sum (Base Point) + under gen slack – over gen slack
= Generation to be dispatched
Transmission constraint
sum( Shift Factor * Base Point) – violation slack ≤ limit
Ramp Limit constraint
LDL ≤ Base Point ≤ HDL

5. SCED Objective Minimize + Cost of dispatching generation
integral (offer cost * MW dispatched)
+ Penalty for violating Power Balance constraint
sum (Penalty cost * violation amount)
+ Penalty for violating transmission constraint

6. PB Violation with no Transmission Constraints
Only constraints active will be System demand & ramp
Given enough SURAMP, PB will not be violated as long as the aggregated offer curve required to meet demand is less than PB penalty
If PB Penalty is lower than SWCAP then PB will be violated in SCED1 before dispatching Resources on Output Schedule

7. PB Violation with Transmission Constraints
Gen with +ive SF
SF * TC_Penalty + Offer cost
PB_penatly
If (a) > (b) - moved down for resolving constraints
If (a) < (b) - moved up for meeting Power Balance
Example
Violated TC penalty $3500; 0.2 SF; $100 0ffer cost ; $500 PB penalty
1 MW reduction in generation will
reduce TC violation by 0.2 MW
will reduce objective by 0.2 * due to reduction in TC violation and $100 by not providing 1MW energy
violate PB by 1 MW
Will increase objective by 1* $500
During scarcity if a transmission constraint is violated then transmission constraint and Power Balance constraint will interact with each other to determine whether to move up or move down a resource with +ive SF to the violated constraints if there are no other resources available.

8. Power Balance Penalty Curve - Implementation
10 segment step curve
MW break points
Sets amount violated for a given price
Penalty for violation up to the MW break point
Sets system lambda for a given amount of violation

9. Factors affecting Power Balance Violation
Ramp limited scenarios
Operational Philosophies
Extend of ramp being reserved for regulation
Amount of capacity on Output Schedule
Telemetry errors
Capacity Scarcity

10. Current Power Balance Penalty Curve Values
Over Generation Penalty ($/MWh)
-3,001
-5,000
MW Cap Segment (MW)
10,000
100,000
Under Generation Penalty ($/MWh)
3,001
5,000
MW Floor Segment (MW)
equivalent to having extra capacity for meeting power balance violation at
(+/-) 3001 $/MWh for violated MW from 0MW to MW, and
(+/-) 5000$/MWh for violated MW from 10000MW to MW

11. Proposed Power Balance Penalty CurveMW
Price 1
200 5
250 10
300 20
400 30
500 40
1000 50
2250
 100000
 3001

12. Factors Considered Extend of regulation that can be sacrificed
Operational philosophies
System Wide Offer Cap - $3000
Interaction with transmission constraints
Interaction with proxy offer curves
Market Trials and close loop test results

13. Future Areas of Improvement for Better Scarcity Pricing
Prices not reflective of scarcity during UFR Load Resource deployment
Reduction in prices due to Output Schedule adjustments during Non-Spin deployment from Resources on Output Schedule
Dependence on MP submitted EOC to set scarcity pricing during Non-Spin and RRS deployment

14. Appendix

15. SCED Objective
Min { Cost of generation dispatch + Sum ( Max Shadow Price * Slack variable)}
Generation dispatch cost +
Power Balance Penalty Curve value
Slack Variable
Slack Variable +
Slack Variable
Max Shadow Price

16. SCED constraints Power Balance Constraints:
Transmission Network Constraints:
Resource Constraints:
Ramp Rate Constraints (HDL, LDL):

17. Offer Mitigation for SCED2
(1)Cap the Energy Offer Curves at the greater of the Reference LMP at the Resource Node or the Mitigated Offer Cap curve
(2) Bound it at the lesser of the Reference LMP at the Resource Node or the Mitigated Offer Floor.

18. Proxy Offer Curve for Output Schedule

19. Resource moved down for congestion
LMP during Congestion
Resource moved down for congestion

20. Resource moved up for congestion
LMP during Congestion
Resource moved up for congestion

21. Transmission Constraints Penalty Current Values
Maximum Shadow Price for Transmission Constraints
Base Case:  $5,000/MW
Generic constraints :  $5,000/MW
Post Contingency
345 kV:  $4,500/MW
138 kV:  $3,500/MW
69 kV:  $2,800/MW