july 11, 2012 | nepool markets committee
DESCRIPTION
July 11, 2012 | NEPOOL markets committee. Jonathan Lowell. Principal analyst | market development. Improving the ISO’s Ability to Operate Reliably, Produce Efficient Outcomes, and Reduce Avoidable Curtailments of Wind Resources. Wind Real-Time Dispatch. The Problem. - PowerPoint PPT PresentationTRANSCRIPT
JULY 11, 2012 | NEPOOL MARKETS COMMITTEE
Jonathan LowellPRINCIPAL ANALYST | MARKET DEVELOPMENT
Improving the ISO’s Ability to Operate Reliably, Produce Efficient Outcomes, and Reduce Avoidable Curtailments of Wind Resources
Wind Real-Time Dispatch
The Problem
• The system faces more frequent localized congestion as wind penetration increases
• Today, this congestion must be handled manually through curtailment instructions– To ensure reliability, system operators must take a conservative approach.
Can’t risk operating “too close to the edge”.
• Manual curtailments do not result in price separation– Wind resources and other Intermittent resources are “non-dispatchable”– Unit Dispatch Software (UDS) is unable to manage congestion by sending
dispatch instructions– Creates local economic incentives to maximize output when reliability
requires reduced output – LMPs are inconsistent with “dispatch” decisions to curtail zero-price resources
2
Wind RT Dispatch – Where Are We?
• Past MC presentations (see appendix) have described the shortcomings of existing practice, and the ISO’s proposal to provide a “Do Not Exceed” dispatch instruction to dispatchable wind resources.
• This background information has not changed, and has been discussed several times with the Committee– Not the focus for today, but happy to respond to questions
• Today’s presentation will focus on the principles behind the DNE dispatch and how it will impact LMPs
3
DNE Dispatch
• Dispatchable wind resources will receive a DNE dispatch instruction that reflects:– current and forecast wind conditions– wind plant economic offers and operating status– transmission operating limits and system conditions– offers and operating status of non-wind plants
• Goals of the Wind DNE Dispatch1) Ensure reliable operation2) Improve utilization of transmission facilities and minimize
curtailments3) Create prices and incentives consistent with efficient market
outcomes (lowest production cost)4) Enhance operators ability to manage the system during rapidly
changing weather conditions
4
DNE Dispatch Principles
• A wind resource may operate freely between 0 MW and the DNE limit, as wind conditions allow
• Must not exceed the DNE limit
• ISO will use telemetry from the plant and the new wind short term forecast system to produce a high confidence “expected wind generation” for the next dispatch interval
• If a plant’s expected generation > DNE limit:– The plant is being prevented from producing its full potential output– Under these conditions, the plant would be eligible to set price
• If expected generation <= DNE limit, the plant is not constrained by the dispatch, and would not be eligible to set price
5
DNE Dispatch – Conceptual Examples
Assume a 150 MW radial line with:– 100 MW wind plant offered at $0/MWH– 100 MW non-wind resource offered at $20/MWH– $35/MWH LMP where the line connects to the meshed grid
6
• With no wind:– Exp wind = 0 MW, DNE = 50 MW– Non-wind DDP = 100 MW– LMP = $35
• With 50% wind– Exp wind = 50 MW, DNE = 50 MW– Non-wind DDP = 100 MW– LMP = $35/MWH
• With 75% wind– Exp wind = 75 MW, DNE = 75 MW– Non-wind DDP = 75 MW– LMP = $20/MWH
• With optimal wind:– Exp wind = 100 MW, DNE = 100 MW– Non-wind DDP = 50 MW– LMP = $20/MWH
Note – to provide clarity in the illustration of DNE dispatch principles, examples ignore some of the more complex pricing constraints in the LMP calculator
DNE Dispatch – Conceptual Examples
Assume a 100 MW radial line with:– 100 MW wind plant offered at $0/MWH– 100 MW non-wind resource offered at $20/MWH– $35/MWH LMP where the line connects to the meshed grid
7
• With no wind:– Exp wind = 0 MW, DNE = 0 MW– Non-wind DDP = 100 MW– LMP = $35
• With 50% wind– Exp wind = 50 MW, DNE = 50 MW– Non-wind DDP = 50 MW– LMP = $20/MWH
• With 75% wind– Exp wind = 75 MW, DNE = 75 MW– Non-wind DDP = 25 MW– LMP = $20/MWH
• With optimal wind:– Exp wind = 100 MW, DNE = 100 MW– Non-wind DDP = 0 MW– LMP = $20/MWH
Note – to provide clarity in the illustration of DNE dispatch principles, examples ignore some of the more complex pricing constraints in the LMP calculator
DNE Dispatch – Conceptual Examples
Assume a 100 MW radial line with:– Two 60 MW wind plants offered at $0/MWH– 100 MW non-wind resource offered at $20/MWH– $35/MWH LMP where the line connects to the meshed grid
8
• With no wind:– Exp wind = 0 MW, DNE = 0 MW– Non-wind DDP = 100 MW– LMP = $35
• With 50% wind– Exp wind = 60 MW, DNE = 60 MW– Non-wind DDP = 40 MW– LMP = $20/MWH
• With 85% wind– Exp wind = 102 MW, DNE = 100 MW– Non-wind DDP = 0 MW– LMP = $0/MWH
• With optimal wind:– Exp wind = 120 MW, DNE = 100 MW– Non-wind DDP = 0 MW– LMP = $0/MWH
Note – to provide clarity in the illustration of DNE dispatch principles, examples ignore some of the more complex pricing constraints in the LMP calculator
DNE Dispatch – Operational Considerations
• Transmission lines in remote locations where many wind plants are locating tend to be “skinny”, and line limits cannot be exceeded, even for short periods– Normal rating = Short Term Emergency Rating = Long Term Emergency
Rating
• Another Example (using assumptions from prior slide, with several additional assumptons):– Expected wind = actual wind = DNE limit = 0 MW– Non-wind resources are operating at the limit of the line = 100 MW– Non-wind plant ramps at 1 MW/min– Wind plants each ramp at 20 MW/min, or 40 MW/min total
9
DNE Dispatch – Operational Considerations
• Along comes a proverbial “optimal wind” gust– Expected wind now = 120 MW– DNE cannot be increased until the non-wind plant has ramped down
to “make room” on the line– Alternatively, the line can be derated to allow some room to begin
wind up-ramps– The ISO is evaluating how best to incorporate these considerations in
the DNE algorithm to ensure reliable operation at the lowest cost.
10
Anticipated Schedule
• May MC meeting – conceptual overview– MR1 language available, but not discussed
• June MC meeting – MR1 language presented
• July MC meeting – request MC vote
• August PC meeting (or later) - request PC approval
11
APPENDIXWind RT Dispatch Presentation to the June 12, 2012 Markets Committee Meeting
The Problem
• The system faces more frequent localized congestion as wind penetration increases
• Today, this congestion must be handled manually through curtailment instructions– To ensure reliability, system operators must take a conservative approach.
Can’t risk operating “too close to the edge”.
• Manual curtailments do not result in price separation– Wind resources and other Intermittent resources are “non-dispatchable”– Unit Dispatch Software (UDS) is unable to manage congestion by sending
dispatch instructions– Creates local economic incentives to maximize output when reliability
requires reduced output – LMPs are inconsistent with “dispatch” decisions to curtail zero-price resources
13
Other Factors
• When economic dispatch is insufficient to manage congestion, priority goes to resources that cleared or self-scheduled in Day-Ahead.
• As a practical matter, this leads to economically inefficient outcomes– Renewable energy credits and production tax credits result in wind plants
having a negative energy price– Interconnections on weaker portions of the grid, and fast ramp rates mean
wind plants are typically curtailed more frequently than other resource types
• Anticipated wind production generally not reflected in unit commitment for real-time
• The ISO currently has no feasible way to dispatch wind plants that wish to offer economically
14
Why Now?
• New England wind penetration has been doubling every year
• Currently at 525 MW
• Likely 900 MW by end of 2012
• If Congress renews provisions for Production Tax Credits, wind resources could reach 1500-1700 MW by end of 2013– Existing manual curtailment procedures cannot effectively manage
this amount of wind generation
• Software infrastructure to support Wind RT Dispatch can be ready in 2014– Sooner would be better, but Wind Dispatch depends on other
dispatch software improvements already underway
15
What’s Wrong with the Status Quo?
• Lack of real-time telemetry and uncertainty about anticipated wind output lead to:– More conservative operating practices and limits– Less optimal resource commitment
• Suboptimal dispatch and inappropriate pricing – Low cost resources may be curtailed before higher cost resources– Manual curtailments to manage congestion don’t result in price
separation
• With higher wind penetration, system operators with only manual dispatch & curtailment procedures will be overloaded during dynamic weather conditions
16
Enabling Improvements Are Already Underway
• Wind short-term forecast – early 2013– Highly accurate 5-minute forecast for each wind plant– Hourly forecasts for the coming 7 days
• OP-14 & OP-18 – real-time telemetry from wind plants
• Both of these:– Greatly improve operator situational awareness– Reduce uncertainty– Improve commitment and dispatch of all resources– Make possible a real-time “Do Not Exceed” (DNE) dispatch of wind
resources
17
What is a “Do Not Exceed” Dispatch?
• UDS will calculate and send out a Do Not Exceed limit to each wind plant on dispatch
• The DNE limits will reflect – Each plant’s economic offer curve– The maximum output of each wind plant under ideal weather
conditions– Transmission constraints– Each plant’s telemetered physical status for the next dispatch interval– Current plant output (the so-called “persistence forecast”)– high-confidence “next 5 minutes” wind output forecasts
• A wind plant is free to operating anywhere between 0 MW and the DNE limit
• Considers both energy balance (i.e. gen = load) and reliability
18
How Will Wind RT DNE Dispatch Work?
• The DNE limit reflects the maximum plant output that can be tolerated, given system conditions and constraints
• Wind plants will be considered “following dispatch” if operating between 0 MW and the DNE limit and not exceeding ramping limits.– Output can vary with changing weather conditions– Downward ramps due to plant emergencies and/or decreasing wind not
counted for “following dispatch”
• Wind plants on dispatch will be eligible to set price
• DNE dispatch allows UDS to perform price-based congestion management based on offer parameters– Will prevent “manual procedure” overload for system operators
• Accurate forecasts and frequent telemetry should reduce curtailments and provide greater opportunity to maximize output.
19
DNE Dispatch Will Initially Be Optional
• DNE dispatch implementation currently estimated for 2014– Wind resources will be non-dispatchable until DNE dispatch is available– Once available, DNE dispatch may be optionally selected by wind plants
through their offer data
• If/when negative energy offers become available, MR1 would be revised to make DNE dispatch mandatory for wind plants that meet one or more of the following conditions:– Interconnect to a transmission facility or a FERC jurisdictional distribution
facility– Has a Capacity Supply Obligation– Is a Capacity Network Resource– Has a total nameplate capacity at the point of interconnection of >= 5 MW– Possible exclusion for “Settlement Only Generators” – may depend on
operational needs of System Operators
20
Other Participation Considerations
• Must be providing all weather and plant data required by recent OP-14 & OP-18 changes– This data supports the forthcoming real-time wind forecast system– Accurate real-time wind production forecasts are critical to effective operation
of the DNE dispatch
• No requirement to offer into Day-Ahead
• Self-scheduling will continue to be permissible while Wind RT Dispatch is voluntary.
• Assuming a dispatchable wind plant offers $0 commitment costs, it will be treated as “committed” whenever available (i.e. RTHOL > 0)– Otherwise, must offer & clear in DA, or self-schedule in RT
21
Concluding Remarks
• Voluntary Wind RT DNE Dispatch – mid-2014– Market rules being presented today only address voluntary DNE dispatch
• Partial/voluntary implementation:– Provides early operational/reliability benefits– Does not fully resolve pricing and congestion management issues– That requires that all wind plants are responding to DNE dispatch
instructions
• Full reliability benefit occurs only when Wind RT Dispatch becomes mandatory– Not anticipated until negative offers can be implemented (likely not
until 2014 or 2015)– Mandatory Wind RT Dispatch will require a separate rule change
22
Anticipated Schedule
• May MC meeting – conceptual overview– MR1 language available, but not discussed
• June MC meeting – MR1 language presented
• July MC meeting – request MC vote
• August PC meeting (or later) - request PC approval
23
APPENDIXCurrent Curtailment Protocol
Existing RT Dispatch and Congestion Management
• Existing real-time curtailment procedure1. Economic dispatch – most-expensive dispatchable resources (based
on sensitivity to the constraint) backed down first• Self-scheduled/non-dispatchable resources not impacted at this point
2. Resources that did not offer and clear in Day-Ahead• Resource with largest impact on the constraint curtailed first, as long as
it can respond quickly enough• If not, other resources may also be requested to reduce output
3. DA-cleared/self-scheduled resources backed down last
• Self-scheduling in DA– If multiple SS requests result in constraint violations, ISO rejects the
request(s) that results in the least cost solution
25
Existing RT Dispatch and Congestion Management• Self-scheduling in RT
– A SS request (effectively priced at $0/MWH) is accepted if it can be accommodated by backing down DA-cleared resources to their EcoMin/SS amount
– If congestion develops and all online resources are RT SS at EcoMin, operators will manually deny self-schedules as needed• Solves the reliability problem, but does not result in price separation
• If further action is required, operators may de-commit resources, taking into consideration:– Sensitivity to constraint, system/area capacity, EcoMax/EcoMin, Min Run &
Min Down times, economics
• Interconnections on weaker portions of the grid, and fast ramp rates mean wind plants are typically curtailed more frequently than other resource types.
26