CVP Cost Allocation Public Workshop – January 18, 2013

“PLEXOS Methodology and Assumptions”

Methodology Summary

•Estimate value of CVP power by comparing the

differential costs for two scenarios:

• With fully-functional CVP

• Without CVP, but with replacement portfolio

• Study is performed with CVP constraints modeled

•PLEXOS is used to determine the difference in variable

costs between the two scenarios

• Capital and fixed operating costs are from another source

PLEXOS Overview• Fundamental market simulation model (supply

and demand)• Minimizes total market cost for all variables:

• Energy and ancillary services (AS)• Fuel and variable operating expenses• Emission costs (if modeled)• Wheeling costs and losses

• Subject to 1000s of constraints:• System load and AS• Plant performance• Transmission capability• Uncertainty of variable-energy resources

Solving UC/ED using MIP

• Unit Commitment and Economical Dispatch can be formulated as a linear problem (after linearization) with integer variables of generator on-line status

Minimize Cost = generator fuel and VOM cost + generator start cost+ contract purchase cost – contract sale saving + transmission wheeling + energy / AS / fuel / capacity market purchase cost – energy / AS / fuel / capacity market sale revenue

Subject to– Energy balance constraints– Operation reserve constraints– Generator and contract chronological constraints: ramp, min up/down, min capacity,

etc.– Generator and contract energy limits: hourly / daily / weekly / …– Transmission limits– Fuel limits: pipeline, daily / weekly/ … – Emission limits: daily / weekly / … – Others

Integration of Mid- and Short-Term Constraints

• PLEXOS includes three integrated algorithms:

– Long-, mid-, and short-term

– Three perspectives are seamlessly integrated

– Mid-term simulation decomposes hydro, fuel, emission, and energy constraints for the short-term simulation

– CALSIM monthly output decomposed into daily amounts for short-term

Long-term security assessment

Maintenance planning and outage assessment

Mid-term simulationResolve and price emission /fuel/

energy constraints

Short–term simulationFull chronological simulation

Detailed Generator Modeling

• General chronological constraints modeled, i.e.,– Minimum up and down time– Ramp up and down rate– Minimum capacity with hourly economic or must-run status– Reserve (regulation up/down, spinning and non-spinning) provision

capacities– Start cost as a function of number of hours being down– Forbidden operation zone

• User-specified fuel mixture / mixture ranges or model-determined fuel mixture

• Heat Rate as a function of fuel types– Average heat rate for multiple loading points– Incremental heat rate for multiple loading points– Polynomial fuel-generation IO curve

• Emission rate with removal rate• Initial commitment and dispatch status

Combined Cycle Modeling, continued

HR=10316 Btu/kWhEfficiency=33%

Boiler efficiency = 80%

~

Gen=160 MWh

Gen=160 MWh

Fuel=1.68e+9 Btu

Fuel=1.68e+9 Btu

Duct Burner Fuel=1.45e+8 Btu

HR=10500 Btu/kWhEfficiency=32.5%

HR=10500 Btu/kWhEfficiency=32.5%

Energy content of electricity = 3412 Btu/kWh

Waste=1.134e+9 Btu

Waste=1.134e+9 Btu

1.96004e+9 Btu

~~

PLEXOS Hydro Modeling

• Inflows, storages, plants, and spills are modeled and optimized on an hourly basis– In terms of either acre-feet (volume) or MWh

• The hydro contribution is maximized given energy and AS markets (or system requirements)

• Hydro is fully integrated with the thermal (hydro-thermal integration) and is perfectly arbitraged against all available markets

An Example of Cascaded Hydro System

Inflow

Storage II

~P/S 2

Storage III

Storage V

Storage I

Sea

Inflow

Inflow

Inflow

~P/S 1 ~P/S 3

~H 2~H 1 ~H 3

~H 6

~H 4 ~H 5

Storage VI

LT-Plan: PLEXOS for Integrated Resource Planning

• Alternative portfolio development methodology

• Objective: Minimize net present value of forward-looking costs (i.e. capital, fixed operating and production costs)

Production Cost P(x)

Capital Cost C(x)

Total Cost C(x) + P(x)

Cost ($)

Investment xOptimal Investment x*

Hydro Value

• Energy

• Ancillary services

• Fast ramp (up and down)

• No greenhouse gas

Primary Data Sources

• WECC TEPPC (Transmission Expansion Planning Policy Committee) regional database (version PCO)

• CA Utility LTPP (Long-Term Power Plan) revisions and updates for CA

• CVP-specific information

Selected Examples of Data Input to PLEXOS• Simulation year – 2020

• Base year for dollars – 2010

• CA hydro aggregated in two zones– Northern and Southern California– CVP extracted from aggregated hydro

Data Inputs II

• CAISO 2011-2020 Changes (MW)– Summer Peak Load

• Summer peak load = 6,200 MW

• Demand-side reductions = 8,100 MW

• Net peak summer load = (1,900 MW)

– Summer Generation Capacity

• Retirements = 13,100 MW

• New additions = 11,100 MW (Thermal, RPS)

• Net summer capacity = 2,000 MW– primarily RPS and OTC replacement

Data Inputs III

• CAISO 2011-2020 Changes (MW)– Renewable Portfolios

• In-state = 14,200 MW

• Out-of-state = 5,093

• In-state renewable types– Hydro = 0 MW– PV Solar = 4,600 MW– Solar Thermal = 3,600 MW

– Wind = 5,034 MW

• Out-of-state renewable

• Wind = 5,000 MW

Data Inputs IV

• Natural gas prices (2010 $)– PG&E Citygate -- $5.61 / MMBtu (delivery to burner-tip adds 7 to 23

cents / MMBtu)

– SoCal Border -- $5.41 / MMBtu (delivery adds 44 cents / MMBTU)

– Current Price (1/4/2013) -- $3.30 to $3.60 / MMBtu (source: California Energy Markets)

• CO2 Emission Price (2010 $)– $36.30 (short-ton CO2)

• CA Net Exchange (summer peak)– 16,400 MW

Questions?

Selected Acronyms

• AS – Ancillary Services

• CAES – Compressed air energy storage

• CAISO – CA Independent System Operator

• CO2 – Carbon dioxide

• LTPP – Long-Term Procurement Plan

• OTC – Once-Through Cooling

• TEPPC – Transmission Expansion Planning Policy Committee (WECC regional database for market simulation purposes)

• WECC – Western Electric Coordinating Council

References

• LTTP data assumptions – http://www.caiso.com/Documents/2011-08-10_ErrataLTPPTestimony_R10-05-006.pdf