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ISO PUBLIC – © 2016 CAISO
Energy Imbalance Market Overview
Presentation to:
Portland General Electric
EIM OATT Stakeholder Meeting
David Timson
Account Manager
CAISO Strategic Alliances
October 14, 2016
ISO PUBLIC – © 2016 CAISO
Topics for Discussion
ISO overview
Why have an EIM
Definitions
Basic operation and timing
Balance and feasibility tests
Market settlements
Transmission service
Changes with EIM
Governance
Slide 2
ISO PUBLIC – © 2016 CAISO
• Operate transmission Balancing Authority Area
• Matches generation with load and maintains electric frequency of the grid
• Runs day-ahead and real-time markets for energy and ancillary services
• Manages energy imbalance market across participating areas
• Maintain reliability
The ISO is a not for profit public benefit corporation.
Our responsibilities:
• Plan for system expansion
• Interconnect resources
• Implement state’s energy policies
Slide 3
ISO PUBLIC – © 2016 CAISO
California ISO by the numbers
• 68,200 MW of power plant capacity (net dependable capacity)
• 50,270 MW record peak demand (July 24, 2006)
• 27,500 market transactions per day
• 26,000 circuit-miles of transmission lines
• 30 million people served
• 240 million megawatt-hours of electricity delivered annually
Slide 4
ISO PUBLIC – © 2016 CAISO
Resource mix
May 2016
Slide 5
ISO PUBLIC – © 2016 CAISO
Western Electricity Coordinating Council (WECC)
CA is one of 14 states within
WECC
The ISO is one of 38 Balancing
Area Authorities within WECC
Resource sharing enhances
reliability, helps achieve
renewable targets and
manages cost
25% of all the electricity that keeps
the lights on during the summer
comes from other areas in the west
including parts of Canada and
Mexico
Slide 6
ISO PUBLIC – © 2016 CAISO
Changing resource mix over the next 10 years
presents new operational challenges
• Over 20,000 MW of wind and solar capacity is expected to be
interconnected by 2020 – Increased supply volatility
• Potential changes to load patterns as a result of distributed
generation and electric vehicles – Changing, less
predictable load patterns
• Approximately 18,000 MW of thermal generation will be
repowered or retired by 2020 – Uncertainty surrounding
thermal resources
o Phase out 12,000 MW of coastal plants with once-through
cooling
o Greenhouse gas reductions limit replacement generation
o Water flow management affects hydro availability
Slide 7
ISO PUBLIC – © 2016 CAISO
Power industry transformation
Goals:
Higher expectation
of reliability
Higher expectation
of security
Smart Grid
Situational
awareness through
Visualization
Main Drivers:
California RPS
GHG reduction
Once-through-cooled
plants retirement
Wind
• Unpredictable Output
• 4769 MW Peak – April 12, 2014
Solar Thermal / Photo Voltaic
•Semi – Predictable Output
•8136 MW Peak – July 26, 2016
Roof Top Solar
• Semi – Predictable Output
• Behind the meter – Residential
• 3500 MW Estimated Capacity
Slide 8
ISO PUBLIC – © 2016 CAISO
Hydro vs. solar monthly production --- 2012 through
October 2015
Slide 9
0
500
1,000
1,500
2,000
2,500
3,000
3,500
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O
2012 2013 2014 2015
GW
h
Hydro vs. Solar Monthly Production
Hydro Production Solar Production
ISO PUBLIC – © 2016 CAISO
Energy Imbalance Market is an easily-scalable
extension of real-time market to broader region
• Builds on existing market: automated
dispatch facilitates renewable integration,
resolves imbalances & avoids congestion
• Situational awareness enhances reliability
• FERC staff paper assessed EIM
reliability benefits: http://www.caiso.com/Documents/QualitativeAssessment-
PotentialReliabilityBenefits-WesternEnergyImbalanceMarket.pdf
• No critical mass required. No exit fees
• Easily scalable, low-cost, low risk,
voluntary option for new participants
• Preserves BAA autonomy, including
compliance, balancing, and reserve
obligations
• Benefits increase with more transfer
volume between BAAs
Slide 10
ISO PUBLIC – © 2016 CAISO
Benefits from the Energy Imbalance Market are
consistent with earlier analysis and growing
Entity Q4
2014
Q1
2015
Q2
2015
Q3
2015
Q4
2015
Q1
2016
Q2
2016
Savings
(Million $)
ISO 1.24 1.45 2.46 3.48 5.28 6.35 7.89 28.15
PacifiCorp 4.73 3.81 7.72 8.52 6.17 10.85 10.51 52.31
NV Energy 0.84 1.70 5.20 7.74
Total 5.97 5.26 10.18 12.00 12.29 18.90 23.60 88.20
• Reduced renewable energy economic curtailment displaced
greenhouse gas emitting resources:
• In Q1, reduced 48,342 metric tons of CO2
• In Q2, reduced 67,930 metric tons of CO2
• Reduced flexible ramping requirements across footprint –
35-36% savings during 2016
Slide 11
ISO PUBLIC – © 2016 CAISO
Transfers among areas
Slide 12
ISO PUBLIC – © 2016 CAISO
Wind/Solar avoided curtailment has significantly increased
due to EIM.
Slide 13
ISO began tracking
avoided curtailment
since Apr 2015.
Avoided curtailment
began to increase
significantly after NV
Energy joined the
EIM in Nov 2015.
ISO PUBLIC – © 2016 CAISO
EIM Interties
Slide 14
ISO PUBLIC – © 2016 CAISO
Several key roles are involved in enabling EIM participation
EIM Entity is a balancing authority that enables EIM to occur in its area.
By enabling EIM and coordinating with its area’s loads, resources and
transmission service providers, all load and generation imbalances within
its area will settle through the EIM.
EIM Entity Scheduling Coordinator coordinates and facilitates EIM for one
or more EIM Entities, and is responsible for resource plans and financial
settlements on behalf of non-participating resources and loads.
Base Schedule Coordinator submits base schedules and resource plans.
EIM Transmission Service Provider controls transmission in the EIM Entity
BAA, and voluntarily informs EIM Entity that it is making its transmission
available for EIM.
EIM Participating Resource is a resource within the EIM Entity
represented by a Scheduling Coordinator that voluntarily offers economic
bids for availability in EIM’s real-time market, subject to EIM Entity’s
eligibility requirements.
EIM Participating Resource Scheduling Coordinator is certified to bid in
ISO markets, submits bid, reports outages, and receives settlements and
invoices.
ESC
PRSC
Slide 15
ISO PUBLIC – © 2016 CAISO
EIM entities and participating resources determine key
aspects of participation
Slide 16
• EIM Entity determines:
• Eligibility of resource types
(generators, participating loads &
demand response, non-generator
resources, etc.)
• Types of eligible dynamic transfers
(dynamic schedules, pseudo-ties)
• Requirements of transmission service
within its BAA
• Definition of Load Aggregation Points
• Settlement of EIM charges or credits
to entities within its BAA
• EIM Participating
Resource determines:
• Voluntary registration to
participate in EIM
• Hour-to-hour quantity and
price of economic bids
ISO PUBLIC – © 2016 CAISO
A resource is
dispatched at its
location, and is paid
the nodal price
Load pays the weighted
average price of all load
nodes in the Load
Aggregation Point (LAP)
Basics of EIM Operation & Settlement
Base schedule: Forward energy
schedule, including hourly load
forecasts, generation schedules,
and interchange schedules, form
the baseline for EIM financial
settlements.
Resource plan: How to balance
supply and demand and ensure
resource sufficiency:
• Load, generation, and
interchange base schedules
• Energy bids from participating
resources
• Ancillary service plans
Other inputs: Outages, telemetry,
transmission capacity
Slide 17
ISO PUBLIC – © 2016 CAISO
Energy Imbalance Market Overview
Slide18
Compile
Hourly
Resource
Plan
Demand Forecast
Variable Energy Forecast
Transmission Outages
Generation Outages
Transmission Limits
Non-participating
resource hourly
base schedule
Hourly interchange
schedules
Participating resource
hourly base schedule
Participating
resource
energy bid range
ISO PUBLIC – © 2016 CAISO
Energy Imbalance Market Overview
Slide 19
EIM
15-Minute
Market
Demand Forecast
Variable Energy Forecast
Transmission Outages
Generation Outages
Transmission Limits
Economic Bids
15-Minute
Schedule
Unit
commitment
for short-
start
resources
ISO PUBLIC – © 2016 CAISO
Energy Imbalance Market Overview
Slide 20
EIM
5-Minute
Dispatch
Demand Forecast
Variable Energy Forecast
Transmission Outages
Generation Outages
Transmission Limits
Economic Bids
Dispatch
Instructions
State Estimator
ISO PUBLIC – © 2016 CAISO
Energy Imbalance Market Overview
Slide 21
EIM
Settlement
Hourly Base Schedule
15-Minute Schedule
5-Minute Dispatch
Meter
EIMPR SC
Settlement
Statement
EIM Entity SC
Settlement
Statement for
EIMNPR and
load
EIM Entity SC
Settlement
Statement for
EIM BAA
Neutrality
ISO PUBLIC – © 2016 CAISO
After advisory feedback period, interactive resource
sufficiency evaluation prevents “leaning” among BAAs
15-minute dispatch intervals
(4.5 hour look-ahead)
T-75: Base schedules and energy bids due
T-55: Updated base schedules submitted
T-20: E-tagging deadline
(Entity SC)
T
(T = start of the hour) T-60: Results of sufficiency test published (Balanced?
Feasible transmission? Sufficient flexible ramping?)
T-45: Results of sufficiency test
published
T-40: Final opportunity to submit base
schedules (Entity SC)
T-37.5: Start of Market 1 optimization
X:00 X:30 Y:00 X:15 X:45
T-22.5: 15-minute scheduled awards published
Market
Operator
EIM Market
Participants
5-minute dispatch intervals
(65-minute look-ahead)
Resource
sufficiency
tests:
Balanced
load and
generation?
Free of
congestion?
Sufficient
ramping
capability?
Slide 22
ISO PUBLIC – © 2016 CAISO
EIM Tests
Balancing
Capacity
Flexible ramp sufficiency
Feasibility
Slide 23
ISO PUBLIC – © 2016 CAISO
When loads deviate from their base schedules,
resources must be re-dispatched to maintain
balance.
Meter = 17 MW
Uninstructed
Imbalance
Energy = 2 MW.
Charge for
under-scheduling
2 MW energy
Base S
chedule
= 1
5 M
W
Base S
chedule
= 1
5 M
W
Meter = 12 MW
Uninstructed Imbalance
Energy = 3 MW.
Payment for over-
scheduling 3 MW
energy
For loads, uninstructed imbalance energy is the
difference between the base schedule and the meter.
Slide 24
ISO PUBLIC – © 2016 CAISO
The ISO settles with scheduling coordinators, who allocate
payments and charges to the appropriate customers.
Market Operator settles
deviations of EIM
Participating Resources
from base schedules at
LMP of resource locations.
For resources that do not
participate in EIM, Market
Operator settles with EIM
Entity Scheduling
Coordinator who is
responsible for settlement of
Non-PR deviations from their
base schedules.
Slide 25
ISO PUBLIC – © 2016 CAISO
Real-time energy charge codes reflect cost causation. Primary settlement: instructed and uninstructed imbalance
energy.
Illustrative set of common charge codes (See
http://www.caiso.com/Documents/ISOMarketChargeCodesMatrix.xls)
Instructed Imbalance Energy (IIE)
Uninstructed Imbalance Energy (UIE)
Other settlements Bid Cost Recovery (ensures resources recover daily RT
costs, recovered within BAA with EIM Transfer considered)
Unaccounted for Energy (UFE)
Congestion Offset (neutrality accounts by BAA)
Marginal Losses Offset (neutrality accounts by BAA)
Imbalance Energy Offset (can shift costs or payments
between BAAs based on EIM Transfers)
Greenhouse Gas Emission Cost Revenue
EIM Administrative Charge
Slide 26
ISO PUBLIC – © 2016 CAISO
Settlement statement timeline provides prompt
clearing, with later changes limited to
unresolved disputes or FERC decisions
• Initial settlement statement – T+3B (uses estimated settlement
meter data)
• Recalculation settlement statement – T+12B, T+55B
– Disputes due T+26B, T+77B
• Recalculation settlement statement – T+9M through T+36M
(optional)
– Disputes limited to incremental charges only
Slide 27
ISO PUBLIC – © 2016 CAISO
Transmission service uses simple principles
• EIM Entities make transmission capacity available through dynamic
e-Tag:
• Network service within EIM Entities allows redispatch up to network
capacity
• EIM coordinates transmission usage with EIM participants’ Transmission
Service Providers (e.g., Bonneville Power Administration)
• EIM transfers respect both scheduling rights and actual flow constraints
• ISO constantly updates EIM Entities’ NSI to reflect EIM transfers
• Reciprocity: To consider bids equally on economic merit, there is no
incremental charge for transmission use associated with EIM
transfers between EIM Entities
• EIM maintains existing transmission rate structures within EIM Entities
Slide 28
ISO PUBLIC – © 2016 CAISO
What changes for reliability entities?
If you are:
Balancing Authority • Current NERC and WECC responsibilities
will not change
• May commit resources as they do today
• Manage interchange tagging
• Will be the EIM Entity
• Will submit balanced schedules to the
Market Operator (ISO)
• Will communicate outage and operating
limits information with Market Operator
Transmission Owner,
Transmission Operator,
Transmission Service
Provider (TSP)
• TSP determines available transmission
capability (ATC) and prior commitments,
to inform Market Operator of capacity
available for EIM Transfers
• No other change in role or responsibilities
Slide 29
ISO PUBLIC – © 2016 CAISO
What changes for market participants?
If you are:
Utility affiliated with EIM
Entity
• Submits load and resource information to
Market Operator as well as EIM Entity BA
Other Utility in EIM Entity
BAA
• Submits load and resource information to
Market Operator as well as EIM Entity BA
Resource (e.g., merchant
generator) in EIM Entity
BAA
• If electing to participate in EIM as an EIM
Participating Resource
• Communicate availability through SC
• Provide outage information to Market
Operator as well as EIM Entity BA
• Respond to dispatch instructions
Scheduling Coordinator • Submits bids and schedules for EIM
participants
• Receives settlement statements and invoices
from ISO
Slide 30
ISO PUBLIC – © 2016 CAISO
EIM Governing Body
• Five-member body that exercises delegated authority over the rules
of the western Energy Imbalance Market
• The five members must be independent of entities that participate in
the ISO market, including the EIM
• Members are selected by representatives of all EIM stakeholders
EIM Governing Body - seated June 28, 2016
Valerie Fong, (Retired) Director of Utilities, City of Palo Alto
Doug Howe, Consultant, Vanry & Associates
Carl Linvill, Principal, The Regulatory Assistance Project
John Prescott, (Retired) President and Chief Executive Officer,
Pacific Northwest Generating Cooperative
Kristine Schmidt, President, Swan Consulting Services
Slide 31
ISO PUBLIC – © 2016 CAISO
EIM body of state regulators and regional issues forum
Body of State Regulators
• Primary function is to learn about the EIM, EIM Governing Body and
related ISO developments that may be relevant to their jurisdictional
responsibilities
• Provides forum for education and discussion, offer opinions to EIM
Governing Body and ISO Board on matters of interest, represents 8
states
• Not restricted from taking any position before FERC, ISO BOG, or
any other forum concerning matters related to the EIM or ISO.
http://westernenergyboard.org/eim-bosr/what-we-do/
Regional Issues Forum
• Public vehicle for discussion of EIM-related issues, including
impacts to neighboring balancing authority areas
http://www.caiso.com/Documents/EIMRegionalIssuesForumMembers.pdf
Slide 32
ISO PUBLIC – © 2016 CAISO
Recap: EIM extends ISO‘s real-time market and
systems to EIM participants
• Optimized 15 and 5-minute interval dispatch accounts for
operating characteristics and constraints of participating
resources as well as the underlying transmission system
• Multi-interval look-ahead anticipates changes in system
conditions and ensure flexibility of dispatch to efficiently
manage system balance and congestion
• Short-term unit commitment allows efficient economic
dispatch, recognizing state-of-art renewable energy
forecasts, hydro limits, complexity of resources like
combined-cycle, and other factors
• The result is efficient use of transmission offered by EIM
participants & cost reduction to consumers
Slide 33
ISO PUBLIC – © 2016 CAISO
Resources available for EIM
• CBT - Introduction to the Energy Imbalance Market This Computer Based Training provides a high level overview of the Energy
Imbalance Market
http://content.caiso.com/training/Introduction%20to%20EIM/My%20Articulate%20Projects/Introduction%
20to%20the%20Energy%20Imbalance%20Market/player.html
• CBT - How the Energy Imbalance Market Works – This Computer Based Training describes the roles and responsibilities of the key
players in EIM and the business processes that will take place.
http://content.caiso.com/training/HowEIMWorks/player.html
• EIM Stakeholder processes and tariff filings http://www.caiso.com/informed/Pages/StakeholderProcesses/EnergyImbalanceMarket.aspx
• EIM Business Process Manual http://bpmcm.caiso.com/Pages/BPMDetails.aspx?BPM=Energy Imbalance Market
Slide 34
ISO PUBLIC – © 2016 CAISO
For additional information please contact: David Timson CAISO [email protected]
Slide 35