Upload
lenore-hicks
View
21
Download
1
Embed Size (px)
DESCRIPTION
August 2004. Energy Markets: Overview of the Day-Ahead Market (DAM). Michael Taniwha Manager, Market Administration. 2000 hrs. Complete Reserve Adequacy Assessment. 1600 hrs. Post DAM Schedules. 1800 hrs. Verify DAM Schedules. 2200 hrs. Complete REGO Analysis. - PowerPoint PPT Presentation
Citation preview
WEM101 – Introduction to ISO-NE’s Wholesale Energy MarketMarket Analysis & Training
1©ISO New England 2004
Energy Markets: Overview of the Day-Ahead Market (DAM)
Michael TaniwhaManager, Market Administration
August 2004
WEM101 – Introduction to ISO-NE’s Wholesale Energy MarketMarket Analysis & Training
2©ISO New England 2004
SMD Timeline for Day-Ahead Market (DAM)
1200 hrs.TradingDeadline
1600 hrs.PostDAM
Schedules
1600 hrs.Open
Re-BidPeriod
1800 hrs.CloseRe-BidPeriod
1800 hrs.VerifyDAM
Schedules
2000 hrs.CompleteReserve
AdequacyAssessment
2200 hrs.Complete
REGOAnalysis
0001 hrs.RTM
OpensContinue
RAA
Day before the
Operating Day
Operating Day
Day-Ahead Market
Reserve Adequacy Assessment
Real-Time Market
WEM101 – Introduction to ISO-NE’s Wholesale Energy MarketMarket Analysis & Training
3©ISO New England 2004
Why a Day-Ahead Market (DAM)?
Provides a “forward or futures” market for Market Participants to hedge against Real-Time (RT) price volatility – Allows Participants to buy or sell energy forward one
day and hedge vulnerability to RT price fluctuations
– Allows wholesale demand (buyers) to participate in Day-Ahead Market price determination
In comparison to Real-Time Energy Market where demand is a price taker
Improves Real-Time reliability by providing financial incentive for resources cleared Day-Ahead to deliver physically in Real-Time– Incentive created from energy deviations and OR
charges
WEM101 – Introduction to ISO-NE’s Wholesale Energy MarketMarket Analysis & Training
4©ISO New England 2004
Fundamentals of the DAM
DAM clearing based on Market Participant submitted supply (offers) and demand (bids) – Market clearing is based on least cost means of
satisfying cleared demand using a security constrained economic dispatch
DAM produces financially binding schedules for supply and demand– Based on hourly Locational Marginal Pricing (LMP)
that include marginal cost of energy, congestion, and losses
WEM101 – Introduction to ISO-NE’s Wholesale Energy MarketMarket Analysis & Training
5©ISO New England 2004
Inputs to the DAM
Network information– Network model
Transmission elements and ratings– Approved transmission outages
Expected topology Abnormal limits
– Generation Requirements for Transmission (GRT) spreadsheet
Interface limits Generation requirements
– Transmission Related Abnormal Generation (TRAGO) sheet
Units committed for VARS
WEM101 – Introduction to ISO-NE’s Wholesale Energy MarketMarket Analysis & Training
6©ISO New England 2004
Inputs to the DAM (continued)
Reserve requirements– Ten Minute Reserve
100% of 1st Contingency– 50% is spinning
– Operating Reserve 50% of 2nd Contingency
– Replacement Reserve 50% of 2nd Contingency
WEM101 – Introduction to ISO-NE’s Wholesale Energy MarketMarket Analysis & Training
7©ISO New England 2004
Inputs to the DAM (continued)
Demand Bids– Actual demand
Fixed Price-sensitive
– Virtual demand Decrement bids (Decs)
WEM101 – Introduction to ISO-NE’s Wholesale Energy MarketMarket Analysis & Training
8©ISO New England 2004
Inputs to the DAM (continued)
Supply Offers– Actual resources
Generation– ICAP resources
Must-run Economic Unavailable
– ICAP - Limited Energy Resource (LEG)– Intermittent resources– Non-ICAP resources
– Virtual resources Increment offers (Incs)
WEM101 – Introduction to ISO-NE’s Wholesale Energy MarketMarket Analysis & Training
9©ISO New England 2004
Inputs to the DAM (continued)
External Transactions– DA externals only
Three types– Fixed– Dispatchable– Up-to-congestion
WEM101 – Introduction to ISO-NE’s Wholesale Energy MarketMarket Analysis & Training
10©ISO New England 2004
WebServer
Outage scheduler
Market Participants
Bids & OffersSchedules/PricesOutages
ISO-New England
MDb(Market Database)
Transmission Owners & Satellite Centers
UDS
eFTR
eMKT
DA/RAA - SPD
LMPC
MIS
DMT
Data Flows
WEM101 – Introduction to ISO-NE’s Wholesale Energy MarketMarket Analysis & Training
11©ISO New England 2004
Clearing of the DAM
Least Cost Security Constrained Economic Dispatch– New England Power Pool, Market Rule 1
Section 1.10.8, ISO Responsibilities– (a) The ISO shall use its best efforts to determine (i) the
least‑cost means of satisfying hourly purchase requests for energy, the projected hourly requirements for Operating Reserve, Replacement Reserve and other ancillary services of the Participants, including the reliability requirements of the NEPOOL Control Area, of the Day-Ahead Energy Market
WEM101 – Introduction to ISO-NE’s Wholesale Energy MarketMarket Analysis & Training
12©ISO New England 2004
Clearing of the DAM (continued)
Least Cost Security Constrained Economic Dispatch– NEPOOL Manual for Market Operations (Manual M-
11) Section 5.1, ISO Philosophy
– The ISO scheduling philosophy in the Day-Ahead Energy Market is to schedule and Dispatch generation, Increment Offers and External Transaction purchases on a least cost, security-constrained basis (minimize Start-Up Fees, No-Load Fees and incremental Energy costs) to meet the aggregate cleared Demand Bids, cleared Decrement Bids, cleared External Transactions sales and Operating Reserve and Replacement Reserve requirements, while maintaining the reliability of the NEPOOL Control Area.
WEM101 – Introduction to ISO-NE’s Wholesale Energy MarketMarket Analysis & Training
13©ISO New England 2004
Clearing the DAM (continued)
Supply Offers
Price
Quantity
Demand Bids
ClearedCleared
> 0$
0$0 MW > 0 MW
Not ClearedNot Cleared
PDA
QDA
WEM101 – Introduction to ISO-NE’s Wholesale Energy MarketMarket Analysis & Training
14©ISO New England 2004
Clearing of the DAM (continued)
Software applications– Resource Scheduling & Commitment (RSC)
Security constrained unit commitment
– Scheduling, Pricing and Dispatch (SPD) Security constrained economic dispatch using the
commitment profile produced by RSC SPD is linear program (LP) optimization that clears
schedule and calculates shadow prices (LMPs)
– Simultaneous Feasibility Test (SFT) Contingency analysis of SPD results Constraint sensitivities fed back to SPD for reiteration Uses STE contingency limits
WEM101 – Introduction to ISO-NE’s Wholesale Energy MarketMarket Analysis & Training
15©ISO New England 2004
Outputs of the DAM
Public– DAM LMP
– DAM hourly net tie schedules
– Binding constraints
– DAM summary Cleared demand Operating reserves
WEM101 – Introduction to ISO-NE’s Wholesale Energy MarketMarket Analysis & Training
16©ISO New England 2004
Outputs of the DAM (continued)
Private– Supply schedules
Generation Incs
– Demand schedules Load Decs
– External transaction schedules
WEM101 – Introduction to ISO-NE’s Wholesale Energy MarketMarket Analysis & Training
17©ISO New England 2004
Outputs of the DAM (continued)
DAM generation schedules are an initial input to the RAA.
WEM101 – Introduction to ISO-NE’s Wholesale Energy MarketMarket Analysis & Training
18©ISO New England 2004
Overview of DAM Settlement
Cleared demand (fixed or price sensitive) pays the price of its zone (the Zonal LMP)
Cleared supply (generation) is paid at the price of its node (the Nodal LMP)
Cleared virtual demand or supply pays or is paid at the location where bid (i.e., Hub, Zone, Node)
Financial Transmission Rights (FTR) holders are charged or credited based on the difference between the DAM congestion component between source and sink nodes
WEM101 – Introduction to ISO-NE’s Wholesale Energy MarketMarket Analysis & Training
19©ISO New England 2004
Questions?