Working Stores Market Overhaul Venture Redesign

Presentation Transcript

Working Reserves Market Redesign Project Update March 4, 2010 Market Services Stakeholder Session Kris Aksomitis

Agenda Goals of the Operating Reserves Market Redesign Current Operating Reserves Market Design Recommendation for Redesign Changes from January 2009 Recommendation ISO Rules for Operating Reserves

Goals for the Operating Reserves (OR) Market Redesign Reduce AESO impact in the market AESO is the main purchaser in the market AESO has caution especially in the Standby market Improve straightforwardness Most volume is on NGX yet some volume exchanges Over-the-Counter (OTC) Lack of clarity for what is a 'triumphant offer' in Standby Create better arrangement with the vitality advertise Different cost instruments, Standby enactment cost not adjusted to vitality showcase Simplify the market outline Relatively little market contrasted with vitality yet a great deal more mind boggling Create suitable ISO Rules for the OR showcase Very constrained principles exist today – leftover from Transmission Administrator structure preceding development of the AESO

Current Design Overview Market Timing Volumes Block Volumes Shape Volumes NGX Market Design Trades Active Block Products and Standby Products OTC Market

Current Design NGX markets work from 8am to 10am for D-1 items Active markets close consecutively Standby save acquired simultaneously with Active save OTC opens when NGX closes (10am by and large) OTC finish at around 11am NGX markets revive for D-5 to D-2 items 2pm to 3pm Market is open roughly 4 hours, 5 days for every week Spinning and Supplemental Volumes: About 7% of load Regulating: around 140 MW to 250 MW

Regulating Reserve Market Volumes Standby volumes: 120 MW

Spinning Reserve Market Volumes Standby volumes: 105 MW Spin 35 MW Supplemental

Active NGX Market – Current Design

Standby Market Design (current) Sellers AESO Bid $2 premium $100 Activation Pick Market $3 premium $80 Activation $5 premium $80 Activation $8 premium $200 Activation Issues: AESO must make an offer No straightforward approach to pick between merchant #1 and #2 Design interesting to little standby Market works some time recently, amid and after Active market

Proposed Redesign Elements Market Timing Active Market Design Standby Market Design Phased Implementation

Active NGX Market – Proposed Design All business sectors open – AESO posts volume prerequisites 9:00 am to 9:20 am Active Baseload Markets Close 9:40 to 10:20 Active Hourly Markets Close 10:30 to 10:50 Standby Markets Close 11:10 to 11:50 Standby Hourly Markets Close (If required) No Afternoon or OTC session

Active NGX Market – Proposed Design

Hourly Active Market - Proposed Create hourly market for Active to work after square market is finished Clearing cost for every hour for little volume that can't be obtained in a piece Could build piece estimate somewhat to "zero" more hours RR to oversee morning Ramp HE 8 to 16 could be focused

Key Active Elements No AESO Bid Pure clearing value demonstrate reliable with vitality showcase 100% of volume exchanged at D-1 Blind sale according to vitality advertise Hourly Market for Shape Needs Model predictable with baseload Active market Unique cost for every hour on molding needs Maximum adaptability for members No OTC market Conscription if there is inadequate volume, i.e. no fallback to OTC Price top will be required: $1000/MWh aggregate OR remuneration suggested top

Standby NGX Market – Proposed Design

Key Standby Elements Activation value set at baseload Active clearing value Activation is not an incremental cost to AESO in respect to Active Fixes straightforwardness issue with a two section value Removes AESO impact – AESO sets just volume prerequisite Recommend clearing cost for premium Encourages proficient offering through the visually impaired closeout Consistent with whatever is left of the market plan Merit arrange for enactment in view of premium Lowest premium initiated first when suitable Most effective as actuation ought to be viewed as a cost and proficient market ought to initiate minimum cost first Incremental change – holds Standby as a protection/choice market as opposed to an entire update

Phased Implementation - Proposed Changes to the current model Move all acquirement to D - 1 Publish OTC value file every day Implement clearing value display for square items Relatively little change for NGX Implement new Standby estimating model Implement hourly market for Active and Standby Drop OTC market now

Key Changes From January 2009 Recommendations Shaped Active item dropped – hourly markets included Shaped item was purchased in light of 'offering rationale' that utilized volume before value like current OTC market Recommendation is to have hourly item with clearing costs for all hours with necessities over baseload volumes Participants allowed to offer individual hours Represents around 5% to 10% of aggregate volume Shaped Standby item additionally supplanted with hourly item 'Last shot' market arrangement before enrollment Allowance for OR suppliers <5 MW and future part for aggregators Standby premium – pay as offer changed to clearing

ISO Rule Development Current ISO rules incorporate system, offers, terms for vitality showcase however not OR advertise Rules modify to give advertise structure review to all business sectors (vitality, OR, contract AS, and DDS) Current ISO rules incorporate just continuous conventions for dispatch of OR Rules revise to incorporate diagram of items, offer volume handle, offer process, evaluating, settlement, making of legitimacy request (and parts for NGX and ISO)

ISO Rule Development Current ISO rules plot records and consistence for vitality advertise just Rewrite standards to elucidate parts for NGX and for ISO on OR items and conveyance Current ISO rules do exclude method and specialized prerequisites for OR AD and ID compromise to illuminate commitments and specialized details Rules will guarantee OR consistence is in the right area Contract issues with NGX Dispatch and conveyance with ISO and MSA Potential twofold risk issues will be tended to

Other Issues More AS items Wind may require new items Should fit into proposed outline Long term may need to grow constant Ancillary Services showcase Wind vulnerability may mean day ahead is not productive Alter Off Peak Definition? Either drop HE 24 or add to HE 1 to 7 for taking after day Reduce # of creases between Ancillary Services showcase time spans

Supply Surplus Initiative March 4, 2010 Market Services Stakeholder Session Ruppa Minhas

Agenda Supply surplus talk paper parts Purpose of govern survey Historical examination Overview of components that add to supply surplus conditions Current strategies – OPP 103 Short term and long haul choices for thought Risks if supply surplus conditions are not oversaw fittingly Minimum Operating Limit (MOL) versus Least Stable Generation (MSG) Discussion/Questions

Supply Surplus Discussion Paper Components Provides a foundation and appraisal of: Existing standards and strategies Previously proposed conventions Options for overseeing supply surplus conditions Discussion paper proposes a transient arrangement and starts talk on the long haul choices

Purpose of Rule Review Supply surplus was initially included as a major aspect of the Market and Operational Framework for Wind ("MOF") Stakeholder remarks on the MOF proposal paper for wind recommended that further and more extensive counsel was required Ensure that the guidelines and methodology are upgraded so that all generators are dealt with reasonably Ensure the tenets and techniques are satisfactory for overseeing supply surplus circumstances fittingly as the recurrence may increment because of: Projected increment of wind era Commissioning of vast baseload era

Historical Analysis

Factors that Contribute to Supply Surplus Conditions Low levels of interest High levels of base-load era High levels of imports Low levels of fares High levels of wind era Increased hydro accessibility amid spring keep running off

Factors that Contribute to Supply Surplus Conditions

Annual Average Minimum Stable Generation and Annual Average AIES Load

OPP 103 – Current Procedures Use of genius rata diminishing Generators are coordinated to their proclaimed least stable era level Wind and cogeneration are excluded The reasonableness and fittingness of permitting such an exception is assessed as every single other generator are liable to these systems

Options for Consideration Short term: No exclusion for twist No exception for co-era Scheduling of fares inside T-2 or inside the conveyance hour Voluntary generator decrease ask for (VGCR) Long term: Adaptation of market principles for wind era (adjustment of Must Offer/Must Comply for wind) Voluntary generator abbreviation program (VGCP)

Short Term Options - No Exemptions for Wind & Cogeneration "Professionals" Fairness: All generators are liable to supply surplus conventions All generators are liable to abridgement Section 2 of the Electric Utilities Act gives guidance in regards to electric vitality created and devoured exclusively on location Policy course Wind generators can restrain the measure of wind era

Short Term Options - No Exemptions for Wind & Cogeneration "Cons" For cogeneration: May have an operational and money related effect For wind generators: May be all the more procedurally muddled because of the absence of offer perceivability

Short Term Options – Voluntary Generator Curtailment Request System Controller would send a demand to the market for generators that can curtai