Managing System Reliability in the New York Competitive Energy Markets
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Managing System Reliability in the New York Competitive Energy Markets. A presentation to the System Operator for the Unified Energy System of Russia Moscow, Russia September 2007. Paul Kiernan Reliability Senior Engineer New York Independent System Operator. The NYISO’s Primary Purposes.

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Managing System Reliability in the New York Competitive Energy Markets

A presentation to the

System Operator for the Unified Energy System of Russia

Moscow, Russia

September 2007

Paul Kiernan

Reliability Senior Engineer

New York Independent System Operator


The NYISO’s Primary Purposes

  • Reliable Operation of the New York Bulk Power System

  • Administration of the Wholesale Electricity Markets


Capacity

Transmission Congestion Contracts

NYISO Markets and Auctions

Energy

Virtual Trading

Ancillary Services


Generate

Transmit

Distribute

Bill

Customers

Pre-Restructuring

Vertically

Integrated

Utilities

  • Eight Utility Companies

  • _____________________________________________________

  • Long Island Lighting

  • Consolidated Edison

  • Orange and Rockland

  • Central Hudson

  • Niagara Mohawk

  • New York State Electric

  • Rochester Gas and Electric

  • New York Power Authority

  • _____________________________________________________

  • New York Power Pool

  • Coordinated Operations


Pre-Restructuring

Power System Operation

Each utility operated independently

  • Scheduled generator and transmission maintenance

  • Committed and dispatched generation to meet load

  • Determined interchange schedules

  • Controlled voltage with mVar resources

  • Controlled flows with phase angle regulators

  • Determined switching operations

  • Solved local transmission security problems

  • Distributed energy to the customers in its franchise territory


Pre-Restructuring

Economic Operation

Each utility was:

  • Regulated by federal and state agencies

  • Purchased and sold energy

    • Direct Two Party

    • New York Power Pool Central Dispatch

    • Prices determined by production costs

  • Scheduled transactions on its transmission system for its sole benefit


Pre-Restructuring

Coordinated Operations

New York Power Pool

(Voluntary alliance of the eight utilities)

  • Reserves

  • Transaction schedules

  • Central Energy Dispatch

  • Interconnection planning/operating studies

    Principle Directive: Maintain Reliability


Post-Restructuring

  • Disaggregate Functions

    • Eliminate Market Power of the Vertical Utilities

  • Increase Number of Market Participants

    • Increased Competition Will Drive Down Prices

  • Open the Transmission Systems

    • Ensure access to all for competitive use


Pre-restructuring

Eight Vertically Integrated Utility Companies

New York Power Pool

Coordination

Central Dispatch

Post-restructuring

More than 120 Market Participants

Disaggregated Market Functions

Generating Companies

Transmission Companies

Power Marketers

Load Serving Entities

NYISO

Operate Power System

Administer Markets

Comparison


Markets

Multiple Market Participants

Profit Motive

Flexible Market Design

Maximum Use of the Transmission System

Reliability

Need to Maintain the Reliability of the System

Highly Constrained System

Post-Restructuring Challenge


Independent System Operator

  • Maintain system reliability

    • Assume control of the New York transmission system

    • Comprehensive planning to real-time security

  • Facilitate fair and open access to the transmission system

    • Determine commitment of generation resources

    • Determine transaction schedules

  • Impartially administer wholesale electricity markets

    • Bid-based system; bids are confidential

    • Clearing prices are published


Standard Market Design

Two Settlement System

  • Day Ahead Commitment

  • Real Time Commitment

  • Real Time Dispatch


Two Settlement System

Day Ahead Market

  • Opportunity to lock in prices for next day

  • Loads supply bids to purchase energy

    • For all, part or none of next day load

  • Generators supply offers to sell energy

  • Bilateral transactions accepted

  • Various pricing hedges available

  • Clearing prices are made public


First Settlement: Day Ahead Schedule

Scheduled Load & Generation become forward sales and purchase contracts…. with financial obligations to provide or consume actual energy.


11 AM - Day Ahead Results Posted

Day 0

HB3 HB4 HB5 HB6

0 15 30 45

0 15 30 45

0 15 30 45

0 15 30 45 0

Day Ahead

SCUC

5 AM - Day Ahead Market Bids Due

Day 1

Hour

Ahead

RTC

75 Minutes before Hour

Bidding Closes

30 Minutes before Hour

Results Posted

Market Timing

Real

Time

Dispatch

RTD

RTD Basepoints

Every 5 Minutes

AGC Basepoints

Every 6 Seconds

HB5

0 15 30 45 0


11 AM - Day Ahead Results Posted

Day 0

HB3 HB4 HB5 HB6

0 15 30 45

0 15 30 45

0 15 30 45

0 15 30 45 0

Security Constrained Unit Commitment

5 AM - Day Ahead Market Bids Due

Day 1

Real

Time

Commitment

75 Minutes before Hour

Bidding Closes

30 Minutes before Hour

Results Posted

Market Timing

Real

Time

Dispatch

RTD Basepoints

Every 5 Minutes

AGC Basepoints

Every 6 Seconds

HB5

0 15 30 45 0


Load Forecasts

Load Bids

Energy Offers

Transaction Bids

Virtual Load & Supply

System Constraints

Outages

Day Ahead

Security

Constrained

Unit

Commitment

Clearing prices

Forward Contracts

Preliminary Schedule

Real Time

Commitment

Hour

Ahead

Energy Offers

Transaction Bids

Advisory prices

Preliminary Dispatch

Transaction Schedule

Market Inputs

Real Time Load

Real Time

Dispatch

Real

Time

Dispatch

Real Time prices

Real Time Dispatch


Security

Constrained

Unit

Commitment

Day Ahead

Commitment tool

1. Selects most economic mix of generation and transaction resources as bid

  • to meet forecasted load and reserve requirements

  • based on offers provided

    2. Schedules are constrained by security evaluations

  • recognizes all transmission limits

  • recognizes all interface limits

    3. Establishes day-ahead forward contracts for generation, load, and transactions


Chateauguay

New York ISO

Willis

Moses

Transmission System

Massena

(230 kV and above)

Plattsburgh

Adirondack

Oswego

Complex

Somerset

Marcy

Rotterdam

Sta.80

New

Scotland

Edic

Pannell

Clay

Porter

Huntley

Alps

Stolle Rd.

Lafayette

Leeds

Meyer

Dunkirk

Watercure

Fraser

Oakdale

Hillside

Coopers

Pleasant

Corners

Valley

Roseton

Rock

Buchanan

Tavern

Millwood

Legend:

Homer City

765 kV

Ramapo

Sprainbrook

500 kV

Dunwoodie

W49St/Rainey

345 kV

Shore Rd.

Farragut

230 kV

E.Garden City

Goethals

St. Lawrence

Niagara

Gilboa

CSC

Neptune


Dunwoodie

Farragut

Goethals

Chateauguay

Stability

Constraints

Saunders

Willis

Moses-

St. Lawrence

Massena

Dennison

Plattsburgh

Moses South

Sandbar

Colton

Blissville

Whitehall

Adirondack

Central - East

Bennington

Hoosick

Oswego

Dysinger East

Complex

Somerset

West - Central

Marcy

Rotterdam

Beck

Niagara

Sta.80

Pannell

New

Robinson Rd.

Scotland

Edic

Porter

Clay

Huntley

Alps

Gilboa

Lafayette

Stolle Rd.

Richfield

Springs

Inghams

Leeds

Gardenville

Meyer

Andover

Palmiter

Total - East

Dunkirk

Fraser

Watercure

Oakdale

Hillside

Coopers

Pleasant

Corners

Valley

Roseton

Upny - Con Ed

Rock

Buchanan

Tavern

Millwood

Legend:

Dunwoodie South

Homer City

765 kV

Ramapo

Sprainbrook

500 kV

W49St/Rainey

345 kV

Shore Rd.

230 kV

E.Garden City

115 kV


Real Time

Commitment

Hour Ahead Real Time

Commitment

Same software model and structure as Security Constrained Unit Commitment

  • Runs every 15 minutes, optimizing ten periods – totaling 2 ½ hours

  • Observes updated load forecast

  • Evaluatesresource requirements

    • Generator outages, transaction cuts, changes to topology

  • Recognizes Hourly Bid Transactions

  • Commits 10 and 30 Minute start resources

    • Recognizes unit startup times and costs

  • Produces advisory prices


Real Time

Dispatch

Real Time Dispatch

Same software model and structure as Security Constrained Unit Commitment and Real Time Commitment

  • Dispatches generators with basepoints to meet the 5 minute projected load forecast

  • Adjusts generation to solve security constraints

  • Maintains reserve requirements

  • Develops regulation dispatch “basepoints” every 6 seconds to correct Area Control Error

  • Calculates real-time clearing prices


Second Settlement: Real Time Market

More Options

  • Loads can schedule bilateral transactions

  • Buy at real time prices

  • Generators can schedule bilateral transactions

  • If accepted in the day ahead market

    • Can lower bid prices

  • If not accepted in the day ahead market

    • Can increase, decrease or maintain bid price


Second Settlement: Real Time Balancing Market

Paid consistent with their forward contracts

  • Generators that operate as scheduled

  • Loads that consume as scheduled

    Purchase and/or sell supplemental energy,

    as needed, at real-time clearing prices

  • Generators that operate differently than scheduled

  • Loads that consume differently than scheduled


Real Time

Actual Load < Day Ahead Load

Real

Time

Actual Load 45 MW

Load Buys 5 MW @ Real Time

Price

Real

Time

Real

Time

Load Consumed 40 MW Bought @ Day Ahead

Clearing Price

Second

Settlement

First

Settlement

Day

Ahead

Load Buys 40 MW @ Day Ahead

Clearing Price


Real

Time

Actual Dispatch 45 MW

Generator Sells 5 MW @ Real Time

Prices

Real

Time

Real

Time

Generator Dispatched 40 MW Sold @ Day

Ahead

Clearing

Price

Real Time

Actual Dispatch < Day Ahead Dispatch

Second

Settlement

First

Settlement

Day

Ahead

Generator Sells 40 MW @ Day Ahead

Clearing Price


REAL

TIME

Load Sells 10 MW @ Real Time

Price

Excess 10 MW

Real

Time

Actual Load 30 MW

Load Consumed 30 MW of 40 MW Bought @ Day Ahead

Price

REAL

TIME

Real Time

Actual Load < Day Ahead Load

Second

Settlement

First

Settlement

Day

Ahead

Load Buys 40 MW @ Day

Ahead

Clearing

Price


Real

Time

Generator Buys 10 MW @ Real Time

Price

Excess 10 MW

Real

Time

Real

Time

Actual Dispatch 30 MW

Generator Dispatched 30 MW of 40 MW Sold @ Day Ahead

Price

Real Time

Actual Dispatch < Day Ahead Dispatch

Second

Settlement

First

Settlement

Day

Ahead

Generator Sells 40 MW @ Day Ahead

Prices


The New York Independent System Operator (NYISO) is a federally regulated, 501(c) 3 nonprofit corporation that began operations in 1999 to facilitate the restructuring of New York’s electric industry. The NYISO operates the state’s bulk electricity grid and administers the state’s wholesale electricity markets.

__________________________________________________________

For more information:

www.nyiso.com


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