July 11, 2012 | NEPOOL markets committee
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July 11, 2012 | NEPOOL markets committee. Jonathan Lowell. Principal analyst | market development. Improving the ISO’s Ability to Operate Reliably, Produce Efficient Outcomes, and Reduce Avoidable Curtailments of Wind Resources. Wind Real-Time Dispatch. The Problem.

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July 11, 2012 | NEPOOL markets committee

Jonathan Lowell

Principal analyst | market development

Improving the ISO’s Ability to Operate Reliably, Produce Efficient Outcomes, and Reduce Avoidable Curtailments of Wind Resources

Wind Real-Time Dispatch


The problem
The Problem

  • The system faces more frequent localized congestion as wind penetration increases

  • Today, this congestion must be handled manually through curtailment instructions

    • To ensure reliability, system operators must take a conservative approach. Can’t risk operating “too close to the edge”.

  • Manual curtailments do not result in price separation

    • Wind resources and other Intermittent resources are “non-dispatchable”

    • Unit Dispatch Software (UDS) is unable to manage congestion by sending dispatch instructions

    • Creates local economic incentives to maximize output when reliability requires reduced output

    • LMPs are inconsistent with “dispatch” decisions to curtail zero-price resources


Wind rt dispatch where are we
Wind RT Dispatch – Where Are We?

  • Past MC presentations (see appendix) have described the shortcomings of existing practice, and the ISO’s proposal to provide a “Do Not Exceed” dispatch instruction to dispatchable wind resources.

  • This background information has not changed, and has been discussed several times with the Committee

    • Not the focus for today, but happy to respond to questions

  • Today’s presentation will focus on the principles behind the DNE dispatch and how it will impact LMPs


Dne dispatch
DNE Dispatch

  • Dispatchable wind resources will receive a DNE dispatch instruction that reflects:

    • current and forecast wind conditions

    • wind plant economic offers and operating status

    • transmission operating limits and system conditions

    • offers and operating status of non-wind plants

  • Goals of the Wind DNE Dispatch

    • Ensure reliable operation

    • Improve utilization of transmission facilities and minimize curtailments

    • Create prices and incentives consistent with efficient market outcomes (lowest production cost)

    • Enhance operators ability to manage the system during rapidly changing weather conditions


Dne dispatch principles
DNE Dispatch Principles

  • A wind resource may operate freely between 0 MW and the DNE limit, as wind conditions allow

  • Must not exceed the DNE limit

  • ISO will use telemetry from the plant and the new wind short term forecast system to produce a high confidence “expected wind generation” for the next dispatch interval

  • If a plant’s expected generation > DNE limit:

    • The plant is being prevented from producing its full potential output

    • Under these conditions, the plant would be eligible to set price

  • If expected generation <= DNE limit, the plant is not constrained by the dispatch, and would not be eligible to set price


Dne dispatch conceptual examples
DNE Dispatch – Conceptual Examples

Assume a 150 MW radial line with:

  • 100 MW wind plant offered at $0/MWH

  • 100 MW non-wind resource offered at $20/MWH

  • $35/MWH LMP where the line connects to the meshed grid

  • With no wind:

    • Exp wind = 0 MW, DNE = 50 MW

    • Non-wind DDP = 100 MW

    • LMP = $35

  • With 50% wind

    • Exp wind = 50 MW, DNE = 50 MW

    • Non-wind DDP = 100 MW

    • LMP = $35/MWH

  • With 75% wind

    • Exp wind = 75 MW, DNE = 75 MW

    • Non-wind DDP = 75 MW

    • LMP = $20/MWH

  • With optimal wind:

    • Exp wind = 100 MW, DNE = 100 MW

    • Non-wind DDP = 50 MW

    • LMP = $20/MWH

Note – to provide clarity in the illustration of DNE dispatch principles, examples ignore some of the more complex pricing constraints in the LMP calculator


Dne dispatch conceptual examples1
DNE Dispatch – Conceptual Examples

Assume a 100 MW radial line with:

  • 100 MW wind plant offered at $0/MWH

  • 100 MW non-wind resource offered at $20/MWH

  • $35/MWH LMP where the line connects to the meshed grid

  • With no wind:

    • Exp wind = 0 MW, DNE = 0 MW

    • Non-wind DDP = 100 MW

    • LMP = $35

  • With 50% wind

    • Exp wind = 50 MW, DNE = 50 MW

    • Non-wind DDP = 50 MW

    • LMP = $20/MWH

  • With 75% wind

    • Exp wind = 75 MW, DNE = 75 MW

    • Non-wind DDP = 25 MW

    • LMP = $20/MWH

  • With optimal wind:

    • Exp wind = 100 MW, DNE = 100 MW

    • Non-wind DDP = 0 MW

    • LMP = $20/MWH

Note – to provide clarity in the illustration of DNE dispatch principles, examples ignore some of the more complex pricing constraints in the LMP calculator


Dne dispatch conceptual examples2
DNE Dispatch – Conceptual Examples

Assume a 100 MW radial line with:

  • Two 60 MW wind plants offered at $0/MWH

  • 100 MW non-wind resource offered at $20/MWH

  • $35/MWH LMP where the line connects to the meshed grid

  • With no wind:

    • Exp wind = 0 MW, DNE = 0 MW

    • Non-wind DDP = 100 MW

    • LMP = $35

  • With 50% wind

    • Exp wind = 60 MW, DNE = 60 MW

    • Non-wind DDP = 40 MW

    • LMP = $20/MWH

  • With 85% wind

    • Exp wind = 102 MW, DNE = 100 MW

    • Non-wind DDP = 0 MW

    • LMP = $0/MWH

  • With optimal wind:

    • Exp wind = 120 MW, DNE = 100 MW

    • Non-wind DDP = 0 MW

    • LMP = $0/MWH

Note – to provide clarity in the illustration of DNE dispatch principles, examples ignore some of the more complex pricing constraints in the LMP calculator


Dne dispatch operational considerations
DNE Dispatch – Operational Considerations

  • Transmission lines in remote locations where many wind plants are locating tend to be “skinny”, and line limits cannot be exceeded, even for short periods

    • Normal rating = Short Term Emergency Rating = Long Term Emergency Rating

  • Another Example (using assumptions from prior slide, with several additional assumptons):

    • Expected wind = actual wind = DNE limit = 0 MW

    • Non-wind resources are operating at the limit of the line = 100 MW

    • Non-wind plant ramps at 1 MW/min

    • Wind plants each ramp at 20 MW/min, or 40 MW/min total


Dne dispatch operational considerations1
DNE Dispatch – Operational Considerations

  • Along comes a proverbial “optimal wind” gust

    • Expected wind now = 120 MW

    • DNE cannot be increased until the non-wind plant has ramped down to “make room” on the line

    • Alternatively, the line can be derated to allow some room to begin wind up-ramps

    • The ISO is evaluating how best to incorporate these considerations in the DNE algorithm to ensure reliable operation at the lowest cost.


Anticipated schedule
Anticipated Schedule

  • May MC meeting – conceptual overview

    • MR1 language available, but not discussed

  • June MC meeting – MR1 language presented

  • July MC meeting – request MC vote

  • August PC meeting (or later) - request PC approval


Appendix
Appendix

Wind RT Dispatch Presentation to the June 12, 2012 Markets Committee Meeting


The problem1
The Problem

  • The system faces more frequent localized congestion as wind penetration increases

  • Today, this congestion must be handled manually through curtailment instructions

    • To ensure reliability, system operators must take a conservative approach. Can’t risk operating “too close to the edge”.

  • Manual curtailments do not result in price separation

    • Wind resources and other Intermittent resources are “non-dispatchable”

    • Unit Dispatch Software (UDS) is unable to manage congestion by sending dispatch instructions

    • Creates local economic incentives to maximize output when reliability requires reduced output

    • LMPs are inconsistent with “dispatch” decisions to curtail zero-price resources


Other factors
Other Factors

  • When economic dispatch is insufficient to manage congestion, priority goes to resources that cleared or self-scheduled in Day-Ahead.

  • As a practical matter, this leads to economically inefficient outcomes

    • Renewable energy credits and production tax credits result in wind plants having a negative energy price

    • Interconnections on weaker portions of the grid, and fast ramp rates mean wind plants are typically curtailed more frequently than other resource types

  • Anticipated wind production generally not reflected in unit commitment for real-time

  • The ISO currently has no feasible way to dispatch wind plants that wish to offer economically


Why now
Why Now?

  • New England wind penetration has been doubling every year

  • Currently at 525 MW

  • Likely 900 MW by end of 2012

  • If Congress renews provisions for Production Tax Credits, wind resources could reach 1500-1700 MW by end of 2013

    • Existing manual curtailment procedures cannot effectively manage this amount of wind generation

  • Software infrastructure to support Wind RT Dispatch can be ready in 2014

    • Sooner would be better, but Wind Dispatch depends on other dispatch software improvements already underway


What s wrong with the status quo
What’s Wrong with the Status Quo?

  • Lack of real-time telemetry and uncertainty about anticipated wind output lead to:

    • More conservative operating practices and limits

    • Less optimal resource commitment

  • Suboptimal dispatch and inappropriate pricing

    • Low cost resources may be curtailed before higher cost resources

    • Manual curtailments to manage congestion don’t result in price separation

  • With higher wind penetration, system operators with only manual dispatch & curtailment procedures will be overloaded during dynamic weather conditions


Enabling improvements are already underway
Enabling Improvements Are Already Underway

  • Wind short-term forecast – early 2013

    • Highly accurate 5-minute forecast for each wind plant

    • Hourly forecasts for the coming 7 days

  • OP-14 & OP-18 – real-time telemetry from wind plants

  • Both of these:

    • Greatly improve operator situational awareness

    • Reduce uncertainty

    • Improve commitment and dispatch of all resources

    • Make possible a real-time “Do Not Exceed” (DNE) dispatch of wind resources


What is a do not exceed dispatch
What is a “Do Not Exceed” Dispatch?

  • UDS will calculate and send out a Do Not Exceed limit to each wind plant on dispatch

  • The DNE limits will reflect

    • Each plant’s economic offer curve

    • The maximum output of each wind plant under ideal weather conditions

    • Transmission constraints

    • Each plant’s telemetered physical status for the next dispatch interval

    • Current plant output (the so-called “persistence forecast”)

    • high-confidence “next 5 minutes” wind output forecasts

  • A wind plant is free to operating anywhere between 0 MW and the DNE limit

  • Considers both energy balance (i.e. gen = load) and reliability


How will wind rt dne dispatch work
How Will Wind RT DNE Dispatch Work?

  • The DNE limit reflects the maximum plant output that can be tolerated, given system conditions and constraints

  • Wind plants will be considered “following dispatch” if operating between 0 MW and the DNE limit and not exceeding ramping limits.

    • Output can vary with changing weather conditions

    • Downward ramps due to plant emergencies and/or decreasing wind not counted for “following dispatch”

  • Wind plants on dispatch will be eligible to set price

  • DNE dispatch allows UDS to perform price-based congestion management based on offer parameters

    • Will prevent “manual procedure” overload for system operators

  • Accurate forecasts and frequent telemetry should reduce curtailments and provide greater opportunity to maximize output.


Dne dispatch will initially be optional
DNE Dispatch Will Initially Be Optional

  • DNE dispatch implementation currently estimated for 2014

    • Wind resources will be non-dispatchable until DNE dispatch is available

    • Once available, DNE dispatch may be optionally selected by wind plants through their offer data

  • If/when negative energy offers become available, MR1 would be revised to make DNE dispatch mandatory for wind plants that meet one or more of the following conditions:

    • Interconnect to a transmission facility or a FERC jurisdictional distribution facility

    • Has a Capacity Supply Obligation

    • Is a Capacity Network Resource

    • Has a total nameplate capacity at the point of interconnection of >= 5 MW

    • Possible exclusion for “Settlement Only Generators” – may depend on operational needs of System Operators


Other participation considerations
Other Participation Considerations

  • Must be providing all weather and plant data required by recent OP-14 & OP-18 changes

    • This data supports the forthcoming real-time wind forecast system

    • Accurate real-time wind production forecasts are critical to effective operation of the DNE dispatch

  • No requirement to offer into Day-Ahead

  • Self-scheduling will continue to be permissible while Wind RT Dispatch is voluntary.

  • Assuming a dispatchable wind plant offers $0 commitment costs, it will be treated as “committed” whenever available (i.e. RTHOL > 0)

    • Otherwise, must offer & clear in DA, or self-schedule in RT


Concluding remarks
Concluding Remarks

  • Voluntary Wind RT DNE Dispatch – mid-2014

    • Market rules being presented today only address voluntary DNE dispatch

  • Partial/voluntary implementation:

    • Provides early operational/reliability benefits

    • Does not fully resolve pricing and congestion management issues

    • That requires that all wind plants are responding to DNE dispatch instructions

  • Full reliability benefit occurs only when Wind RT Dispatch becomes mandatory

    • Not anticipated until negative offers can be implemented (likely not until 2014 or 2015)

    • Mandatory Wind RT Dispatch will require a separate rule change


Anticipated schedule1
Anticipated Schedule

  • May MC meeting – conceptual overview

    • MR1 language available, but not discussed

  • June MC meeting – MR1 language presented

  • July MC meeting – request MC vote

  • August PC meeting (or later) - request PC approval


Appendix1
Appendix

Current Curtailment Protocol


Existing rt dispatch and congestion management
Existing RT Dispatch and Congestion Management

  • Existing real-time curtailment procedure

    • Economic dispatch – most-expensive dispatchable resources (based on sensitivity to the constraint) backed down first

      • Self-scheduled/non-dispatchable resources not impacted at this point

    • Resources that did not offer and clear in Day-Ahead

      • Resource with largest impact on the constraint curtailed first, as long as it can respond quickly enough

      • If not, other resources may also be requested to reduce output

    • DA-cleared/self-scheduled resources backed down last

  • Self-scheduling in DA

    • If multiple SS requests result in constraint violations, ISO rejects the request(s) that results in the least cost solution


Existing rt dispatch and congestion management1
Existing RT Dispatch and Congestion Management

  • Self-scheduling in RT

    • A SS request (effectively priced at $0/MWH) is accepted if it can be accommodated by backing down DA-cleared resources to their EcoMin/SS amount

    • If congestion develops and all online resources are RT SS at EcoMin, operators will manually deny self-schedules as needed

      • Solves the reliability problem, but does not result in price separation

  • If further action is required, operators may de-commit resources, taking into consideration:

    • Sensitivity to constraint, system/area capacity, EcoMax/EcoMin, Min Run & Min Down times, economics

  • Interconnections on weaker portions of the grid, and fast ramp rates mean wind plants are typically curtailed more frequently than other resource types.


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