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Locational Forward Reserves Market: Reserve Requirements

Locational Forward Reserves Market: Reserve Requirements. NEPOOL Markets Committee September 29, 2004 Marc D. Montalvo ISO-NE Markets Development. Outline. Schedule Update Establishing the System Requirements Establishing the Zonal Requirements. ASM Project Schedule Update.

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Locational Forward Reserves Market: Reserve Requirements

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  1. Locational Forward Reserves Market: Reserve Requirements NEPOOL Markets Committee September 29, 2004 Marc D. Montalvo ISO-NE Markets Development

  2. Outline • Schedule Update • Establishing the System Requirements • Establishing the Zonal Requirements

  3. ASM Project Schedule Update • Present to MC for a vote 1/12/05 • Present to NPC for a vote 2/4/05 • File with FERC end of February • Planned 1 October 05 go-live date

  4. Forward Market Products • 10 Minute non-spinning Reserves • 30 Minute Operating Reserves • Local 30 Minute Operating Reserves

  5. Pool-Wide Forward Reserve Requirements • System Requirements Established according to OP8 • 10 Minute Non-Spinning Reserve -- 50% of first contingency loss • 30 Minute Operating Reserve -- 50% of second contingency loss • ISO is evaluating the continued inclusion of Replacement Reserves in the requirement.

  6. System 1st and 2nd Contingencies • ISO New England designates the First Contingency Loss and the Second Contingency Loss in New England. • The ISO regularly reviews the system configuration to establish the 1st and 2nd Contingencies. • 1st and 2nd Contingencies are generally the two largest possible supply losses. • E.g., Millstone 3, Seabrook, Mystic 8&9, Phase II.

  7. Replacement Reserves Per OP8 Sec.VII. “To the extent that, in the judgment of the ISO New England Chief Operating Officer or an authorized designee, the New England Bulk Power System can be operated within the North American Electric Reliability Council’s (NERC), NPCC’s, and NEPOOL’s established criteria, the Replacement Reserve Requirement may be decreased to zero based upon ISO New England’s capability to restore Ten-Minute Reserve within thirty minutes of a deficiency.”

  8. Locational Reserve Requirements • Locational Reserve Requirements are established according to OP19. • Locational reserve requirements reflect the need for additional 30 minute Operating Reserves to provide 2nd contingency coverage in import constrained zones. • For the locations, the 1st contingency is generally a line outage. • Coverage is required for the greater of the 2nd generator or line contingency.

  9. Typical Locational 2nd Contingencies • SWCT 2nd Gen Bridgeport Harbor CC 2nd Line 329 • CT 2nd Gen Millstone 2 or 3 2nd Line 395 • NEMA/Bos 2nd Gen Mystic 8 and/or 9 2nd Line 394, 337

  10. Zonal Requirements Methodology (1) • The requirements will be derived from an analysis of the same data used to perform the RAA process. • The requirements will be established on a seasonal on-peak and off-peak basis. • The historical requirements will be split into summer and winter bins. • We propose that the on-peak LFRM Requirement be set equal to the 95th percentile level for the season in question. Alternative approaches to establishing the percentile value are being studied. • The off-peak LFRM requirement will be set to zero.

  11. Zonal Requirement Methodology (2) • In the event that a change in the configuration of the transmission system or disposition of major generating resources occurs, the 2nd Line and 2nd Gen assumptions will be modified as appropriate. • This information will be derived from the RTEP. • The requirements will be recalculated using the modified assumptions and locational requirements established. • If a change is expected within a procurement period, the decision to use the modified requirements or the historically derived requirements will depend, at least in part, on the expected timing of the change during the procurement period.

  12. Sample Requirements • The following seasonal on-peak locational reserve requirements have been derived from the historical data according to the methodology described above. • SW CT Summer 750 MW • SW CT Winter 670 MW • CT Summer 1640 MW • CT Winter 1200 MW • NEMA/BOS Summer 950 MW • NEMA/BOS Winter 900 MW

  13. Reserve Zone Nesting • Reserves that meet the SWCT requirement simultaneously meet the CT requirement and the System 30 minute requirement • Reserves that meet the CT requirement simultaneously meet the System 30 minute requirement • Reserves that meet the NEMA/Boston requirement simultaneously meet the System 30 minute requirement

  14. Analysis of Historical Requirements Data • The requirements reflect the amount of reserves needed to cover 100% (less external reserve support) of the more severe of the 2nd generation or the 2nd line contingency in each location. • The magnitude of the contingencies and the frequency with which a generation or a line contingency set the requirement is summarized below. • The sample period is 1 July 03 through 31 August 04.

  15. Distribution of Locational Requirements Zone Contingency MW Freq. NEM/Boston 2nd Gen 700-800 4% 2nd Line 1300-2175 96% Conn. 2nd Gen 1150 78% 2nd Line 1100-1680 22% SW Conn. 2nd Gen 470 29%   2nd Line 608-1108 71%

  16. Questions

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