Day-Ahead Commitment Process Design Introduction Technical Panel - - PowerPoint PPT Presentation

Day-Ahead Commitment Process Design Introduction

Technical Panel

November 8, 2005

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Introduction

Day-Ahead Commitment Process:

– Market initiative to address reliability needs for Ontario’s power system in 2006 – Will provide a much better indication of supply and demand of energy one day in advance than is possible now

• Day-Ahead reliability guarantees compensate

committed resources for losses on the dispatch day.

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Introduction

• Simple commitment process

– Attempt to minimize the impacts on market prices and uplifts – Desire minimal change to both the IESO and the market participant systems and processes

• Objectives

– Provide improved opportunity for scheduling of imports in order to decrease import failures – Ensure sufficient internal generation resources are on- line in real-time to satisfy reliability needs

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Summary

• A proposed Day-Ahead Commitment Process design

was first posted on September 30, and has been significantly changed as a result of stakeholder feedback:

– At a full-day general session for all stakeholders – Oct 6 – At eight full-day focused stakeholder sessions held with representatives of suppliers and consumers – Oct 12 - Nov 3

• A revised design document will be posted later this

week and discussed at an open stakeholder session on Nov 16.

• Not all design details have been finalized.

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Design Topics

Day Ahead Commitment Process

• Day Ahead Submission of Offers and Bids

– Ontario Generators

• Dispatchable, Self-Scheduled, Intermittent and Transitional Scheduling

Generators

– Loads – Imports – Exports – Timing – Changes to Data

• Day Ahead Commitment Process
• Reliability Guarantees
• Surveillance and Compliance

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Ontario Generators

Day Ahead Submission of Offers

• Voluntary day-ahead submission of offers for

dispatchable generation

– Must include energy-limits if applicable – Limit real-time offers to hours and volume offered day-ahead

• Mandatory day-ahead data submissions for self-

scheduling generation facilities, intermittent generators and transitional-scheduling generators.

• Day ahead offers and data needed to provide complete

picture of internal resource situation

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Loads

Day Ahead Submission of Bids

• Voluntary day-ahead submission of dispatchable load bids

– expected to bid +MMCP if plan not to be dispatchable next day – Limit dispatchable bids for real-time dispatch to hours and volume bid day-ahead

• No day-ahead guarantee paid to dispatchable loads, as they

are flexible and treated like quick-start generators

• No ability for any involvement of non-dispatchable loads in

this process

– Quantity to be forecast by IESO as is done now for pre-dispatch – IESO to consider using average hourly demand forecast instead of peak.

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Imports

Day Ahead Submission of Offers

• Voluntary day-ahead submission of import
• ffers

– cannot mandate or force import offers

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Exports

Day Ahead Submission of Bids

• Export bids will not be considered by the day-

ahead commitment process

– IESO staff would prefer to consider exports (and thus market demand) in the day ahead commitment process, but have been unable to determine a viable mechanism to include them – stakeholders have also considered this challenge, but have also been unable to develop a viable proposal

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Timing

Data Submission for Day-Ahead Commitment Process

• Offers and bids for consideration by the Day

Ahead Commitment Process to be submitted by 11:00 day-ahead

– same as the current window for submitting dispatch data for the initial pre-dispatch schedule – use existing market participant interfaces

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Price and Quantity Changes

During the Day-ahead Commitment Process

• Energy-limited resources

– allowed to change offers to move energy to other hours and resolve deficiencies

• Other resources

– no changes to price and quantity considered until day-ahead commitment process concludes

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Price and Quantity Changes

After the Day-ahead Commitment Process

• Energy-limited resources

– allowed to change price, volume, hours, energy-limit

• Other internal resources

– allowed to change offers and bids within envelope

• ffered or bid into day-ahead commitment process
• reductions in quantity not allowed if impacts reliability
• envelope can expand if required for reliability or if participant

couldn’t reasonably know of capacity increase day-ahead

• Imports

– allowed to change price, volume, hours

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Design Topics

Day Ahead Commitment Process

• Day Ahead Submission of Offers and Bids
• Day Ahead Commitment Process

– Timeline – Run Process Every Day? – “Market” Iterations – IESO Commitment Actions – Pre-Dispatch of Record – Transparency of Process – Integration of Day-Ahead Commitment Process with Global Adequacy Authority

• Reliability Guarantees
• Surveillance and Compliance

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Day-Ahead Commitment Process Overview

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Timeline

Day Ahead Commitment Process

• Use existing pre-dispatch scheduling timing

– Initial PD for next day begins at 11:07 – Subsequent PD runs each hour – Final PD for Day-Ahead Commitment Process begins at 14:07, results available about half hour later.

• Generators accept/

reject Guarantee by 15:00

• Constraints for internal generators determined by Day-

Ahead Commitment Process passed to subsequent pre- dispatch process by 16:00.

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Run Every Day?

Day Ahead Commitment Process

• Process will be run every day

– IESO staff need the complete day-ahead view of the system that this process will provide every day.

• Better day-ahead view also beneficial to participants
• Will guarantees be offered every day?

– Remains an outstanding issue

• IESO position will be provided in the next version of the design

document and discussed with stakeholders on Nov 16.

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“Market” Iterations

Day Ahead Commitment Process

• Energy Limited Resources can adjust offers

during the first two pre-dispatch process iterations after the initial pre-dispatch run

– Up to 13:00

• Allows market to try and fill any schedule

“holes”, before IESO takes commitment actions

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IESO Commitment Actions

Day Ahead Commitment Process

• IESO will request to constrain on non-quick start

generators to create a viable day-ahead schedule

• Two reasons for these IESO actions:

– Avoid a short shutdown of a generator between two periods where it is scheduled. – Avoid a generator commitment for less than its minimum loading and run time.

• Affected Market Participants consulted before IESO

commitment actions taken.

– Action only taken if acceptable to MP

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Pre-Dispatch of Record

Day Ahead Commitment Process

• Pre-dispatch of Record Produces:

– Constrained schedules for dispatchable generation resources that are eligible for the Guarantee. These schedules will be to at least the minimum loading point for the minimum run-time. – Constrained schedules for imports. These schedules represent the quantities and hours to be delivered in real-time. Scheduled imports are committed and are eligible for the day-ahead intertie offer guarantee.

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Process Transparency

Day Ahead Commitment Process

• Existing pre-dispatch schedule publication to

remain unchanged

• Notification to market of IESO need to take

commitment actions

• Notification to market of IESO commitment

actions taken

– While meeting required confidentiality rules

• Discussion of IESO desired commitment actions

with affected market participants

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Integration of Day Ahead Commitment Process with Global Adequacy Authority

• IESO is separately pursuing Market Rules to

provide it the authority to constrain resources for global adequacy.

• One of the principles considered for the application
• f this authority is to delay applying resource

constraints until the last opportunity.

• Given physical characteristics of generators, this

may mean the application of “global adequacy” constraints during or even before the Day Ahead Commitment Process in some cases.

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Design Topics

Day Ahead Commitment Process

• Day Ahead Submission of Offers and Bids
• Day Ahead Commitment Process
• Reliability Guarantees

– Generation Cost Guarantee – Day-Ahead Intertie Offer Guarantee (DA IOG) – Integration with Existing Real-Time Guarantees

• Surveillance and Compliance

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Generator Cost Guarantee

Reliability Guarantees

• Offers a guaranteed recovery of certain eligible costs for

domestic generation facilities that are not quick-start facilities

– Eligible costs include start-up and minimum generation costs – Cost data submitted ex-post (same as SGOL) – Revenues earned from energy price and CMSC for minimum load are compared with costs submitted (same as SGOL)

• Eligibility to receive a guarantee requires:

– “scheduled” day-ahead for a period at least equal to the resource’s minimum run time and minimum loading point and – acceptance of the reliability guarantee and – performing in real-time in a manner consistent with the day-ahead commitment.

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Generator Cost Guarantee (cont.)

Reliability Guarantees

• Acceptance of the generation cost guarantee is

voluntary.

• Acceptance of a day-ahead generation cost

guarantee does not preclude the right of the market participant to receive Congestion Management Settlement Credits for that facility.

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Day-Ahead Intertie Offer Guarantee

Reliability Guarantees

• Allow for imports to be scheduled a day in

advance with assurance that they will recover at least day-ahead as-offered costs.

– Similar construct to real-time IOG

• DAIOG payments may be offset if the market

participant subsequently arranges export transactions in the real-time market.

• No DAIOG, and possible “buy-out” penalty for

imports that fail to perform in real-time.

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Integration with Real-Time SGOL & IOG

Reliability Guarantees

• Real-Time SGOL will be maintained

– Need to maintain the capability to get resources on-line in real- time to meet unanticipated needs.

• Real-Time IOG will be maintained

– Need to maintain the capability to get additional imports scheduled in real-time to meet unanticipated needs. – While the DA-IOG should improve reliability by reducing the instances of real-time import failures, introduction of DA-IOG will not alleviate the fundamental condition that led to the need for the current real-time IOG.

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Design Topics

Day Ahead Commitment Process

• Day Ahead Submission of Offers and Bids
• Day Ahead Commitment Process
• Reliability Guarantees
• Surveillance and Compliance

– Acceptable Bid/Offer Behaviour – Compliance for Day-Ahead Commitments

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Bid/Offer Behaviour

Surveillance and Compliance

• IESO’s Market Assessment Unit (MAU) expects to take a

light-handed approach to surveillance with implementation of the Day Ahead Commitment Process

– competition exists amongst resources – not passing judgment on “what are reasonable offers and bids”

• MAU will continue surveillance of the market

– MAU is not imposing any new surveillance market rules in advance of the start of this process – MAU will have all the data and will be vigilant in observing the actions of generators, dispatchable loads, importers and the IESO (e.g. load forecast)

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Compliance for Day-Ahead Commitments

Surveillance and Compliance

• Internal Resources – None

– Do not want to impose financial penalties or force positions on internal generators when no day-ahead financial position is awarded

• Importers – Maybe

– One of the issues still to be resolved. – A buy-out penalty mechanism is being discussed – Further discussion with stakeholders to occur this week and on Nov 16.

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Proposed Timeline for Market Rules

• Three rules packages:

– Data Submission

• Amendment submission presented today

– Commitment Process – Settlements

• Draft rule amendments for all three packages to

be discussed at Nov 29 TP

• Further discussion at Dec 13 TP

– Rules posted for general stakeholder review and comment following this

• TP vote on rule amendments Jan 10

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Other Events Timeline

• Other events on the timeline for final approval
• f the Day-Ahead Commitment Process

– Revised design document published – Nov 11

• This will be emailed to TP members

– Open stakeholder session - Nov 16 – Stakeholder Advisory Council - Nov 28 – IESO Board considers high-level design - Dec 8 – IESO Board considers market rules - Feb 3