Implementing constrained access Industry Forum 13 March 2018 - - PowerPoint PPT Presentation

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Implementing constrained access Industry Forum 13 March 2018 - - PowerPoint PPT Presentation

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Implementing constrained access Industry Forum 13 March 2018 AGENDA Agenda item Presenter Zaeen Khan, Executive Director Introduction and background Public Utilities Office Ashwin Raj, Project Lead Network connections and access reforms

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Implementing constrained access

Industry Forum 13 March 2018

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Department of Treasury

Agenda item Presenter

Introduction and background Zaeen Khan, Executive Director Public Utilities Office Network connections and access reforms Ashwin Raj, Project Lead Public Utilities Office Wholesale Electricity Market reforms Aditi Varma, Project Lead Public Utilities Office Allocating capacity in a constrained network Bobby Ditric, Project Lead Public Utilities Office Break Modelling methodology and assumptions Dr Nick Cutler, Senior Manager Ernst & Young Wrap up and close

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AGENDA

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Department of Treasury

INTRODUCTION & BACKGROUND

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Constrained network access is one of the most critical reform issues

The connections and access framework is a major barrier to generation investment in the SWIS It impedes new investment in low cost renewable generation It is also a major barrier to the success

  • f other reforms to

the electricity sector

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Department of Treasury

IMPLEMENTING CONSTRAINED ACCESS

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Improving access to Western Power’s network – Consultation Paper

Outline of essential reforms to adopt a framework of constrained network access

Allocation of capacity credits in a constrained network – Consultation Paper

Outline of a proposed approach to allocate capacity credits to certified capacity resources in a constrained network

Modelling the impacts

  • f constrained access

methodology and assumptions – Consultation Paper

Investigation of the financial implications to generators of a transition to a constrained network access regime

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Department of Treasury

IMPLEMENTATION TIMELINE

2018 2019 2020 2021 2022

Legislation Access Code Western Power instruments Power system operations Wholesale Electricity Market Rules 2020 Capacity Cycle Build and implement systems AA5 preparations

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Department of Treasury

ENGAGING WITH STAKEHOLDERS

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PUBLIC FORUMS SPECIFIC WORKING GROUPS INDIVIDUAL ENGAGEMENT LEVERAGE EXISTING GROUPS

  • Market participants
  • Government
  • Industry associations
  • Industry experts
  • Interested

stakeholders

  • Market Advisory

Committee

  • AEMO Consultative

Forums

  • Market participants
  • AEMO
  • Western Power
  • ERA
  • Market participants
  • AEMO
  • Western Power
  • ERA
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SLIDE 7

Department of Treasury

Essential Reforms

Connections and Access Framework

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Ashwin Raj Project Lead

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Department of Treasury

IMPLEMENTING REFORM

Equal access to network Manage implications Legislative requirements

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Level playing field

  • Generators
  • Western Power
  • Remove firm access
  • Transitional

arrangements

  • Immunity to Western

Power

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Department of Treasury

LEGISLATIVE REQUIREMENTS

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Remove firm access

Issues

  • Many access

contracts

  • Varied terms

& conditions

  • Confidential

Approach

  • General
  • verride
  • Specific

provisions

1 2 Implications

  • Contracts
  • Financial

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Department of Treasury

LEGISLATIVE REQUIREMENTS

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Transitional arrangements

Issues

  • Investigate

impacts

  • Provide the
  • ption

Approach

  • Rules and

criteria

  • Types of

losses

1 2 Market mechanism

  • Head of

power

  • Further

consultation

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Department of Treasury

LEGISLATIVE REQUIREMENTS

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Immunity for Western Power

Issues

  • Potential for

disputes

  • Need

certainty

1 Approach

  • Legislated

immunity

  • Narrowly

defined

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Department of Treasury

WHAT NEXT?

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Mar Apr May Jun Jul

  • Consultation
  • Review submissions
  • Publish Final

Methodology and Assumptions Report

  • Start modelling
  • Modelling results
  • Finalise and publish

modelling outcomes

  • Finalise and publish

policy recommendations

  • Advice to

Government

2018

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SLIDE 13

Department of Treasury

QUESTIONS

Contact us

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Noel Ryan A/Director, Energy Networks noel.ryan@treasury.wa.gov.au (08) 6551 4668 Ashwin Raj Project Lead ashwin.raj@treasury.wa.gov.au (08) 6551 1047

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Department of Treasury

Essential Reforms

Wholesale Market Arrangements

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Aditi Varma Project Lead

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Department of Treasury

MARKET REFORMS

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Security constrained market and dispatch system Reserve capacity pricing review Power system security Market power mitigation 1 2 3 4

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Department of Treasury

QUESTIONS

Contact us

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Matthew Martin Director, Energy Markets matthew.martin@treasury.wa.gov.au (08) 6551 4640 Aditi Varma Project Lead aditi.Varma@treasury.wa.gov.au (08) 6551 4756

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Department of Treasury

Essential Reforms

Allocating Capacity in a Constrained Network

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Bobby Ditric Project Lead

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Department of Treasury

CAPACITY ALLOCATION

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Three new elements for capacity allocation with constrained access

Separation between capacity certification and allocation Modelling

  • f network

congestion 1 2 Capacity priorities 3

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Department of Treasury

CAPACITY ALLOCATION

  • Information regarding network congestion is

critical

  • Publishing network constraints and a ‘network

model’

  • New entrant facilities will require new

information

  • New entrant facilities will be required to provide

new information

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Preparatory stage

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Department of Treasury

CAPACITY ALLOCATION

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Network congestion information New entrant information to develop network model New entrant ready for assessment stage

Preparatory stage

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Department of Treasury

CAPACITY ALLOCATION

  • Facility technical certification
  • Similar to current certification but ignores network

access

  • Every facility assigned technical maximum

generation limit

  • Model network congestion in capacity credit

calculator

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Assessment stage

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Department of Treasury

CAPACITY CALCULATIONS

  • Determines the maximum Capacity able to be

generated by each facility across numerous generation scenarios, at time of Peak Demand

  • Considers all system normal network constraint

equations

  • Capacity determined per Capacity Year

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‘Proof of concept’ Capacity Calculator has been developed

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Department of Treasury

CAPACITY CALCULATIONS

23 CAPACITY CALCULATOR Peak Demand Network Constraints (system normal) Capacity calculated for each facility by scenario Confidence interval applied to determine overall Capacity Generation scenarios

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Department of Treasury

PEAK DEMAND

  • All Capacity calculations performed at time of Peak Demand,

consistent with current WEM Rules Capacity assumptions

  • AEMO

10% POE SWIS demand forecast for the relevant Capacity Year

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  • Define network capability at Peak Demand, under system normal

conditions

  • Assume planned network outages would not occur under forecast

Peak Demand conditions

  • Network constraints currently developed using approach similar to

AEMO NEM pre-dispatch

  • Network constraints account for impact of new entrants

NETWORK CONSTRAINTS

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Department of Treasury

GENERATION SCENARIOS

  • Preferred approach is to determine Capacity

considering ‘all credible generation scenarios’

  • Generation scenarios must allow for facilities to be

dispatched to the physical capability at time of Peak Demand

  • Each generation scenario must have total generation

dispatched = Peak Demand

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Capacity calculations are dependent on the approach taken to develop generation scenarios

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Department of Treasury

FINAL CAPACITY VALUE

  • Generators are constrained off or on to alleviate network

constraints – Objective is to minimise constraint applied

  • For each generation scenario the Capacity value for a

facility can be either:

  • the physical upper limit for the facility; or
  • Its constrained off value (where applicable)
  • The overall physical Capacity value for each facility is

then taken to be that value able to be achieved with 95% confidence across all scenarios

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Each generator scenario is run through the Capacity Calculator

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Department of Treasury

CAPACITY ALLOCATION

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Accreditation stage

Capacity credit determination

  • Capacity credits

limited to physical limit of the network

Capacity priorities

  • Monthly settlement
  • f any differences

in capacity revenue

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Department of Treasury

QUESTIONS

Contact us

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Matthew Martin Director, Energy Markets matthew.martin@treasury.wa.gov.au (08) 6551 4640 Bobby Ditric Project Lead bobby.ditric@treasury.wa.gov.au (08) 6551 1124

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Department of Treasury

Morning Tea Break

Light refreshments are available in the foyer

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