NYISO Generation NYISO Generation Characteristics and Operation Characteristics and Operation at Peak Load Periods at Peak Load Periods David J. Lawrence / Peter Carney New York Independent System Operator Prepared for : Ozone Transport Commission HEDD Options Workgroup January 11, 2006 Newark, NJ
Topics to Cover Topics to Cover � Overview of the NYISO � Characteristics of NY Generation � NYISO Demand Response Programs � NYISO Installed Capacity Market � Performance During Aug. 2, 2006 Peak 2
Overview of the NYISO Overview of the NYISO � NYISO formed December 1, 1999 � Independent board and management � Highly divested and complex marketplace featuring co-optimization market clearing systems � Most of the State’s generation is independently owned � NYISO market volume was $10.7 billion in 2005 and $41.1 billion since inception � Unique challenge: New York City is world’s biggest and most complex load pocket 3
4 NYISO Generation Mix NYISO Generation Mix
Megawatts of New Generation* Megawatts of New Generation* by NYISO Zone 1999 - -2005 2005 by NYISO Zone 1999 E F D B 7 MW 1,715 MW A 10 MW C 43 MW 33 MW G * Built or Under Construction H I J K 801 MW 2,143 MW 5
NYISO Demand Response NYISO Demand Response Programs Programs
Demand Response Program Overview Demand Response Program Overview The NYISO operates two reliability-directed demand response programs: � The Emergency Demand Response Program (EDRP): resources paid the greater of $500/MWh or the prevailing LBMP for � curtailments no consequences for enrolled participants that fail to curtail � minimum 100 kW requirement – can aggregate resources � � The Installed Capacity Special Case Resources Program (SCR): certified resources can offer unforced capacity (UCAP) to Load Serving � Entities (LSEs). resources are obligated to curtail when called upon to do so with two or more � hour’s notice, provided that they were notified on the day prior resources are subject to testing to verify that they can fulfill their curtailment � requirement. failure to curtail could result in penalties administered under the ICAP � program. Participants register either for EDRP or ICAP/SCR but not both. 7
EDRP & SCR Programs Historical Participation in EDRP & SCR Programs Historical Participation in MW Registere 1000 1200 1400 1600 1800 2000 200 400 600 800 0 D ate 5/23/2001 6/7/2001 M 7/5/2001 W 7/26/2001 Registered 8/20/2001 9/6/2001 12/18/2001 5/1/2002 6/6/2002 6/24/2002 7/1/2002 8/1/2002 9/12/2002 EDRP & SCR G 6/25/2003 # Custom 8/5/2003 10/14/2003 2/6/2004 2/26/2004 Date 3/29/2004 ers 5/4/2004 6/24/2004 7/15/2004 rowth 8/15/2004 9/15/2004 10/26/2004 # Custom 11/9/2004 12/7/2004 1/18/2005 2/9/2005 8/1/2005 ers (Disaggregated) 10/18/2005 12/12/2005 2/6/2006 4/18/2006 5/31/2006 7/22/2006 8/31/2006 10/16/2006 11/30/2006 0 500 1000 1500 2000 2500 3000 # Customer 8
Interruptible Load Comparison Interruptible Load Comparison EDRP+SCR Interruptible Load (M W ), Novem ber 2005, Novem ber 2006 and October 2006 500.0 450.0 400.0 350.0 1230 MW of 300.0 interruptible load 250.0 registered as 200.0 of November 2006 150.0 100.0 50.0 0.0 A B C D E F G H I J K 2005 Load Previous M onth Load 2006 Load 9
Generator Comparison Generator Comparison EDRP+SCR Generation (MW), Novem ber 2005, Novem ber 2006 and O ctober 2006 160.0 140.0 120.0 100.0 250 MW of distributed 80.0 generation registered as 60.0 of November 2006 40.0 20.0 0.0 A B C D E F G H I J K 2005 Gen Previous M onth Gen 2006 Gen 10
Distributed Generator Rules Distributed Generator Rules Proposed by the NY DEC Proposed by the NY DEC � The NYS Dept. of Environmental Conservation (DEC) has drafted rules (Part 222.1) that address environmental restrictions on the use of emergency generators in demand response programs. � Draft rules impose limits on MW registration in the NY metropolitan area (roughly Zones H-K) and elsewhere: NYCMA Upstate � January 1, 2007: 271.9 MW 111.4 MW � January 1, 2011: 150.0 MW 100.0 MW � January 1, 2014: 50.0 MW 50.0 MW 30-hour annual limit on use within sponsor demand response � programs (including NYISO, NYPA, LIPA and Con Ed) 11
Characteristics of DG in NY Characteristics of DG in NY Demand Response Programs Demand Response Programs � To better understand emergency generator participation in EDRP/SCR, the NYISO surveyed CSPs/RIPs in summer 2006 � 11 sponsoring organizations responded to survey (out of 36 registered) � 246 sources reported � 96 sources surveyed are known to be generators in NYISO records (39%) – 57.8 MW of ICAP � 150 sources surveyed are not listed as generators in NYISO records (61%) – 26.8 MW of ICAP 12
Generator Type Generator Type Generator Ty pe, A ll Reported Units Generator Ty pe, Units Subject to 222 3 2 2 0 4 3 9 3 3 9 78 225 IC engine lean-burn IC engine (>= 1% O 2 exhaust) IC engine lean-burn IC engine (>= 1% O 2 exhaust) turbine m icroturbine (less than or equal to 250 kW ) turbine m icroturbine (less than or equal to 250 kW ) other (specify) no generator type specified other (specify) no generator type specified � Most smaller units are either IC engines or microturbines 13
Fuel Type Fuel Type Fuel Type, A ll Reported Units Fuel Ty pe, Units Subject to 222 10 2 63 0 75 2 51 0 32 106 diesel natural gas biogas other (specify) no fuel type specified diesel natural gas biogas other (specify ) no fuel ty pe specified 5 units regularly use low-sulfur fuel and are 3 units regularly use low-sulfur fuel and are equipped with a particulate control device equipped with a particulate control device Predominant fuel for all reported units is natural gas; for units that would be subject to Part 222, predominant fuel is diesel 14
10 15 20 25 30 35 40 0 5 Model Year and Run Hours 1966 Model Year and Run Hours 1968 1970 1972 1974 1976 1978 1980 M odel Year (n=100) 1982 1984 Y ear 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 10 20 30 40 50 60 0 0 400 800 1200 1600 2000 Run Hours / Year (n=100) 2400 2800 3200 Hours 3600 4000 4400 4800 5200 5600 6000 6400 15 6800 7200
NOx Emissions Rate Survey Results NOx Emissions Rate Survey Results NO x Em ission Rate (n=183) NO x Rate, Units Subject to 222 (n=73) 40 40 35 35 30 30 25 25 20 20 15 15 10 10 5 5 0 0 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 lbs /MWh lbs/MW h � Significant difference in mean values (34.7 lb/MWh for all units reported, 19.1 lb/MWh for units subject to Part 222) 16
PM Emissions Rate Survey Results PM Emissions Rate Survey Results PM Em ission Rate (n=182) PM Rate, Units Subject to 222 (n=72) 90 90 80 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 0 0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45 0.5 0.55 0.6 0.65 0.7 0.75 0.8 0.85 0.9 0.95 1 0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45 0.5 0.55 0.6 0.65 0.7 0.75 0.8 0.85 0.9 0.95 1 PPM PPM � Smaller, gas-fired units emit very little PM 17
NYISO Installed Capacity NYISO Installed Capacity Market Market
ICAP Markets in New York ICAP Markets in New York � ICAP Requirements are set for the upcoming capability year � Load serving entities can meet their ICAP requirements by: � Self-Supply � Bilateral Transactions with Suppliers � Forward Auctions � Deficiency/Spot Market Auctions � After-the-fact penalty procurement 19
Locational ICAP Locational ICAP � Due to transmission constraints into certain localities, areas or zones, some LSE’s must procure at least some of their ICAP requirements from resources electrically located within that locality � New York (NY) has had locational requirements since inception. There are two such transmission constrained zones: • New York City and • Long Island 20
Demand Curve - - NYISO Objectives NYISO Objectives Demand Curve � Improve the traditional ICAP market � Increase system reliability by valuing additional ICAP above the NYCA and Locational Requirements � Reduce price volatility and send a more stable revenue signal for new resources � Continue to ensure a competitive, fair, and non-discriminatory market for capacity in the NYCA 21
Demand Curve Spot Market Auction Demand Curve Spot Market Auction � Replaced previous Deficiency Auctions � Uses a Demand Curve as a proxy for LSE Bids � The Demand Curves are based on the cost of new entry, with decreasing prices for ICAP above the NYCA or Locational Requirements � Conversely, the Demand Curve increases prices/value for ICAP when resources are short of the NYCA or Locational Requirements � Resources have the opportunity to supply ICAP above the NYCA and/or Locational ICAP Requirements � Reduces stranded capacity 22
Current NY ICAP Initiatives Current NY ICAP Initiatives � If accepted by FERC, implement mitigation rules for NYC divested generators � Update demand curve parameters � Expand ICAP Automation software � Investigate need for and approaches to a forward capacity market � Reflect FERC’s deliverability requirement in the ICAP market once the FERC accepts the NYISO proposal 23
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