Request for Information Non-emitting Resources Webinar and - - PowerPoint PPT Presentation

Request for Information – Non-emitting Resources

December 21, 2017 Webinar and information session

• This presentation outlines the Non-Emitting Resource

Request for Information (RFI) and how it interacts with Market Renewal and the work of the Non-Emitting Resource Subcommittee (NER-SC).

• The presentation provides detail on:

– Background and update on Market Renewal – The MRWG and NER-SC roles – Alignment between the RFI and the MRWG and NER-SC – The roll-out and processes related to the RFI – Initial outline of the type of questions anticipated in the RFI

Agenda

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Market Renewal Background

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• Market Renewal is the most ambitious set of enhancements to

Ontario’s electricity market design since our market opened in

• 2002. It will:

– Address known issues with our existing design and deliver ratepayer value by meeting system needs more cost- effectively. – Deliver a market place that will send transparent price signals to meet different system needs.

• Market Renewal will put in place a foundation to manage a

range of potential energy futures driven by decentralisation, digitisation and decarbonisation

What is Market Renewal?

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The IESO has worked closely with stakeholders to develop an agreed upon mission and set of principles for Market Renewal

MRP Mission and Guiding Principles

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Mission

• Market Renewal is setting the foundation for the future market

where all streams together will provide incentives for existing and new resources, rather than one single tool or program

Market Renewal initiatives

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Work Stream Primary Objective Initiatives

Energy

Reduce cost and gain efficiency scheduling energy to meet provincial demand

• Single Schedule Market (SSM)
• Day-Ahead Market (DAM)
• Enhanced Real-Time Unit

Commitment (ERTUC)

Capacity

Reduce cost of procuring resources to meet long-term demand

• Capacity Trade (CT)
• Incremental Capacity Auction

(ICA)

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Stakeholder engagement structure

Substantial consensus

• Making progress on SSM and ICA design options and decisions but time remains for

analysis and discussion before final decisions are made

• The capacity export and enabling system flexibility engagements have also been

integrated into Market Renewal to ensure a cohesive approach across initiatives

Market Renewal Status Update

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The Future Market

• Building on the foundation set by Market Renewal, all resources

should have the opportunity to compete, and will earn more or less revenue depending upon how they can meet what the system needs

Market Renewal

Decentralisation Decarbonisation Digitisation

Future Market

The Future Market and Clean Energy Policy

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• Market Renewal can work seamlessly with additional market

mechanisms to support low carbon resources

• Competitive market-based mechanisms will ensure these policy goals

are met in the most cost-effective and innovative manner

⁻ Like Cap and Trade, there is an opportunity to create greater harmonisation with

• ther markets to allow for trading

Cap and Trade REC Market RPS Policy Clean Energy Auctions Tax Credits Other options TBD

Cap and Trade is an efficient mechanism to meet carbon

• goals. Many other

mechanisms can be explored to work alongside cap and trade and market renewal.

Defining the Market Renewal Program

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Market Renewal Program The Future Market

Capacity Auction Single Schedule, Day-Ahead Market, Real-time Unit Commitment Intertie Scheduling & Permanent Flexibility Product (TBD) DR Auction Enhancements & Capacity Exports Interim Flexibility/ Capacity Product Energy Market Flexibility & Ancillary Services Environmental Attributes Market Evolved Roles for DER/LDC Other Market- based Products MRP lays the foundation for a renewed Market ; without these changes, IESO will continue to have to use inefficient tools to adapt to changes and implement policy Important and strategic opportunities for IESO to advance and renew the entire market and sector, but not part of the current scope for the Market Renewal Program These mechanisms will likely have to continue to be enhanced even after MRP is done to keep pace with the changes in the sector Operating Reserve Changes

Initiatives in advance

• f MRP

Market Renewal Working Group and Non-Emitting Resources Subcommittee

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• The MRWG works alongside the IESO to ensure that

initiatives identified under market renewal are progressing

Role of the MRWG

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• Ensure that the initiatives are developed, designed, and

implemented in an effective and timely manner

Project delivery

• Provide advice and guidance on issues that may arise

through market renewal engagement initiatives

Expertise

• Help address strategic and seams issues associated with

design changes and implementation proposals

Issue resolution

• Help ensure effective coordination and integration of

market renewal engagements and Work-streams

Coordination

• Assist with communicating developments and issues to

stakeholders and other interested parties to help support transparency

Communication

Relationship between MRWG and NER-SC

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MRWG

(Strategic discussions)

NER-SC

(Technical discussions)

Scope Research / Analysis

Feedback

NER-SC work will be brought back to MRWG for their consideration and feedback

Scope management

The MRWG will support the work of the NER-SC by providing a scope for research and discussion around non-emitting resources

Technical knowledge

The NER-SC will provide the technical expertise needed to help inform strategic discussions on Market Renewal at the MRWG

Participation will look at the future integration and barriers to participation for non-emitting resources in the proposed Market Renewal design scope

Participation

Market Efficiencies will look at market impacts associated with higher levels of non-emitting resources with very low to zero marginal costs

Market Efficiencies

Commercial Mechanisms will look at the pros and cons as well as the potential need for additional incentive mechanisms to value environmental attributes and support net zero / low carbon emission facilities

Commercial Mechanisms

NER-SC Scope and objectives

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The Non-Emitting Resource Subcommittee will: 1. Ensure the unique characteristics of non-emitting resources are appropriately reflected in the Market Renewal design 2. Begin to identify how Ontario can build upon the foundation established by Market Renewal to prepare for the system of the future The NER-SC scope of work falls into three main categories:

RFI and NER-SC Alignment

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• Phase 1 of the RFI is intended to support the work of the NER-SC; Phase 2 will inform the

next steps that follow from the work of the NER-SC

• The timelines below are approximate; the information requested and timelines for each

phase will be finalized with stakeholder input

2019

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Q1

NER-SC - Phase 1 NER-SC - Phase 2 NER-SC - Phase 2 RFI - Phase 1 Activities RFI - Phase 2 Activities RFI Milestones

Q1 Q2 Q3 Q4

Participation Market Efficiencies Incentive Mechanisms

Technical conference NER-SC Report to MRWG

Initial Technical Component Detailed Technical, Project, Costing component

Phase 1 submission deadline

IESO response to phase 1 submissions

Phase 2 submission deadline IESO response to phase 2 submissions

NER-SC Milestones

Issue Phase 1 of RFI - Target week coomencing 29 Jan Issue Phase 2 of RFI

Non-Emitting Resources RFI

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• The Request for Information (RFI) will inform the IESO on a broad

level, and in specific support Market Renewal and the work of the Non-Emitting Resource Subcommittee (NER-SC)

• The RFI will provide information on new projects and upgrades to

existing resources with a focus on the potential technical and commercial aspects and how they will participate in the market to help meet present and future system needs

• The aim is to establish a two phase RFI and conclude the process

within a year

– Phase 1 supports the Market Renewal Program – Phase 2 focuses on the broader considerations of non-emitting resources

Request for Information (RFI) Objectives

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• Phase 1 will focus on supporting Market Renewal by gathering

information from non-emitting projects at various stages of development to understand

– the products and services they can provide – and the potential barriers to their participation in the market

• Requested information will include, but not be limited to:

– Project information and operating characteristics – What electricity products and services can/could your asset provide? – What technical considerations need to be taken into account in order to deliver identified products and services? – From an operations perspective how do you see your asset participating in the renewed market design (e.g., day ahead and real time energy, capacity, and other essential reliability and operability services)? – Are there identified/potential barriers to your participation in the market design being contemplated?

• Phase 1 expected to be launched in February 2018

RFI Phase 1 – Market-based Information

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• What market products and services (energy, capacity, ancillary services,

flexibility etc.) can your project provide?

– Baseload energy – Load following energy – Quick start, fast ramping energy – Firm capacity and for what duration – Ancillary services

• What additional services could your project provide?
• What technical specifications are unique to your project?
• If your project can provide multiple products and services, what
• perational factors should be taken into account.
• Are their potential changes that would enable your project to provide

additional products and services e.g. technology upgrades, partnering with

• ther assets, incorporation of new technologies, reconfiguration of an

existing asset etc.?

Sample Questions for Phase 1

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• Phase 2 will focus on gathering more detailed project information

including indicative costing information and additional details as may be identified through Phase 1 and the work of the NER-SC.

• Requested information will include, but not be limited to:

– Development/construction information, including siting, timelines, regulatory requirements, such as permitting – Financial and commercial considerations – Indicative, non-binding project capital and operating costs – Additional information on other potential services (i.e. distribution level services etc.) that could be provided

• Phase 2 is expected to be launched in August/September 2018
• Sample questions will be stakeholdered in advance of posting the

Phase 2 RFI.

RFI Phase 2 – Technical and Costing Information

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Anticipated RFI Timelines

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RFI – Phase 1 RFI – Phase 2 February 2018 - Issue RFI Phase 1 August/September 2018 – Issue RFI Phase 2 March 2018 - NER-SC technical conference September 2018 - NER-SC report to MRWG April/May 2018 - Phase 1 RFI submissions due December 2018 - Phase 2 RFI submissions due July/August 2018 – Conclusion of Phase 1 Early 2019 – Conclusion of Phase 2 Please note that dates are subject to stakeholder input and therefore subject to change

RFI – Process Overview

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Conclusion of Process

IESO will report publicly on the information that was received under the RFI

RFI Submission Deadline

Interested parties are invited to provide responses to RFI

Deadline for Issuing Addenda

If questions raised identify need for addenda

Question and Comment Period(s)

One or more question and comment period(s) held during RFI posting period

RFI Document Posting

Document posted on dedicated IESO site

In the meantime, interested parties are encouraged to subscribe to updates regarding the Non-Emitting Resources RFI by emailing engagement@ieso.ca and requesting to be added to the mailing list

RFI Engagement and Communications

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Stakeholdering

• Engagement will

leverage NERSC but also include additional touchpoints specific to the RFI

• Potential Webinar
• Question/Comment

periods

Dedicated Webpage

• Non-emitting

Resources RFI page

• n IESO website
• Will contain

updates and RFI resources

Email Address

• Single point of

communication with IESO’s RFI team for stakeholders and interested parties

• IESO will leverage the NERSC forum to further advance conversations

with stakeholders

• It is anticipated that the IESO will have some additional focused

engagement with the sector in advance of issuing the RFI in February

• In the meantime, the IESO wants to hear from you on the proposed

approach and content for the RFI. In specific, please provide feedback

• n:

– Phasing of the process – Information requested under each phase – Timeline – Engagement approach

• Feedback to be submitted to engagement@ieso.ca and is due January

10, 2018

Next Steps

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