Operating Reserves Educational Session Part B

Transcription

1 Operating Reserves Educational Session Part B Energy Market Uplift Senior Task Force September 17, 2013 Joseph Bowring Joel Romero Luna

2 Operating Reserves Operating reserves can be grouped into five categories: Day-Ahead Balancing Reactive Services Black Start Services Synchronous Condensing

3 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Millions (average per day) Day-Ahead Charges $1.2 $1.0 Day-Ahead Operating Reserves Unallocated Congestion $0.8 $0.6 $0.4 $0.2 $

4 Day-Ahead Charges Total Day-Ahead Operating Reserve Charges from Jan 2009 Jun 2013: $462 million From Day-Ahead Operating Reserve Credits (Not Black Start or Reactive): $442 million (96% of all DA OR Charges) From Unallocated Congestion: $20 million (4% of all DA OR Charges) o 67% or $14 million since Jan

5 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Share of Credits Day-Ahead Credits Concentration 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Top 10: 69% Others: 31% Top 10 All Others

6 Day-Ahead Allocation Recap Charges are paid by: Day-Ahead Demand Bids (Load) Day-Ahead Exports Day-Ahead Decrement Bids (DECs) Charges are allocated across the entire RTO. Each transaction pays the same rate per day across the entire system

7 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 GWh Basis for Day-Ahead Allocation 800, , , month Rollling Total Decrement Bids 12-month Rollling Total Day-Ahead Exports 12-month Rollling Total Day-Ahead Demand 500, , , , ,

8 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 $ per MWh Day-Ahead Rate Day-Ahead Rate Monthly Average Day-Ahead Rate

9 $ per MWh Day-Ahead Rate Day-Ahead Rate Day-Ahead Rate (Excluding 13-Sep-2012 through 30-Nov-2012) Day-Ahead Rates (Excluding 13-Sep- Statistic Day-Ahead Rates 2012 through 30-Nov- Average Min Max St Dev % 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

10 Operating Reserves Operating reserves can be grouped into five categories: Day-Ahead Balancing Reactive Services Black Start Services Synchronous Condensing

11 Balancing Charges Balancing operating reserves: Balancing (make whole) Reliability o RTO, East or West Deviations o RTO, East or West Lost Opportunity Cost (LOC) Canceled Resources

12 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Millions (average per day) Balancing Charges $2.5 $2.0 Balancing Operating Reserve (Make Whole) Lost Opportunity Cost Canceled Resources $1.5 $1.0 $0.5 $

13 Balancing (BOR) Charges Total BOR Charges from Jan 2009 Jun 2013: $1,786 million From BOR Credits (make whole): $1,211 million (68% of all BOR Charges) From LOC: $555 million (31% of all BOR Charges) From Canceled Resources: $20 million (1% of all BOR Charges) o $0.3 million after Jun-2012 (wind LOC Rule): Before wind LOC rule, LOC paid to wind units was categorized as canceled resources

14 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Share of Credits 100% Balancing (Make Whole) Credits Concentration 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Top 10: 53% Others: 47% Top 10 All Others

15 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Millions (average per day) Balancing Charges $2.5 $2.0 Reliability Deviations Reliability: 28% Deviations: 72% $1.5 $1.0 $0.5 $

16 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Millions (average per day) Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Millions (average per day) Balancing Charges $2.0 $1.5 $1.0 RTO Reliability East Reliability West Reliability $0.5 $0.0 $2.0 $1.5 $1.0 RTO Deviations East Deviations West Deviations $0.5 $

17 Balancing Charges Allocation Allocation Jan Nov 2012 Dec Jun 2013 Reliability Charges $306 $31 RTO Share 39% 74% East Share 22% 23% West Share 39% 3% Deviation Charges $700 $173 RTO Share 82% 34% East Share 13% 63% West Share 4% 3%

18 Balancing Allocation Recap Reliability charges are paid by: Real-time Load Real-time Exports Reliability charges are allocated by region (RTO, East or West) Deviation charges are paid by: Real-time deviations from day-ahead position Deviations from desired output (units and DR) Deviation charges are allocated by region (RTO, East or West)

19 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 GWh RTO Deviations 200, , , , , ,000 80,000 60,000 40,000 20, month Rollling Total Demand Deviations 12-month Rollling Total Generators Deviations 12-month Rollling Total Supply Deviations 12-month Rollling Total Deviations

20 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 GWh 60,000 RTO Demand Deviations 12-month Rolling Totals 50,000 40,000 30,000 20,000 10,000 0 IBT Sale Only DEC Only Export Only Load Only Financial Combination with DEC Physical Combination with DEC Combination without DEC

21 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 GWh 25,000 RTO Supply Deviations 12-month Rolling Totals 20,000 15,000 10,000 5,000 0 IBT Purchase Only Import Only INC Only Import with INC IBT Purchase with INC Import with IBT Purchase

22 Balancing Rates Jan Nov 2012 Statistics RTO Reliability East West RTO Deviation East West Average Minimum Maximum Standard Deviation Dec Jun 2013 Statistics RTO Reliability East West RTO Deviation East West Average Minimum Maximum Standard Deviation Reliability Deviation Average Rates RTO East West RTO East West Jan Nov Dec Jun Difference 0.01 (0.01) (0.09) (0.04) Percentage 28% (29%) (96%) (5%) 1,122% 22%

23 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 $ per MWh RTO Reliability Rate RTO Reliability Rate Monthly Average RTO Reliability Rate

24 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 $ per MWh East Reliability Rate East Reliability Rate Monthly Average East Reliability Rate

25 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 $ per MWh West Reliability Rate West Reliability Rate Monthly Average West Reliability Rate

26 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 $ per MWh RTO Deviation Rate RTO Deviation Rate Monthly Average RTO Deviation Rate

27 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 $ per MWh East Deviation Rate East Deviation Rate Monthly Average East Deviation Rate

28 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 $ per MWh West Deviation Rate West Deviation Rate Monthly Average West Deviation Rate

29 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Millions (average per day) Lost Opportunity Cost $2.5 $2.0 Balancing Operating Reserve (Uplift) Lost Opportunity Cost Canceled Resources $1.5 $1.0 $0.5 $

30 Lost Opportunity Cost Recap LOC is paid to units when: Combustion turbine or diesel scheduled DA not called in RT. For purposes of this presentation, labeled as DA LOC. Units reduced in real-time. For purposes of this presentation, labeled as RT LOC. LOC is paid by RTO deviations. Currently PJM posts one RTO Deviation Rate which combines the RTO Deviation Charges and the LOC Charges

31 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Millions (average per day) Lost Opportunity Cost $1.0 $0.9 DA LOC RT LOC $0.8 $0.7 $0.6 $0.5 $0.4 $0.3 $0.2 $0.1 $

32 Lost Opportunity Cost LOC from Oct-2011 through Jun-2013: $253 million Oct-2011: LOC calculations in settlement software were corrected to take into account higher of price vs. cost offer rule. DA LOC: $214 million (84%) RT LOC: $40 million (16%)

33 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 $ per MWh LOC Rate LOC Rate Monthly Average LOC Rate

34 $ per MWh LOC Rate Rate 95 Percentile Median 5 Percentile Statistics LOC Rate ($/MWh) Average 0.98 Minimum 0.00 Maximum Standard Deviation % 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

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