Transcript No Slide Title

New York Congestion Costs
Experience and Plans
FERC Offices
April 14, 2005
James Mitsche
PowerGEM
Power Grid Engineering & Markets
[email protected]
1
Meeting Topics
• Congestion
– It’s Nature
– Analysis Tools
– NYISO Activities
• NYISO Congestion Analysis
–
–
–
–
Congestion Measures
Congestion Analysis Approach
Historic Congestion Results
Sensitivity Studies
• Congestion Planning
• PowerGEM Observations
PowerGEM
Power Grid Engineering & Markets
2
Remember
• Numbers
– Average 4 Simultaneous Constraints Every Hour in NY
– NY Congestion Impact: 2003 = $85 Million; 2004 = $72 Million
• Observations from a Planning Perspective
–
–
–
–
Congestion Occurs at All Load Levels
Most Congestion Impact is Due To Chronic Events, Not Price Spikes
Bottleneck Relief Is Not as Cost Effective as Generally Believed
Analysis of Large Persistent Transmission Constraints is Reasonable
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3
Congestion
• The Cost of Committing or Running Generating
Units Out of Merit Order
• Caused By Combination of
– Insufficient Transmission, Requiring Local More
Expensive Supply to Maintain Load/Generation Balance
– Generator Characteristics (e.g. min run time, ramp rate,
unit MW minimum)
• Unit Commitment Process Commits/Decommits Units to
Minimize BPC, but Increases Congestion
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4
Nature of Congestion Cost
New York 2004 Statewide $ Congestion Impact / MW
at Hourly Load Level
NY $ BPC Change Congestion
Impact / MW (Inefficiency Measure)
$10
Congestion is:
$9
$8
Persistent
$7
$6
Usually Not Dramatic
$5
$4
At All Load Levels
$3
$2
$1
$0
12000
17000
22000
27000
NY System Load
New York 2004
Average $0.59 / MW
New York 2004
Congestion Impact
$ / MW Range
= $0.00
$0.00 to $1.00
$1.00 to $2.00
$2.00 to $3.00
$3.00 to $4.00
$4.00 to $5.00
$5.00 to $6.00
$6.00 to $7.00
$7.00 to $8.00
> $8.00
% Hours
0.0%
84.2%
9.7%
2.2%
1.4%
1.0%
0.7%
0.4%
0.2%
0.1%
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Power Grid Engineering & Markets
% Congestion
Impact
0.0%
79.4%
14.2%
2.2%
1.1%
0.9%
1.1%
0.6%
0.1%
0.4%
Load Level Range
12,000 to 13,000
13,000 to 14,000
14,000 to 15,000
15,000 to 16,000
16,000 to 17,000
17,000 to 18,000
18,000 to 19,000
19,000 to 20,000
20,000 to 21,000
21,000 to 22,000
22,000 to 23,000
23,000 to 24,000
24,000 to 25,000
25,000 to 26,000
26,000 to 27,000
27,000 to 28,000
28,000 to 29,000
% Hours
6.9%
9.1%
9.4%
10.1%
8.8%
11.8%
12.6%
11.1%
7.8%
4.8%
3.8%
2.2%
1.2%
0.3%
0.1%
0.0%
0.0%
% Congestion
Impact
1.4%
2.2%
3.3%
5.1%
5.0%
8.8%
11.7%
15.4%
14.9%
10.1%
10.0%
6.6%
3.4%
1.4%
0.5%
0.2%
0.0%
5
How Often are There Simultaneous
Transmission Constraints?
New York 2004 Average Simultaneous Constraints
by Day-of-the-Week
Answer:
Average # of Simultaneous Constraints
Almost Always
Average for NY 4.25, Max 13 in 2004
New York 2004
4.0
3.0
2.0
1.0
0.0
Sun
PowerGEM
Power Grid Engineering & Markets
Mon
Tue
Wed
Thu
Fri
Sat
New York 2004 Average Simultaneous Constraints
by Hour-of-the-Day
6.0
5.0
4.0
3.0
2.0
1.0
0.0
00
:0
01 0
:0
02 0
:0
03 0
:0
04 0
:0
05 0
:0
06 0
:0
07 0
:0
08 0
:0
09 0
:0
10 0
:0
11 0
:0
12 0
:0
13 0
:0
14 0
:0
15 0
:0
16 0
:0
17 0
:0
18 0
:0
19 0
:0
20 0
:0
21 0
:0
22 0
:0
23 0
:0
0
% of Annual
% of Hours Congestion
Impact
5.8%
0.7%
9.5%
2.2%
10.6%
3.8%
11.2%
9.7%
17.4%
22.3%
18.2%
25.8%
10.9%
12.0%
6.6%
7.8%
4.4%
5.9%
3.0%
5.1%
1.4%
2.4%
0.8%
1.6%
0.3%
0.6%
0.0%
0.1%
0.0%
0.0%
Average # of Simultaneous Constraintrs
Number of
Simultaneous
Constraints
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
5.0
6
New York 2004
Congestion Impact by Day-of-the-Week
Sat, 9%
Sun, 7%
Mon, 15%
Fri, 18%
Tue, 14%
Thu, 20%
Wed, 16%
Congestion Is an Everyday Thing
Bid Production Cost Impact
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7
8%
7%
6%
5%
4%
3%
2%
1%
0%
00
:0
01 0
:0
02 0
:0
03 0
:0
04 0
:0
05 0
:0
06 0
:0
07 0
:0
08 0
:0
09 0
:0
10 0
:0
11 0
:0
12 0
:0
13 0
:0
14 0
:0
15 0
:0
16 0
:0
17 0
:0
18 0
:0
19 0
:0
20 0
:0
21 0
:0
22 0
:0
23 0
:0
0
% of Congestion Impact
New York 2004 Congestion Impact
by Hour-of-the-Day
Congestion Is an Every Hour Thing
Bid Production Cost Impact
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8
What Causes Congestion At Shoulder Load ?
• Unit Commitment Decisions and Restrictions
– Unit Minimums
– Ramp Rates
– Minimum Run Times
• Generation Outages
• Transmission Outages
• Bidding Patterns
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9
Congestion Terms
• Bid Production Cost
– The Total Cost to Serve Demand at the Bid Price (Not Clearing Price)
• Shadow Price
– The Incremental Change in Bid Production Cost for an Incremental
Change in Constrained Facility Rating
• LMP = Shadow Price x Distribution Factor
• LMP Congestion Component
– Difference Between Local and Reference Point LMP (excepting
Losses)
• Distribution Factor
– Change in Constraint Flow for a Change at a Location, Relative to a
Reference Point
• Reference Point
– Assumed Uncongested Location
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10
Congestion Calculation Tools
•
Shadow Prices Result From Optimization Simulations
– Security Constrained Unit Commitment
– Security Constrained Economic Dispatch
•
These Tools Minimize Total Bid Production Cost Subject to Energy
Balance, Flow Limits, and Other Constraints
•
Payments are Made at the LMP Clearing Price, Not the Bid Price
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11
NYISO Congestion Analysis
• NYISO has reported historic congestion costs since 2001
• Included in NYISO Market Advisor's annual "State of the
Market" report
• Electric System Planning Working Group ("ESPWG") was
formed in 2003 to assist in the development of a
Comprehensive Planning Process for the NYISO
• ESPWG efforts have led to a detailed methodology for the
analysis of historic congestion costs
• This process is now included in the NYISO Tariff
(Attachment Y)
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12
ESPWG Objectives
To Better Understand Congestion Costs & Causes
–
–
–
Define congestion
Analyze causes of congestion
Provide better information for the market
–
Consider implications for NYISO Comprehensive Planning Process
Characterize Historic Congestion
–
–
–
Measures & Metrics
Magnitude
Location
•
•
Zones
Constraints
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13
Congestion Measures
• Market Impact Measures
– Change in BPC
– Incremental BPC Impact (Patton Method)
• Payment Impact Measures
– Congestion Payments
– Demand and Supply Payments
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14
New York Congestion Impact Metrics Summary
Metric
Bid Production Cost
2003 Result
$ Millions
$85
Description




Primary Metric
Actual Constrained – Unconstrained
Measures Economic Inefficiency
Societal Impact

Congestion Payments
$821
TCC Hedging
$528
Unhedged Congestion
Payments
$293
Demand Payments
$392
TCC Hedging
$528
Unhedged Demand Payments
-$136
Sum of (Total LMP Change) * (Demand
Affected) w/o Transmission Constraints

Includes Energy Response w/o
Constraints

Bills Impact Measure
TCC MW owned times the LMP difference
between the TCC contract point of withdrawal
(POW) minus point of injection (POI)
Actual Bills Impact After Hedging
Supply Payments
-$136

Sum of (Congestion LMP Change) *
(Demand Affected) w/o Transmission
Constraints

Ignores Energy Change w/o Constraints

Accounting Impact Measure

Power Alert Number
TCC MW owned times the LMP difference
between the TCC contract point of withdrawal
(POW) minus point of injection (POI)

Congestion Payments – TCC Hedging

Accounting Impact Measure



Patton Figure
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$688
Sum of (Total LMP Change) * (Supply
Affected) w/o Transmission Constraints
Includes Energy Response w/o
Constraints
Amount Paid to Suppliers Due to
Congestion
Incremental Bid Production Cost Change
15
David Patton’s 2003 NYISO Markets Report
• Defines Congestion as:
– The difference between total congestion payments from loads and
payments to generators and imports; plus
– Congestion costs collected from physical bilaterals
• Utilizes a “marginal cost” definition:
– “Shadow price” x Power flowing across congested interface
• Includes both Day-Ahead and Real-Time congestion components
• Relative, Not Absolute Measure
• Total for 2003: $688 Million
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16
BPC Congestion Impact and Patton Number
• Both Numbers are Extreme Cases
– BPC Impact Removes All Transmission Constraints (Big Change)
– BPC Represents the Maximum Savings Possible
– Patton Number is for a Small Incremental Change Only
• Better Approach
– BPC Change for Discrete Grid Improvements or Other “What If”
Tests
– It is Believed That Both Methods Should Converge When Looking
at Discrete Situations
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17
Comparison of 2004 Totals By Different Metrics,
Metric
Positive Means
Negative Means
Interpretation of Actual
2004 Result
$ 71.3
Market Inefficiency
Not Possible
Maximum that Can be
Saved (Not Shifted) from
Eliminating Congestion
Demand
Payments
After TCC
Hedging
- $ 181.2
Congestion
Increased Energy
Bills
Congestion
Decreased Energy
Bills
NY State as a Whole
Benefited from Congestion
(Viewed Differently at
Zonal Level)
Supply
Payments
After TCC
Hedging
- $ 181.2
Suppliers
Benefited from
Congestion
Suppliers Were
Paid Less Because
of Congestion
NY Generators as a Whole
Were Hurt by Congestion
(Viewed Differently at
Zonal Level)
$ 316.0
Congestion
Increased this
Component of
Total Energy
Payments
Congestion
Decreased this
Component of Total
Energy Payments
Congestion Was about 3%
of Total NY State Energy
Payments
BPC Change
Unhedged
Congestion
Payments
2004 Total
$ Millions
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18
Congestion Reporting Posting
(www.NYISO.com)
Total and Zonal Congestion Metrics
4 Metrics Mitigated Bids NYCA
4 Metrics Mitigated Bids Zonal
Constrained Quantities
Unconstrained Quantities
Monitored Element Totals
Monitored Element /Contingency Pair
Annual Totals
x
x
x
x
Monthly Totals Daily Totals
x
x
x
x
Annual Totals
x
Monthly Totals Daily Totals
x
x
Congestion Payments By Constraint
A
B
Monitored Element Totals
Monitored Element /Contingency Pair
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Annual Totals
x
Monthly Totals Daily Totals
x
x
19
Metrics Calculated Using PROBE Software
• PROBE (PoRtfolio Ownership Bid Evaluation) Software
– A “Study Mode” for the NYISO SCUC
– Day Ahead Market Only
– Driven by Same Data as the SCUC
• Bids (real and virtual, load and generation), Hourly Network Models, Business Rules, TCC
– Market Optimization
• All Markets (Generation, Price Capped Load, Virtual Load & Generation, Imports, Exports,
Wheels, Ancillary Service)
• Full Security Constrained Unit Commitment and Dispatch
• Includes Mitigation
• Produces Same Hourly Results as SCUC (LMP’s, dispatch, flows, etc.) + Insights
– 2 Modes
• SCUC Viewer
• Simulation
•
•
•
Used Since January 2002
NYISO Market Monitoring & Performance Unit Uses Routinely
Used for Daily PJM Market Advice and Economic Planning
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20
Simulation Tool
NYISO Supplied Daily
Hourly Network Models (24)
User Controls
Generator Bids
•Ramp Rate Handling
Virtual Load & Gen Bids
•Bids to Optimize
Imports & Export Bids
•PAR Handling
Fixed Load & Price Capped
Load Bids
Daily Security Constrained Unit
Commitment
Daily Security Constrained
Dispatch
Shadow Prices & LMP’s
Energy & Congestion $ for All Bid
Types
•Generators
•Fixed Load
Unit Characteristics (Status, Min Up &
Down Time, Ramp Rates)
PAR Settings
•Price Capped Load
PROBE
•Virtuals
•Imports & Exports
Relatively
Static or
Derived
Data
Monitored Branches,
Interfaces Limits,
Contingencies
TCC Contracts
Excel
Spreadsheets
Branch Flows
Marginal Bids
Zonal Factors
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Congestion Impact on Bidders
21
Important Assumptions
•
The Congestion Impact Calculation is the Difference of the “As Given”
Network and a Totally Unconstrained System. Removing All Constraints is
Not Truly Practical, but Quantifies the Maximum Possible Savings
•
Bids are Assumed to Be Mitigated and Unchanged for All Calculations
•
Bilateral Market Hedging is Not Included
•
TCC Hedging Attributed Totally to Load. No Inclusion of TCC Auction Cost
•
Virtual Load, Virtual Generation, and Price Capped Load Assumed to be
Fixed MWHr in the Unconstrained Case ($ Payments Change)
•
No Adjustment for “Unusual Events”
•
PAR’s Fixed at SCUC Supplied Setting
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22
SCUC – PROBE Results Comparison
Revenue SCUC - PROBE Difference
New York Generation
Price Capped Load
Imports
Exports
15-Jul
-1.1%
-1.7%
-0.6%
-0.5%
22-Sep
-0.7%
-2.9%
11.8%
-0.1%
3-Dec
0.5%
0.6%
-1.4%
0.9%
12-Dec
0.1%
0.6%
-0.8%
0.6%
15-Dec
-1.6%
0.4%
-3.9%
-2.5%
18-Dec
0.2%
2.8%
-0.1%
0.7%
19-Dec
0.4%
1.8%
-2.4%
2.9%
Mitigated Bid Production Cost SCUC - PROBE Difference
Generation & Imports
-1.5%
-0.3%
-1.7%
-0.5%
2.6%
-1.2%
-1.0%
Grayed Areas are Differences >2%
Note: Sept. 22 Imports were very small (5% of Gen+import Revenue); a small
SCUC/PROBE difference results in a larger than normal % difference. All dates
in 2003
Conclusion: Overall Revenue and Bid Production Cost is
Being Reproduced by PROBE With Acceptable Precision
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23
2003 & 2004 Summary
New York Congestion Impact
(Bid Production Cost Impact)
Congestion Impact in $ Millions
$90
$84.6
$80
$71.7
$70
$60
$50
$40
$30
$20
$10
$0
2003
PowerGEM
Power Grid Engineering & Markets
2004
24
2003 & 2004 Summary
Comparative Cumulative Congestion -- BPC impact
$90
$ Millions
$60
$30
$0
1/1
4/1
7/1
2003
10/1
2004
2003 vs 2004 Unhedged Congestion Payments by Constraint
PLSNTVLY 345 LEEDS___ 345 1
VALLYSTR 138 EGRDNCTY 138 1
W49TH_ST 345 SPRNBRK_ 345 1 or 2
E179THST 138 HELLGT_E 138 1
UPNY CONED
RAINEY__ 345 DUNWODIE 345 1 or 2
2004
2003
LEEDS___ 345 N.SCTLND 345 1
RAINEY__ 138 VERNON__ 138 1
CENTRAL EAST - VC
DUNWODIE 345 SHORE_RD 345 1
0%
5%
10%
15%
20%
25%
30%
% of Annual Total Positive Congestion Impact
PowerGEM
Power Grid Engineering & Markets
Not all Constraints Shown. 95% of 2003, 90% 0f 2004
25
- Number Means Congestion
Decreases Load Payments
2003 Totals
Negative Number
Means Gen Payments
Congestion Hurt Gens
2003 Total Congestion Impact Mitigated Bids ($ Millions)
Zone
CAPITL
CENTRL
DUNWOD
GENESE
HQ
HUDVL
LONGIL
MHKVL
MILLWD
N.Y.C.
NORTH
NPX
OH
PJM
WEST
NYCA Total
BPC mitig
Unhedged Cong
-$6.10
-$39.70
$0.00
-$2.51
-$43.97
-$25.57
$95.70
-$7.82
-$0.14
$230.19
$0.39
-$5.52
-$13.21
-$79.46
-$17.74
$84.55
$5.66
-$2.88
$6.39
$1.24
$2.17
-$13.32
$135.98
-$2.30
-$10.22
$163.48
$2.60
$1.85
$0.17
$6.75
-$4.13
$293.43
Gener pay
-$20.64
-$124.88
-$0.42
-$18.02
-$51.17
-$59.62
$177.42
-$16.97
-$45.26
$319.96
-$29.93
-$10.19
-$37.23
-$123.67
-$95.52
-$136.12
Unhedged load pay
-$20.64
-$124.88
-$0.42
-$18.02
-$51.17
-$59.62
$177.42
-$16.97
-$45.26
$319.96
-$29.93
-$10.19
-$37.23
-$123.67
-$95.52
-$136.12
+ Number Means Congestion
Increases Supplier Production Cost
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+ Number Means Congestion
Increases Load Cost
26
2003 Totals
Unhedged Congestion Impact by Constraint
(Price Increasing Impact only)
Monitored Facility
DUNWODIE 345 SHORE_RD 345 1
CENTRAL EAST - VC
RAINEY__ 138 VERNON__ 138 1
LEEDS___ 345 N.SCTLND 345 1
RAINEY__ 345 DUNWODIE 345 1
RAINEY__ 345 DUNWODIE 345 2
UPNY CONED
E179THST 138 HELLGT_E 138 1
W49TH_ST 345 SPRNBRK_ 345 1
VALLYSTR 138 EGRDNCTY 138 1
W49TH_ST 345 SPRNBRK_ 345 2
PLSNTVLY 345 LEEDS___ 345 1
JAMAICA_ 138 VALLYSTR 138 1
FRESHKLS 138 WILLWBRK 138 1
VERNON__ 138 KENTAVE_ 138 1
ROSLYN__ 138 EGRDNCTY 138 1
HELLGATE 138 E179THST 138 1
BUCHAN_N 345 EASTVIEW 345 1
NEWBRDGE 138 EGRDNCTY 138 1
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% of Total Cum % of Total
26.5%
26.5%
19.5%
46.0%
16.1%
62.1%
11.2%
73.3%
8.0%
81.3%
3.7%
85.0%
3.6%
88.6%
3.1%
91.7%
1.7%
93.4%
1.4%
94.8%
1.4%
96.1%
0.8%
96.9%
0.5%
97.5%
0.5%
98.0%
0.3%
98.3%
0.2%
98.5%
0.2%
98.7%
0.2%
98.9%
0.2%
99.0%
27
- Number Means Congestion
Decreases Load Payments
2004 Totals
Negative Number
Means Gen Payments
Congestion Hurt Gens
2004 Total Congestion Impact Mitigated Bids ($ Millions)
Zone
CAPITL
CENTRL
DUNWOD
GENESE
HQ
HUDVL
LONGIL
MHKVL
MILLWD
N.Y.C.
NORTH
NPX
OH
PJM
WEST
NYCA Total
BPC mitig
-$23.12
-$50.75
$0.00
-$1.93
-$30.40
-$19.58
$118.69
-$4.75
-$0.03
$187.86
$0.06
-$13.28
-$11.48
-$66.01
-$13.56
$71.73
Unhedged Cong
Gener pay
$3.37
-$3.11
$9.91
$0.02
-$0.10
-$5.12
$137.81
-$0.95
-$10.68
$187.09
$0.04
$1.08
-$0.11
-$0.51
-$2.71
$316.04
-$46.87
-$132.52
-$1.08
-$18.62
-$31.85
-$71.47
$168.82
-$13.16
-$40.54
$250.48
-$29.02
-$14.05
-$25.95
-$79.14
-$96.21
-$181.18
Unhedged load pay
-$46.87
-$132.52
-$1.08
-$18.62
-$31.85
-$71.47
$168.82
-$13.16
-$40.54
$250.48
-$29.02
-$14.05
-$25.95
-$79.14
-$96.21
-$181.18
+ Number Means Congestion
Increases Supplier Production Cost
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+ Number Means Congestion
Increases Load Cost
28
2004 Totals
Unhedged Congestion Impact by Constraint
Monitored Facility
DUNWODIE 345 SHORE_RD 345 1
RAINEY__ 345 DUNWODIE 345 1 or 2
RAINEY__ 138 VERNON__ 138 1
CENTRAL EAST - VC
PLSNTVLY 345 LEEDS___ 345 1
W49TH_ST 345 SPRNBRK_ 345 1 or 2
UPNY CONED
VALLYSTR 138 EGRDNCTY 138 1
SHORE_RD 345 SHORE_RD 138 1
E13THSTA 345 W49TH_ST 345 1
VERNON__ 138 KENTAVE_ 138 1
SPRNBR49 345 EGRDNCTY 345 1
FRESHKLS 138 WILLWBRK 138 1
E179THST 138 HELLGT_E 138 1
HUDS_AVE 138 JAMAICA_ 138 2
QUENBRDG 138 VERNON__ 138 1
LEEDS___ 345 ATHENS__ 345 1
PLSNTVLY 345 ATHENS__ 345 1
SPR/DUN-SOUTH
NE - NY
MILLWOOD 345 EASTVIEW 345 1
LEEDS___ 345 N.SCTLND 345 1
JAMAICA_ 138 VALLYSTR 138 1
PowerGEM
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%
Cum %
26.4%
26.4%
21.2%
47.7%
15.2%
62.9%
9.5%
72.4%
4.9%
77.3%
4.8%
82.0%
4.8%
86.8%
2.7%
89.5%
2.0%
91.5%
1.3%
92.8%
1.1%
93.9%
0.9%
94.9%
0.7%
95.5%
0.6%
96.1%
0.6%
96.7%
0.5%
97.2%
0.5%
97.8%
0.5%
98.2%
0.4%
98.6%
0.3%
98.9%
0.2%
99.1%
0.0%
99.1%
0.0%
99.1%
29
Congestion Impact By Day
2003 NY Daily Congestion
BPC Impact in $ Millions
$2.5
$2.0
$1.5
$1.0
$0.5
$0.0
1/1
4/1
7/1
10/1
2004 NY Daily Congestion
BPC impact in $ Millions
$2.5
$2.0
$1.5
$1.0
$0.5
$0.0
1/1
4/1
PowerGEM
Power Grid Engineering & Markets
7/1
10/1
30
Observations
•
•
•
•
2004 Congestion Impact Not Dramatically Different than 2003, but is Lower
After a Congested January, Summer 2004 Congestion was Lower then 2003
The Upstate/Imports to Zone J and K Congestion Impact Divide Continues
Individual Constraints 2003 vs 2004
– Consistent
• Dunwoodie – Shore Rd 345
• Rainey – Vernon 138 kV
– Up
• Dunwoodie – Rainey 345
• Pleasant Valley – Leeds 345 kV
• Sprainbrook – 49th Street
– Down
• Central East Interface
PowerGEM
Power Grid Engineering & Markets
31
“Release Constraints in Sequence” Test
Scenario
(Constraints
Ignored for
Next
Scenario) Monitored Element
Contingency
DUNWODIE 345 SHORE_RD 345 1
RAINEY__ 345 DUNWODIE 345 1
Base Case
SCB: SPBK (RS-4): M52 99941
1
DUNWODIE 345 SHORE_RD 345 1
DUNWODIE 345 SHORE_RD 345 1
RAINEY__ 345 DUNWODIE 345 1
W49TH_ST 345 SPRNBRK_ 345 2
E179THST 138 HELLGT_E 138 1
BUS: NORTHPORT 681 UNIT 3
BUS: NORTHPORT 677 UNIT 2
Base Case
SCB: SPBK (RS-4): M52 99941
Base Case
RAINEY__ 345 DUNWODIE 345 1
ROSLYN__ 138 EGRDNCTY 138 1
W49TH_ST 345 SPRNBRK_ 345 1
VALLYSTR 138 EGRDNCTY 138 1
DUNWODIE345_SHORE_RD345_Y50___
SHORE_RD138_GLENWD__138B365___
Base Case
BUS: LAKSUCSS 368 903
CARLPLCE 138 EGRDNCTY 138 1
W49TH_ST 345 SPRNBRK_ 345 1
VALLYSTR 138 EGRDNCTY 138 1
SHORE_RD138_GLENWD__138A366-1_
SPRNBRK_345_W49TH_ST345_M51___
Base Case
4
GLENWDGT 138 ROSLYN__ 138 1
VALLYSTR 138 EGRDNCTY 138 1
SPR/DUN-SOUTH
SHORE_RD138_GLENWD__138B365___
BUS: E F BARRET 292 459 BA
Base Case
5
JAMAICA_ 138 LAKSUCSS 138 1
W49TH_ST 345 SPRNBRK_ 345 1
GLENWD__ 138 SHORE_RD 138 1
DUNWODIE345_SHORE_RD345_Y50___
SCB: DUNW(7): W75 72
SHORE_RD138_GLENWD__138B365___
2
3
Single Day Effect of Sequentially Ignoring
Constraints
$800,000
$600,000
Congestion Impact
Base
$400,000
$200,000
BPC
Payments
$0
-$200,000
-$400,000
-$600,000
-$800,000
0
Base
1
2
3
4
5
Stage of Constraints Ignored
PowerGEM
Assumes No Network Impedance or Connection Change
Power Grid Engineering & Markets
32
Economic Planning Example Using PROBE
May 2004
• Dunwoodie – Shore Rd. 345 kV was 25% of Congestion
Payments
• 2 Tests
– 10% Increase in Dunwoodie – Shore Road Rating
– 600 MW added in Zone K @ $50/MW
Bid Production Cost Savings
May 2004
Total Congestion Impact All Congestion Removed
$5,258,463
Monthly Decrease in Bid Production Cost For
Dunwoodie - Shore Rd. 345 kV Rating Increased 10%
600 MW added to Zone K at $50/MW
$599,442
$14,617,085
PowerGEM
Power Grid Engineering & Markets
33
Handling “Unusual Days” Approach
1.
Use a Statistical Approach to Identify Days with an Unusual
Amount of Congestion Impact
2.
Define Congestion Impact Using the Primary Congestion
Measure
(Constrained – Unconstrained) Mitigated Bid Production Cost
3.
Analyze and Characterize Why the Days Were Unusual
4.
Report Congestion Metrics Separately for “Unusual Days”
PowerGEM
Power Grid Engineering & Markets
34
Unusual Days Part of the Preliminary 2003 Congestion Metrics
New York 2003
Unusual Day Portion of Congestion Metrics
Bid Production Cost Change
99 % Confident Unusual
99% to 95 % Confident Unusual
Not Unusual days
Impact
% of all 2003
$9,703,053
13%
$9,342,245
12%
$58,206,184
75%
Load Payments
99 % Confident Unusual
99% to 95 % Confident Unusual
Not Unusual days
Impact
% of all 2003
$45,490,007
11%
$28,056,635
7%
$342,263,081
82%
Congestion Payments
99 % Confident Unusual
99% to 95 % Confident Unusual
Not Unusual days
Impact
% of all 2003
$97,206,520
10%
$71,247,322
7%
$783,277,256
82%
Generation Payments
99 % Confident Unusual
99% to 95 % Confident Unusual
Not Unusual days
Impact
% of all 2003
$3,060,104
-4%
-$8,817,920
10%
-$81,522,957
93%
PowerGEM
Power Grid Engineering & Markets
35
Economic Planning Thoughts Using PROBE
Everyone Agrees “What if” Studies are Worthwhile
Study Approach Questions
• Analyze All Hours or a Sample?
• Take Out “Unusual Events” in the Base Calculation?
• Solution to Each Problem or Multiple Problems ?
• What about the “Just Submerged” Constraints ?
PowerGEM
Power Grid Engineering & Markets
36
Economic Planning Thoughts Using PROBE
“Cost Effectiveness”
• Measured by the Change in Bid Production Cost with the
Upgrade (Economic Efficiency Improvement)
• Whole State Net Benefit Viewpoint
• 10 Year Planning Horizon
• “Benefit” is Present Worth of Production Cost Improvement
Net of
– Cost of the Transmission Upgrade
– Cost of the Upgrade Outage
PowerGEM
Power Grid Engineering & Markets
37
Chronic Congestion May Be Viewed As:
– All Monitored Elements that contributed to the
top X% of unhedged congestion payments in
2004
80% of Total 2004 Congestion
95% of Total 2004 Congestion
99% of Total 2004 Congestion
DUNWODIE 345 SHORE_RD 345 1
DUNWODIE 345 SHORE_RD 345 1
DUNWODIE 345 SHORE_RD 345 1
RAINEY__ 345 DUNWODIE 345 1 or 2
RAINEY__ 345 DUNWODIE 345 1 or 2
RAINEY__ 345 DUNWODIE 345 1 or 2
RAINEY__ 138 VERNON__ 138 1
RAINEY__ 138 VERNON__ 138 1
RAINEY__ 138 VERNON__ 138 1
CENTRAL EAST - VC
CENTRAL EAST - VC
CENTRAL EAST - VC
PLSNTVLY 345 LEEDS___ 345 1
PLSNTVLY 345 LEEDS___ 345 1
PLSNTVLY 345 LEEDS___ 345 1
W49TH_ST 345 SPRNBRK_ 345 1 or 2
W49TH_ST 345 SPRNBRK_ 345 1 or 2
UPNY CONED
UPNY CONED
VALLYSTR 138 EGRDNCTY 138 1
VALLYSTR 138 EGRDNCTY 138 1
SHORE_RD 345 SHORE_RD 138 1
SHORE_RD 345 SHORE_RD 138 1
E13THSTA 345 W49TH_ST 345 1
E13THSTA 345 W49TH_ST 345 1
VERNON__ 138 KENTAVE_ 138 1
VERNON__ 138 KENTAVE_ 138 1
SPRNBR49 345 EGRDNCTY 345 1
SPRNBR49 345 EGRDNCTY 345 1
FRESHKLS 138 WILLWBRK 138 1
E179THST 138 HELLGT_E 138 1
HUDS_AVE 138 JAMAICA_ 138 2
QUENBRDG 138 VERNON__ 138 1
LEEDS___ 345 ATHENS__ 345 1
PLSNTVLY 345 ATHENS__ 345 1
SPR/DUN-SOUTH
NE - NY
PowerGEM
Power Grid Engineering & Markets
%
26.4%
21.2%
15.2%
9.5%
4.9%
4.8%
4.8%
2.7%
2.0%
1.3%
1.1%
0.9%
0.7%
0.6%
0.6%
0.5%
0.5%
0.5%
0.4%
0.3%
38
PowerGEM Observations
• More Comprehensive Calculation Significantly Lowers
Congestion Impacts
– Cost Shifting Rather than Savings
– Effect on Energy Markets
– Another Constraint is Usually in Hiding
• Studies to Date Have Not Shown Instances Where
Transmission Development Lowers Cost Enough to Justify the
Investment on a Purely Economic Basis
• Reliability Upgrades Affect Congestion
• Diligence is Justified
– Persistent High Impact Constraints
– Low Cost Transmission Investments
PowerGEM
Power Grid Engineering & Markets
39
PowerGEM Observations
• LMP Based Rewards for Transmission Investment are Weak
–
–
–
–
–
LMP’s are Volatile
Congestion is Shifty and Difficult to Predict
Small Changes Can Make a Large Local Difference
Upgrades Remove the Source of Reward
Free Rider Issues
• LMP’s Are Strong Indicators for Generation
• Affect on Bid Production Cost is a More Dependable Reward
for Transmission Investment
PowerGEM
Power Grid Engineering & Markets
40
PowerGEM Lessons Learned
•
•
•
•
Congestion is Persistent
LMP’s are Volatile
Shadow Prices are Even Yet More Volatile
Unit Commitment Has a Major Impact on Congestion Location and
Price
• Congestion Cost Measurement Depends on Application
• Transmission Upgrades Shift Rather than Reduce Cost to Customers
• Bid Production Cost Change is a More Stable Measure of Upgrade
Merits
PowerGEM
Power Grid Engineering & Markets
41
Remember
• Numbers
– Average 4 Simultaneous Constraints Every Hour in NY
– NY Congestion Impact: 2003 = $85 Million; 2004 = $72 Million
• Observations from a Planning Perspective
–
–
–
–
Congestion Occurs at All Load Levels
Most Congestion Impact is Due To Chronic Events, Not Price Spikes
Bottleneck Relief Is Not as Cost Effective as Generally Believed
Analysis of Large Persistent Transmission Constraints is Prudent
PowerGEM
Power Grid Engineering & Markets
42