Transcript No Slide Title

Introduction to
PJM Load Response
GEN-301
7/17/2015
©2006 PJM
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What is Load Response?
“Load response is a highly useful and
beneficial tool to reduce costs and maintain
reliability during peak periods when
generation supplies may be scarce.”
According to the April 30,2002 FERC Order
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PJM Load Response
EMERGENCY
ECONOMIC
Designed to provide a
method by which end-use
customers may be
compensated by PJM for
reducing load during an
emergency event.
Designed to provide an
incentive to customers or
curtailment service
providers to reduce
consumption when PJM LMP
prices are high.
Load Response = Demand Side Response (DSR)
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Registered MW of Load Reduction
(through 2006)
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2006 Monthly MWh Reductions - Economic
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2006 Monthly Site Participation – Economic
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2006 Monthly Net CSP Credits – Economic
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Participation Growth – Economic
Total MWh
Total Payments
2002
6,727
$801,119
2003
19,518
$833,530
2004
58,352
$1,917,202
2005
113,393
$12,000,354
2006
217,056
$16,118,042
2002
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2003
2004
2005
2006
2002
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2003
2004
2005
2006
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Comparison of Revenue Opportunities
for Demand Response Current vs. Revised
Revenue Opportunity
PJM (as of 12/31/05)
PJM with new initiatives
Real-Time/Spot Energy Sales
Yes
Yes
Day-Ahead Energy Sales
Yes
Yes
Forward Energy Sales
No
Yes; Forward Energy
Reserve Market (under
development)
Forward Capacity Sales
Yes, but limited
Yes; RPM auction provides
options for participants
Energy & Capacity payment for
emergencies
Not in all cases
Yes; Emergency program
changes ensure payment
Ancillary Services
No
Yes; Synchronous Reserves
& Regulation (mandatory
training for CSP’s @ pjm.com)
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Types of Load Response
Who Offers Load Response Programs?
• Utility Sponsored
• Curtailment Service Provider Sponsored
• Load Serving Entity Sponsored
• Independent System Operator Sponsored
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Roles of PJM Market Participants
Load Serving Entity:
PJM Member, including Load
aggregator or power marketer,
serving end-users within the PJM
Control Area, to sell electric
energy to end-users with the PJM
Control Areas.
Curtailment Service Provider:
PJM Members that will act on
behalf of end-use customers who
wish to participate in PJM market
opportunities.
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Generator:
PJM Member that owns, or leases,
facilities for generation of electric
energy that are located within the
PJM Control Areas.
End
Use
Customer
Electric Distribution Company :
PJM Member that owns, or leases,
electric distribution facilities that
are used to provide electric
distribution service to electric
load within the PJM Control Areas.
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Options to Participate
EMERGENCY
Energy Only Option
•PJM sends notification of event
via email to CSP
•Energy payment
•Voluntary Curtailment
Full Emergency Option
•PJM sends notification of event
via email to CSP
•Energy payment and capacity
credit
•Mandatory Curtailment
ECONOMIC**
Day Ahead Market
•CSP Submit Day Ahead Bid in eMKT
•PJM Notifies CSP via eMKT
•Obligated in Real Time if Bid clears
Real Time Market
•CSP Notifies PJM via email one hour prior
to reduction
•Voluntary Curtailment
Dispatched by PJM in Real Time
•CSP Submits operational info via eSuites
•PJM Notifies CSP via email
**Except Real Time LMP Based Customer
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Payment to Load Reducers
EMERGENCY
PJM pays Zonal LMP
•Resource is made whole
to its offer value, which
includes:
•Minimum dispatch price
•Minimum down time
•Shutdown costs
• Full Emergency
participants also receive
capacity credit
ECONOMIC **
If Zonal LMP < $75/MWh,
•PJM pays Zonal LMP Retail Rate
(Retail Rate = Generation
+ Transmission)
If Zonal LMP > = $75/MWh,
•PJM pays Zonal LMP
**Except Real Time LMP Based Customer
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DrugCo Site # 1 – Real Time Load Curtailment
when zonal LMP < $75
Hour 12
Scheduled MW Reduction = 5
Actual MW Reduction = 4
Real Time Hourly Zonal LMP = $40
Retail Rate (GT) = $35
LSE #3
RT LMP
less than
PJM
(RT LMP – GT) * MW =
forecast
$5 * 4 MW = $ 20
LSE #1
(EDC)
(RT LMP – GT) * MW =
$5 * 4 MW = $20
GenCo
LSE #2
CSP
X% of $
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Customer
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DrugCo Site # 1–Dispatched by PJM in Real Time
•Shutdown Costs = $1,500
•Minimum Down Time = 6 Hours
•MW Reduction = 5 MW
•Retail Rate (G&T) = $35 /MWh
Example:
(
$ 1,500
6 Hours *
1
5 MW
)
Imagine If…..
Customer wants
to be
Dispatched by
PJM
+ $ 35 /MWh
=
$85.00
Action
Customer Decides to allow PJM to Dispatch in Real Time
Customer submits operational info to PJM (Bid Price ($87) > Marginal Cost)
PJM Forecasts Real Time LMP > $87.00 Hours 12 – 18
PJM dispatches load reduction
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DrugCo Site # 1 – Dispatched by PJM in Real Time
when zonal LMP > $75
Hour 12
Bid Price = $87.00
Bid Quantity (MW) = 5
Real Time Hourly Zonal LMP = $90
Actual MW Reduction = 4
Retail Rate (GT) = $35
(.1667 * GT) * MW =
$ 5.83 * 4 MW =$23.34
PJM
LSE #3
RT LMP
greater
than Bid
Price
(.6667*GT) * MW =
$23.83 * 4 MW = $93.34
(RT LMP-GT) * MW =
(.1667 * GT) * MW =
$ 5.83 * 4 MW =$23.34
$ 55 * 4 MW = $220
LSE #1
(EDC)
RT LMP * MW =
$ 90 * 4 MW = $360
LSE #2
Load Ratio Shares w/in zone:
LSE #1: 66.67%
LSE #2: 16.67%
LSE #3: 16.67%
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GenCo
CSP
X% of $
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Customer
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Payments, Costs, & Risks
Energy &
Capacity
Markets
Participation
Emergency
Emergency Event
Economic
•Day Ahead Market
•Real Time Market
•Dispatched By PJM
Payment
to Load Reducer
PJM pays Zonal LMP
•Made whole to offer
•Full Emergency
participants also get
capacity credit
If Zonal LMP < $75/MWh,
PJM pays LMP - Retail Rate
[Retail Rate = Generation +
Transmission]
If Zonal LMP > = $75/MWh,
PJM pays LMP
Economic
– Real Time
LMP Based
Customers
(Note: payments
to CSP
calculated
differently)
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•Real Time Market
Only
•Must be dispatched
by PJM
For duration of the load
reduction dispatched by PJM,
Actual Savings
[RT LMP * MW Reduction]
Total Bid Value
[(Strike Price * MW Reduction) +
Shutdown Costs ]
©2006 PJM
Cost
to Energy Market
Costs recovered for emergency
purchases in excess of LMP are
allocated among PJM Market
Buyers in proportion to their
increase in net purchases
If Zonal LMP < $75/MWh,
PJM recovers LMP less Retail Rate
from LSE
If Zonal LMP > = $75/MWh,
PJM recovers LMP less Retail Rate
from LSE
PJM recovers Retail Rate from all
LSEs in zone
Costs recovered from Operating
Reserves in the Real-Time Energy
Market
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Risks
to Load Reducer
Energy Only Option:
No charges for nonperformance
Full Emergency Option:
Capacity deficiency charge for
non-performance
Day Ahead participation:
If load reduction is committed
in Day Ahead Market and does
not perform in Real Time:
Real Time LMP * Shortfall
+
Balancing Operating Reserves
Charges
No Charges for NonPerformance
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Payments, Costs, & Risks
Ancillary
Service
Markets
Participation
Synchronized
Reserves
•Ten-minute reduction
requirement
•One-minute interval
metering
•Minimum 1 MW offer
•24-hour All-Call availability
Tier 1: Voluntary reduction
during a PJM Synchronized
Reserve event
Tier 2: Offers that clear in
hourly market. Mandatory
reduction during PJM
Synchronized Reserve event
Tier 1:
PJM pays $50 premium
above event LMP
•Ability to receive and react
to a dynamic regulation
control signal from PJM
•Real time telemetry
•Five-minute response (raise
or lower load within
specified bandwidth)
•Minimum 1 MW offer
•Resource certification and
testing requirements
•PJM pays Regulation
Market Clearing Price
(RMCP) * MW Assigned
•ELRP payment net
reduction during hour
•Make-whole payment to
cover offer
Regulation
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Payment
to Load Reducer
Tier 2:
•PJM pays Synchronous
Reserve Market Clearing
Price (SRMCP) * MW
assigned
•ELRP payment for
reduction during event
•Guaranteed recovery of
costs if assigned by PJM
©2006 PJM
Cost
to Energy Market
Synchronous Reserve costs
allocated to load servers:
Tier 1:
•Based on percentage share of total
Tier 1 credits paid
Tier 2:
•Based on obligation share
Risks
to Load Reducer
Nonperformance:
Tier 1:
No Penalties
Tier 2:
•Forfeiture of Tier 2 revenue
over contiguous hours
assigned
•Additional obligation in the
amount of shortfall for next
three same-peak days
Regulation costs allocated to
load servers:
(RMCP * Adjusted Obligation) +
Share of Opportunity Cost above
RMCP + Share of Unrecovered
Costs
Nonperformance for
assigned Regulation
resource:
•Forfeiture of revenue for
assigned MW’s
•Periodic testing below 75%
score requires re-certification
process
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New User Interfaces for Demand Response
•
•
•
•
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Curtailment Service Provider (CSP) Home Page
Registration
Settlement
Real Time Load Reduction Notification
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Home
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Registration
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Customer Management
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Notifications
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Notifications
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Settlement
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Settlement
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Questions??
PJM Load Response
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