Transcript NARUC Electricity Committee Standard Market Design

RGGI Workshop on Electricity Markets, Reliability and
Planning
Topic Session 3:
RGGI Design, Markets and Reliability –
Issues Relating to System Operations
Mark Babula – ISO New England
New York City – November 30, 2004
Objective: Three
Messages
1. Reliability is paramount
2. Fuel diversity is important
3. Maintaining reliability requires certain
units to operate.
uneconomic
Therefore… RGGI design needs to accommodate all
three requirements.
RGGI Workshop
11/30/04
ISO New England Inc.
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Example: New England’s Electric Power System
• Serves 14 million people
• Peak demand: 25,348 MW on 8/14/02
(Lower Winter Peak)
• 350+ generating units = 31,000 MW
400 mi.
• 12 interconnections to neighboring
systems provides summer import
capability from New York ( 1,500 MW)
and Canada (2,400 MW)
320
mi.
RGGI Workshop
11/30/04
ISO New England Inc.
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ISO New England Inc.
•
•
Is Responsible for:
– Bulk power system reliability
– Deregulated wholesale market administration
– Regional transmission planning
Is in transition to becoming a Regional Transmission
Organization (RTO)
– No change in market structure and operations
– Provides greater authority plus states advisory role
RGGI Workshop
11/30/04
ISO New England Inc.
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Time Scales: Reliability vs. Cap Compliance
•
Reliability must be maintained at all times:
– Second by second / minute by minute / hour by hour
•
CO2 Cap Compliance would have a longer time frame:
– Monthly / Quarterly / Seasonal / Yearly
•
RGGI Issue: Who is responsible for tracking,
administering, and ensuring compliance with the periodic
CO2 Caps: the suppliers?..the ISO?..the States?..or some
combination?
RGGI Workshop
11/30/04
ISO New England Inc.
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Examples of Tools for Assuring
Reliability:
•
Real-time system security:
–
–
–
–
•
•
Markets
System Planning:
–
–
•
Resource adequacy
Transmission adequacy
RGGI issues = Treatment of CO2 emissions:
–
–
•
Out-of-merit dispatch order of generating units
Emergency Operating Procedures
Voltage reductions
Load curtailment
During operational emergencies and transmission planning
In state siting procedures for new infrastructure
The RGGI Cap must be capable of being reflected through the Markets &
Operations
RGGI Workshop
11/30/04
ISO New England Inc.
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New England’s Fuel Diversity:
1993 vs. 2003 Energy Mix
2003
1993
Net Interchange
6%
Hydro
7%
Misc
6%
Misc.
5.3%
Net
Interchange
4.1%
Oil
5.6%
Nuclear
39%
Gas
12%
Coal/Oil
1.2%
Gas
30.1%
Hydro
5.7%
Oil/Gas
10.0%
Oil
15%
Coal
15%
Coal
11.8%
Nuclear
26.2%
Sources: ISO NE 1993 Annual Report and
ISO NE Regional Transmission Expansion Plan 2004
RGGI Workshop
11/30/04
ISO New England Inc.
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Fuel Diversity
•
RGGI Reference Case assumes:
–
New capacity is mostly gas-fired combined cycle technologies causing a projected
CO2 increase of ~20 million tons by 2020
–
•
Meets the states’ RPS for renewables, projected improvements in efficiency use
RGGI and energy facility siting issues: Only permit (or
give advantage to) non-CO2 emitting resources to satisfy
load growth?
–
Efficiency and conservation
–
Wind, solar, & renewable biomass
–
Nuclear
–
Fossil fuels only if combined with 100% offsets
–
CO2 issues in new fuel-delivery infrastructure (e.g., natural gas pipelines, LNG)
RGGI Workshop
11/30/04
ISO New England Inc.
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Reliability and Out-of-Merit Unit
Operation
•
Ensuring the reliability of transmission-constrained load
pockets in New England may require out-of-merit units to
operate in order to:
– Cover generation and transmission outages (forced & scheduled)
– Provide voltage and VAR support
– Provide ancillary services (i.e. operating reserves: spin and nonspin)
•
These are compensated through the market or by special
contracts
RGGI Workshop
11/30/04
ISO New England Inc.
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Canadian Interchange and Leakage
NEPOOL Canadian Transactions
RGGI Workshop
11/30/04
NB Imports
2003
Year
2002
2001
2000
HQ Exports
1999
16000
14000
12000
GWH 10000
8000
6000
4000
2000
0
NB Imports
NB Exports
HQ Imports
HQ Exports
Total Imports
Total Exports
ISO New England Inc.
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NY & Canadian Interchange and
Leakage
•
•
Interchange is driven by energy economics
Net interchanges have been ~ 4 – 6% of total energy
(historically even more)
•
RGGI Issues:
– How to account for “Good” and “Bad” interchange from a CO2
generation point of view?
• Emissions of specific sources or
• System average?
RGGI Workshop
11/30/04
ISO New England Inc.
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CO2 Cap Compliance and Reliability
•
•
From the viewpoint of system operations and reliability:
Compliance flexibility is key for assuring reliability
Implications for RGGI design – build in sufficient
flexibility through:
–
–
–
–
–
Allocations
Treatment of trades
Creation of set-aside for “must-run” units operating for reliability
Siting low- or non-CO2 emitting resources to serve energy growth
Consider fuel diversity as essential feature of electric system
planning
RGGI Workshop
11/30/04
ISO New England Inc.
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Mark Babula
(413) 535-4324
[email protected]
System Planning
ISO New England Inc.
One Sullivan Road
Holyoke, Massachusetts
01040-2841
www.iso-ne.com