Transcript caterpresentationsmdandefficiency102705.ppt

SMD and Efficiency Programs
• Standard Market Design (SMD)
– Implemented March, 2003
– Major feature, locational assignment of costs and
locational price signals
– Location of load and generation can affect total
revenues to generators and total costs to customers
– Goal is to improve system-wide efficiency, and hence
lower costs, through response of both load and
generation to locational price signals
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SMD and Efficiency Programs
• NE control area contains about 900 separate,
geographically dispersed pricing points called Nodes.
• A unique Locational Marginal Price (LMP) is established
at each Node
• LMP at each Node has three components
– Energy
– Losses
– Congestion
• Energy component is the same at each Node but
congestion and loss components can, and often do, vary
• Hence LMP can be different at each Node
– Referred to as geographic price separation or geographic basis
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SMD and Efficiency Programs
• Each generator in the ISO NE Control
Area (CA) delivers its output to a specific
Node
• Each generator sells all of its output to the
ISO at the posted LMP for its delivery
Node
• Generators will be paid more or less for
the same volume of output depending on
their location or Node
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SMD and efficiency Programs
• Load Zones are aggregations of Nodes
• Each Node is grouped into one of eight
Load Zones
• Load Zones cover broader geographical
areas
• VT is designated as a single Load Zone
• All Load within a Zone pays the same
Zonal LMP for energy
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SMD and Efficiency Programs
• Vermont Load Zone comprises about 70 Nodes
• 26 of these Nodes are designated as Pricing
Nodes
• Vermont Zonal LMP is calculated as the
weighted average of LMP’s at the 26 Pricing
Nodes
• Thus LMP at Pricing Nodes directly affects Zonal
LMP
• Power flows at non-pricing nodes can indirectly
affect Zonal LMP via impacts on the LMP at the
Pricing Nodes
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SMD and Efficiency Programs
• Graph on next slide shows average prices
at each of the 25 Pricing Nodes contained
in VT Load Zone
• Prices reflect average hourly LMP over
entire SMD period starting in March, 2003
• Data show persistent price separation
across Zonal Pricing Nodes
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24
3
44 7
4
44 4
4
44 5
4
44 6
4
44 7
48
44
4
44 9
5
44 0
5
44 1
5
44 3
5
44 4
5
44 5
5
44 6
5
44 7
5
44 8
5
44 9
6
44 0
6
44 1
62
44
6
44 3
6
44 4
6
44 6
6
44 8
6
44 9
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LMP at Vermont Load Nodes
$60.00
$59.50
$59.00
$58.50
LMP
$58.00
$57.50
$57.00
$56.50
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SMD and Efficiency Programs
• Pricing Nodes are assigned weights based on
load share
• Contribution of Pricing Node LMP to Load Zone
LMP depends on both the Node weight and the
Node LMP
• Focusing Efficiency measures at high LMP
Pricing Nodes can affect Load Zone LMP in two
ways
– Can reduce load share at the Node and hence the
weighted contribution of the Node to Zonal LMP
– Can reduce LMP at the Price Node
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SMD and Efficiency Programs
• Benefits of lowering the LMP at the Load Zone
redound to all Vermont electricity consumers
• Thus, can create geographically disperse benefit
by targeting efficiency programs to high LMP
Pricing Node areas
• Prior graph indicates widest price separation of
about $2.00 per Mwh
• May not seem like much, but if average Zonal
LMP could be reduced by $.25 per Mwh,
Vermont electricity consumers would realize
annual benefit of over $1 Million
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SMD and Efficiency Programs
• Real benefits can be derived from clever response of both load and
generation to locational price signals
• Targeted efficiency can have an impact
• It is difficult to understand and model causal chain between changes
in load or generation at specific Pricing Nodes and ultimate impact
on Load Zone LMP
• But we do know that
– Pricing Nodes in VT exhibit different prices due to congestion and
losses
– Changes in amounts of load or generation settled at Nodes can affect
Nodal prices and/or weights
– Changes in Nodal prices and/or weights will affect the Zonal price paid
by all VT load
– Along with Zonal price impacts, location decisions can affect the level of
T&D deferral benefits
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SMD and Efficiency
• Further analysis will be needed to confidently
estimate the Zonal price benefits that might
result from geographically targeting specific
efficiency measures
• Structured analysis on impacts of locational
decisions can be conducted to help inform and
guide the design of efficiency programs
• CV is conducting on-going analysis of SMD
dynamics to improve its resource decision
making and is interested in sharing information
and analysis with other parties
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Nodal Identification
2437
4444
4445
4446
4447
4448
4449
4450
4451
4453
4454
4455
4456
4457
LD.BARRE_VT34.5
LD.SO_HERO 115
LD.BERLINVT34.5
LD.STJHNSBY115
LD.IRASBURG48
LD.HIGHGATE48
LD.STALBANS34.5
LD.E_FAIRFX34.5
LD.ESSEX 34.5
LD.EAST_AVE13.8
LD.QUEENCTY34.5
LD.QUEENCTY13.8
LD.NEW_HAVN44
LD.MIDLEBRY44
4458
4459
4460
4461
4462
4463
4464
4466
4468
4469
4470
LD.BLISVILL115
LD.N_RUTLND44
LD.ASCUTNEY44
LD.FLORNCE 44
LD.WINDSOR 115
LD.HARTFDVT44
LD.CHELSEAV115
LD.MIDDLESX34.5
LD.BENINGTN115
LD.BENINGTN69
LD.COLD_RV 115
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