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FERC Order 764 Overview

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Rajdeep Roy

on 30 April 2014

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Transcript of FERC Order 764 Overview

FERC Order 764 Overview
"15-min Market"

By: Rajdeep Roy
What is FERC Order 764?
-On June 22, 2012, FERC approved the order to remove barriers to the integration of variable energy resources (VERs) by requiring each transmission provider to:
1) Offer an
to schedule energy with 15-min granularity
2) Require VERs to provide meteorological and forced outage data for the purpose of power production forecasting
- For the CAISO, this meant the major changes are required for intertie transactions since internal resources already receive advisory 15-min schedules and are dispatched every 5-min.
- FERC required an "option" for 15-min scheduling to be available, but no requirement for intertie or internal generation to participate in 15-min scheduling, however, FERC does allow the transmission provider to propose a superior approach.
CAISO Decides to Propose a Superior Approach
-CAISO has decided to implement a real-time market (RTM) change that adds a full 15-min energy scheduling and settlement.
- CAISO's proposal accomplishes the following overarching goals:
- Compliance with FERC Order 764 to provide 15-min energy scheduling for all resources
- Allows for hourly schedules at interties to remain, however, the CAISO does not guarantee the price for those schedules for the entire hour
- Address existing real-time imbalance energy offset issues that occur due to changes between the HASP and RTD optimizations
- Address previous issues with convergence bidding at the interties
- Meet the needs of VERs through the ability to provide more frequent energy schedules using forecast updates closer to the financially binding interval
What changes in the CAISO Market?
-DAM, HASP, 5-min
- HASP produces binding hourly schedules & prices for non-dynamic interties (energy & AS) and advisory schedules for internal gen and dynamic interties

- 15 min process called RTUC is used to procure incremental financially binding AS and unit commitment

- Load settles based on deviations from DA Market and actual CAISO metered demand
- 5-min market provides financially binding 5-min energy dispatches for internal generation and settled at 10-min level (aggregated weighted average of two 5-min LMP intervals)
- CAISO requires hourly bid submission
- DAM, Hourly Process, 15-min, 5-min
- Hourly process to accept block schedules determines binding hourly block schedules on the interties but no prices; and the 15-min market optimization will dispatch other types of intertie transactions
- 15-min market produces binding schedules & prices for interties (dynamic and non-dynamic), internal generation, and load

- 15-min market still procures financially binding incremental AS and unit commitment
- Load will also settle with 15-min and 5-min LMPs based on deviations from DA energy schedules and ISO RT forecast.
- 5-min market does not change, however, settlement intervals will be 5-min vs 10-min today
- CAISO still retains hourly bid submission
Updated Market Timeline
T-22.5 Market awards from Market 1 Optimization are published
Same as today
Same as today's HASP Market
Today Market 1 RTUC Optimization starts at T-22.5
Real-Time Bid Submission
- The bid submission timeline has the same deadline as the current RT market design
- Bids will be used to economically
1) Accept hourly block schedules
2) Schedule resources for energy in the 15-min market
3) Dispatch resources in the 5-min market
- The same bids will be used for the 15-min market and the 5-min market
- Load will not be allowed to bid their load in the RT market and will clear based on CAISO's forecasted demand by DLAP
- CAISO will change how bids are submitted by interties in order to accommodate both hourly and 15-min economic bids and self-schedules
-The CAISO will run two processes:
1) Hourly Process to Accept Block Schedules
2) 15-min market optimization to determine binding energy schedules and AS awards
- Intertie resources will submit the following information:
Intertie Bid Submission
Hourly Process to Accept Blocked Schedules
- No longer any financially binding HASP schedules for energy and AS over the interties
- However, the ISO will run a market optimization to accept hourly block schedules and provide advisory energy schedules and AS awards
- The results of the Hourly process is published at the same time as HASP today and will be used for tagging
transmission profiles
- CAISO is proposing 6 options for intertie resources to manage any transitional seams issues as WECC moves to 15-min energy scheduling.
6 Intertie Bidding Options
1) Self-Scheduled hourly block
- AS can also be awarded as a block schedule and will be considered a self-provision in the 15-min market to determine the financially binding ASMP
- CAISO will still dispatch contingency reserves on the interties with the WECC practice to remain at the same dispatch level for the remainder of the hour
- The hourly process will have a market optimization constraint to enforce the energy schedule for each 15-min interval in the hour to be the same
- Then considered self-schedule in the 15-min market
- The hourly market optimization will use the forecasted energy for each 15-min interval
- Then in the 15-min the VER can update its self-schedule based on the most current forecast
Economic bids &
Dynamic Transfers
- The hourly process market optimization will produce advisory energy schedules for each 15-min interval
- The energy schedule in the 15-min market can be different than the advisory schedule in the hourly process
- However, the 15-min energy schedule cannot exceed the transmission capacity listed on the e-tag prior to the start of the 15-min optimization
Intertie Import Example
- The CAISO would approve e-tags with transmission profiles that exceed the maximum projected 15-min energy advisory schedule (also block award with intra-hour change)
- Allows the CAISO to dispatch these intertie resources above their e-tag in the 15-min market
- Thus accepted transmission profiles in aggregate may exceed the intertie transfer capacity but in no case will the CAISO accept energy profiles and AS awards that in aggregate exceed the transfer capacity of the intertie
1) Self-scheduled hourly block
2) Self-Scheduled VER forecast
3) Economic bid hourly block
4) Economic bid hourly block with single intra-hour schedule change
5) Economic bid with participation in 15-min market
6) Dynamic Transfer
E-Tagging Rules by Bid-Type
Self-Schedule Hourly Block
- T-20 Tag,
= Hour Ahead Process Schedule
= Hour Ahead Process Schedule
- No changes to tag made from 15-min market
profile can be updated intra-hour due to reliability curtailments
Self-Schedule VER Forecast
-T-75 Tag, use 15-min granular forecast for hour-ahead process
Economic Bid Hourly Block
- T-20 Tag,
= Hour Ahead Process Schedule
= Hour Ahead Process Schedule
- No changes to tag made from 15-min market
Economic bid block with single intra-hour schedule change
- T-20 Tag,
>= Hour Ahead Process Schedule
= Hour Ahead Process Schedule unless updated in the first 15-min market
- 15-min market can increment
profile up to lowest transmission profile tagged prior to start of binding 15-min market optimization
- 15-min market can decrement
profile updated once within the hour 20 min prior to flow and remains unchanged for the balance of hour
Economic bid with participation in 15-min market
- T-20 Tag
>= Maximum MW energy bid submitted for participation in 15-min market
= 15-min market schedule for interval 1
profile is updated every 15-min based upon 15-min market results
Dynamic Transfer
- T - 20 Tag,
>= Maximum MW bid submitted
profile in dynamic tag will be updated after schedule hour
-T-37.5 Tag, updated forecast used for self-schedule in first 15-min market
-T-20 Tag,
>= Maximum projected energy award in 15-min interval from hour-ahead process
= 15-min market schedule for interval 1
Profile updated every 15 min
- VERS can either use the CAISO's 15-min expected energy forecast in the hourly process or their own (CAISO charges $0.10/MWh)
- However, if they use their own, they will be subject to a penalty similar to the HASP schedules decline charge, if they overstate expected energy
- This hourly block process schedules decline charge will also apply to other intertie transactions that do not e-tag an accepted hourly block schedule
Economic Bid
Hourly Block
- Hourly Process optimization will see if the average LMP for each 15-min interval clears above the hourly block bid
- No guarantee that actual 15-min optimization prices will clear that bid
-Can be used to minimize price risk
Economic bid with one intra-hour change
- Same as Economic bid hourly block, except compares actual 15-min optimization LMPs
- "One-and-done" methodology
- Current WECC practices allows and has established business processes that support a single intra-hour schedule change of interties
- To encourage 15-min market participation
Economic Bid Participation in 15-min Market
- A situation where an intertie is willing to be rescheduled in the 15-min market even if it is not accepted in the hourly process
- The intertie can cap the amount it wants to make available in the 15-min market by updating its transmission profile to that amount prior to the start of the 15-min optimization
- Intertie resources that participate in the 15-min market are eligible for BCR
2.5 min to update e-tags
CAISO did a study to show that there is no material difference in estimating system conditions 15-min earlier, which would negatively impact the improved market efficiency of the 15-min market
- CAISO will look to see if they can make the optimization quicker to increase the time for e-tagging
Short-time frame for E-tagging
Settlements with 15-min Market
- DA energy schedules are settled at the DA LMP
- Deviation from DA schedule to 15-min schedule is settled at the 15-min LMP
- The deviation between RTD energy dispatch and the 15-min energy schedule is settled at the 5-min LMP
- The deviation from the RTD energy dispatch and CAISO Meter is settled at the 5-min LMP
Instructed and Uninstructed Imbalance Energy
- Instructed imbalance energy is calculated every 15-min for the 15-min market and every 5-min for the 5-min market
- The 15-min instructed imbalance energy is based on a flat 15-min energy schedule across the relevant 15-min interval
- The 5-min instructed imbalance energy will be based on the DOP
- Uninstructed imbalance energy will be calculated every 5-min
- With the transition to the 5-min meter data, there will be no reason to distinguish between tier-1 and tier-2 uninstructed imbalance energy, all uninstructed imbalance energy will be settled in one tier
- Real-time BCR will include revenues and costs from both the 15-min market and 5-min market using the same hourly bid curve
- All intertie transactions will be settled in a consistent manner to internal resources
- Economic dispatch in the 15-min market, dynamic transfers, and VERs using the ISO forecast will be exempt from the decline charge
Settlement of Load
- Differences in load from DA schedules will be settled at hourly weighted (by MW) average LMP of the 15-min market and 5-min market by DLAP (bounded by the most extreme LMP from those relevant intervals)
- The use of DLAP load forecasts to determine the hourly weighted average price will be included in the settlement data provided to LSEs
- Since Load is continued to be metered on an hourly basis, the weighted average approach does result in neutrality charges allocated to load
- Load following MSS will be settled similar to the current market design
Inter-SC Trades
- The proposed changes to the RTM will not result in inter-SC trades becoming a 15-min product
- Inter-SC trades will remain an hourly product and will be settled in real-time at the simple average of the four 15-min market LMPs
GMC Charges
- Since 15-min market is now financially binding for both energy and AS, the CAISO proposes to include energy and AS awards into two GMC charge codes:
1) Market Services
2) Bid Segment Fee
- GMC charge code will be applied to each SC's gross absolute value of awarded MWh of energy and MW per hour of AS in each market
- The bid segment fee is set at $0.005 per bid segment and is applied to all bid segments submitted
- PIRP resources today get the benefit of having their uninstructed imbalance energy to be netted over the month and paid (or charged) as the average weighted monthly LMP
- Current PIRP resources must submit the CAISO hourly forecast generated 90-min prior to the hour to be eligible for the monthly netting
- 15-min market will introduce an ISO forecast with a two-hour look-ahead and 5-min granularity and therefore PIRP monthly settlement will be phased out
- Only resources that request PIRP Protective measures within 30-days of the date of the Tariff filing will have the PIRP settlement for 3-years
- In addition, ISO will develop a certification process to approve the VERs forecast and reserves the right to cancel a VERs ability to forecast
- CAISO is preparing to file their Tariff modifications November 2013
PIRP Protective Measures
1) Greater than 50% of the resources is composed of old technology that is unable to curtail output without significant investment
- Dispatch, control, and telemetry or metering needs only would not qualify
- Turbine replacement would qualify
2) There are not options under a bilateral contract to mitigate real-time energy settlement risk
- Qualifying Facilities 20 MW or less are not eligible
- Any bilateral contract must specify resource is directly or indirectly responsible for costs based on CAISO market real-time energy settlement
3) During the term of the transition period, the resource owner will seek a long-term PPA and/or will upgrade the intermittent generator so it can respond to CAISO dispatch instructions
4) The resource owner must sign an affidavit certifying the resource meets all criteria (items 1-3) above.
- Even with PIRP Protective Measures, the resource would get today's settlement with a 90-min ahead forecast
- Due to the short time-frame the CAISO will provide the option to automatically update the energy schedules on the e-tags for the 15-min market awards within the hour
- Neighboring balance authorities have stated this will expedite their subsequent approval of the updated e-tags
- SCs can choose to opt-out if they chose and that would be reflected in the bid
Self-Scheduled VER forecast
VERs Forecasting Options
2) Self-Scheduled VER forecast
3) Economic bid hourly block
4) Economic bid hourly block with single intra-hour
schedule change
5) Economic bid with participation in the 15-min market
6) Dynamic Transfer/Economic Bid
Self-Schedule Hourly Block
1) Energy self-schedule and/or energy bid, same as today
2) AS bids, same as today
3) Flag to require bid to be considered as an hourly block schedule
4) Flag to allow one schedule change for the remainder of the hour for accepted block schedules
5) Flag to determine participation in the 15-min market if the intertie transaction is not accepted in the hourly process
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