Day-Ahead Commitment Process Design Introduction Technical Panel November 8, 2005
Introduction Day-Ahead Commitment Process: – Market initiative to address reliability needs for Ontario’s power system in 2006 – Will provide a much better indication of supply and demand of energy one day in advance than is possible now • Day-Ahead reliability guarantees compensate committed resources for losses on the dispatch day. 2
Introduction • Simple commitment process – Attempt to minimize the impacts on market prices and uplifts – Desire minimal change to both the IESO and the market participant systems and processes • Objectives – Provide improved opportunity for scheduling of imports in order to decrease import failures – Ensure sufficient internal generation resources are on- line in real-time to satisfy reliability needs 3
Summary • A proposed Day-Ahead Commitment Process design was first posted on September 30, and has been significantly changed as a result of stakeholder feedback: – At a full-day general session for all stakeholders – Oct 6 – At eight full-day focused stakeholder sessions held with representatives of suppliers and consumers – Oct 12 - Nov 3 • A revised design document will be posted later this week and discussed at an open stakeholder session on Nov 16. • Not all design details have been finalized. 4
Design Topics Day Ahead Commitment Process • Day Ahead Submission of Offers and Bids – Ontario Generators • Dispatchable, Self-Scheduled, Intermittent and Transitional Scheduling Generators – Loads – Imports – Exports – Timing – Changes to Data • Day Ahead Commitment Process • Reliability Guarantees • Surveillance and Compliance 5
Ontario Generators Day Ahead Submission of Offers • Voluntary day-ahead submission of offers for dispatchable generation – Must include energy-limits if applicable – Limit real-time offers to hours and volume offered day-ahead • Mandatory day-ahead data submissions for self- scheduling generation facilities, intermittent generators and transitional-scheduling generators. • Day ahead offers and data needed to provide complete picture of internal resource situation 6
Loads Day Ahead Submission of Bids • Voluntary day-ahead submission of dispatchable load bids – expected to bid +MMCP if plan not to be dispatchable next day – Limit dispatchable bids for real-time dispatch to hours and volume bid day-ahead • No day-ahead guarantee paid to dispatchable loads, as they are flexible and treated like quick-start generators • No ability for any involvement of non-dispatchable loads in this process – Quantity to be forecast by IESO as is done now for pre-dispatch – IESO to consider using average hourly demand forecast instead of peak. 7
Imports Day Ahead Submission of Offers • Voluntary day-ahead submission of import offers – cannot mandate or force import offers 8
Exports Day Ahead Submission of Bids • Export bids will not be considered by the day- ahead commitment process – IESO staff would prefer to consider exports (and thus market demand) in the day ahead commitment process, but have been unable to determine a viable mechanism to include them – stakeholders have also considered this challenge, but have also been unable to develop a viable proposal 9
Timing Data Submission for Day-Ahead Commitment Process • Offers and bids for consideration by the Day Ahead Commitment Process to be submitted by 11:00 day-ahead – same as the current window for submitting dispatch data for the initial pre-dispatch schedule – use existing market participant interfaces 10
Price and Quantity Changes During the Day-ahead Commitment Process • Energy-limited resources – allowed to change offers to move energy to other hours and resolve deficiencies • Other resources – no changes to price and quantity considered until day-ahead commitment process concludes 11
Price and Quantity Changes After the Day-ahead Commitment Process • Energy-limited resources – allowed to change price, volume, hours, energy-limit • Other internal resources – allowed to change offers and bids within envelope offered or bid into day-ahead commitment process • reductions in quantity not allowed if impacts reliability • envelope can expand if required for reliability or if participant couldn’t reasonably know of capacity increase day-ahead • Imports – allowed to change price, volume, hours 12
Design Topics Day Ahead Commitment Process • Day Ahead Submission of Offers and Bids • Day Ahead Commitment Process – Timeline – Run Process Every Day? – “Market” Iterations – IESO Commitment Actions – Pre-Dispatch of Record – Transparency of Process – Integration of Day-Ahead Commitment Process with Global Adequacy Authority • Reliability Guarantees • Surveillance and Compliance 13
Day-Ahead Commitment Process Overview 14
Timeline Day Ahead Commitment Process • Use existing pre-dispatch scheduling timing – Initial PD for next day begins at 11:07 – Subsequent PD runs each hour – Final PD for Day-Ahead Commitment Process begins at 14:07, results available about half hour later. • Generators accept/ reject Guarantee by 15:00 • Constraints for internal generators determined by Day- Ahead Commitment Process passed to subsequent pre- dispatch process by 16:00. 15
Run Every Day? Day Ahead Commitment Process • Process will be run every day – IESO staff need the complete day-ahead view of the system that this process will provide every day. • Better day-ahead view also beneficial to participants • Will guarantees be offered every day? – Remains an outstanding issue • IESO position will be provided in the next version of the design document and discussed with stakeholders on Nov 16. 16
“Market” Iterations Day Ahead Commitment Process • Energy Limited Resources can adjust offers during the first two pre-dispatch process iterations after the initial pre-dispatch run – Up to 13:00 • Allows market to try and fill any schedule “holes”, before IESO takes commitment actions 17
IESO Commitment Actions Day Ahead Commitment Process • IESO will request to constrain on non-quick start generators to create a viable day-ahead schedule • Two reasons for these IESO actions: – Avoid a short shutdown of a generator between two periods where it is scheduled. – Avoid a generator commitment for less than its minimum loading and run time. • Affected Market Participants consulted before IESO commitment actions taken. – Action only taken if acceptable to MP 18
Pre-Dispatch of Record Day Ahead Commitment Process • Pre-dispatch of Record Produces: – Constrained schedules for dispatchable generation resources that are eligible for the Guarantee. These schedules will be to at least the minimum loading point for the minimum run-time. – Constrained schedules for imports. These schedules represent the quantities and hours to be delivered in real-time. Scheduled imports are committed and are eligible for the day-ahead intertie offer guarantee. 19
Process Transparency Day Ahead Commitment Process • Existing pre-dispatch schedule publication to remain unchanged • Notification to market of IESO need to take commitment actions • Notification to market of IESO commitment actions taken – While meeting required confidentiality rules • Discussion of IESO desired commitment actions with affected market participants 20
Integration of Day Ahead Commitment Process with Global Adequacy Authority • IESO is separately pursuing Market Rules to provide it the authority to constrain resources for global adequacy. • One of the principles considered for the application of this authority is to delay applying resource constraints until the last opportunity. • Given physical characteristics of generators, this may mean the application of “global adequacy” constraints during or even before the Day Ahead Commitment Process in some cases. 21
Design Topics Day Ahead Commitment Process • Day Ahead Submission of Offers and Bids • Day Ahead Commitment Process • Reliability Guarantees – Generation Cost Guarantee – Day-Ahead Intertie Offer Guarantee (DA IOG) – Integration with Existing Real-Time Guarantees • Surveillance and Compliance 22
Generator Cost Guarantee Reliability Guarantees • Offers a guaranteed recovery of certain eligible costs for domestic generation facilities that are not quick-start facilities – Eligible costs include start-up and minimum generation costs – Cost data submitted ex-post (same as SGOL) – Revenues earned from energy price and CMSC for minimum load are compared with costs submitted (same as SGOL) • Eligibility to receive a guarantee requires: – “scheduled” day-ahead for a period at least equal to the resource’s minimum run time and minimum loading point and – acceptance of the reliability guarantee and – performing in real-time in a manner consistent with the day-ahead commitment. 23
Generator Cost Guarantee (cont.) Reliability Guarantees • Acceptance of the generation cost guarantee is voluntary. • Acceptance of a day-ahead generation cost guarantee does not preclude the right of the market participant to receive Congestion Management Settlement Credits for that facility. 24
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