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TRANSCRIPT
Considerations
of EIM Modeling
in WECC PCM
PCM Modeling Workgroup Meeting
November 19, 2019
Salt Lake City, UT
Xiaobo Wang, PhD
Senior AdvisorMarket Engineering
California ISO
Foreword 1 slide
What is EIM in the real world? 4
Table of contents
What is EIM technically? 5
What does the WECC PCM represent? 3
Is there anything we should model? 2
Summary 1
Foreword
This presentation is intended to
open up the discussion on
how or if to model EIM in
the 2030 WECC ADS PCM
Acronyms:
ADS = Anchor Data Set
PCM = Production Cost Model
Foreword 1
slidesWhat is EIM in the real world? 4
Table of contents
What is EIM technically? 5
What does the WECC PCM represent? 3
Is there anything we should model? 2
Summary 1
Online56%
Committed21%
77%
Note: The EIM size is measured by Net Energy for Load (NEL) according to WECC 2018 historical load data
Growth of the Western EIM
2014
2015
2016
2017
20182019
2020
2021
2022
1998
We are here
Currently, total 19 participants. Including 1 ISO, 8 EIM Entities online and 10 EIM Entities under implementation
Benefits of the Western EIMEconomic and environmental benefits
Data source: Western EIM Quarterly Reports
This amount of reduced CO2 emissions is the equivalent of removing annual emissions of
87,889 passenger cars
403,546
tons
Less GHG emissions due to displaced thermal generation
Acc
umul
ated
num
bers
sin
ce 2
015
976,896
MWh
More renewable output due to avoided curtailmentThis amount of energy is the equivalent of annual electricity consumption of
140,000 households in California
Acc
umul
ated
ben
efits
sin
ce E
IM la
unch
in N
ov 2
014
Reduced operational costs due to optimized dispatch
Economic benefit
Environmental benefit
This amount of money is enough to build a major 500 kV transmission line in the West
$801.07M
US dollars
Costs→ See “Appendix. EIM economic benefit” for more details
Beyond EIM: Extended Day-Ahead Market (EDAM)Benefit study completed. EIM entities suggest to move forward
The EDAM FA was
a joint study of
14 EIM entities and CAISO
Four other EIM entities
did not participate in the study
because they newly joined
Based off the EDAM Feasibility Study,
on 9/16/2019 EIM entities wrote a letter to
the EIM Governing Body and ISO Board of Governors
in support of expanding the current EIM to day-ahead market
Increased $ benefitsEIM EDAM
Reduced GHG emissions
The study found EDAM to be beneficial
From January to September 2019,
EIM entities conducted study named
“EDAM Feasibility Assessment (FA)”
Currently, EDAM is being discussed and designedUnder an open and transparent stakeholder process
Each participating BAA needs to maintain its own system reliability
Shall self-provide enough resources without leaning on neighbors
GHGGHG emission obligations across different jurisdictions
Emissions accounting for import
Under existing framework of OATT rates
Free and not-free transmission capacities
RS
TAC
Resource Sufficiency
Transmission Access Charge
Greenhouse Gas emissions
A few market designs will be worked out during the stakeholder process
Foreword 1
slides
What is EIM in the real world? 4
Table of contents
What is EIM technically? 5
What does the WECC PCM represent? 3
Is there anything we should model? 2
Summary 1
Energy Imbalance Market (EIM)What is “Energy Imbalance”?
ActualGeneration and load
ScheduledGeneration and load
Energy ImbalanceDeviation from schedules
“Actual” refers to 5-minutes
schedules optimized in the
Real-Time Market
“Scheduled” refers to
pre-determined schedules
in absence of an advanced
Day-Ahead Market
Currently, EIM operates only in Real-Time Market
EIM runs “last-minute” dispatch to achieve economic efficiencies across a regional footprint
EIM involves a small fraction of trading volume in the wholesale market
If the EIM expands to
Day-Ahead Market (i.e. “EDAM”),
then the word “Scheduled” would
lose its meaning, because
“Scheduled” becomes “Optimized”
What is EIM not?Neither EIM nor EDAM means joining the ISO
Not participating members of the ISO!Participating BAs are still sovereign control areas
ISO/RTO membersHighest degree of regional coordination in dispatch
EIMReal-time market
EDAMDay-ahead market
RTOSingle control &
planning area
The EDAM cover the dispatch of
complete wholesale market
The EIM achieves efficient “last minute”
trading across participating regions
The regional market is a
multi-state ISO
EIM
BAAISO
EIM
BAA1
EIM
BAA2
EIM
BAA3
BAAISO
BAA2
BAA3
BAA1
Why is EIM beneficial?(1) Improved dispatch within BAAs, (2) Enhanced sales & purchases across BAAs
(1) Intra-BAA dispatch: Optimized
(2) Inter-BAA transfer: Not optimized
Without EIM With EIM
(1) Intra-BAA dispatch: Less optimized (1) Intra-BAA dispatch: More optimized
In a security-constrained UC and ED,
the EIM uses the most economic resources
across the whole dispatch footprint
by taking advantages of
load diversity and resource diversity
(2) Inter-BAA transfer: Globally optimized
&
Scale
Diversity
Benefits through
Market modelTwo layers
WECC-wide
full network model
The current
WECC ADS PCM
falls short in modeling
this trading layer
The current
WECC ADS PCM
very well models this
physical layer
Today’s EIMFuture EIM if EDAM is implemented
EIM’s position in the market phasesCurrently, the Western EIM operates only in real-time market
Today’s EIM operates only in the Real-Time Market:
Inter-BAA hurdles are infinite if without EIM
Inter-BAA hurdles are zero with EIM
Today’s EIM does not operate in Day-Ahead Market:
Inter-BAA hurdles remains regardless of the EIM
Day-Ahead Market
IFMIntegrated Forward Market
Day-ahead forecasted load and renewables
Commit and dispatch generation to meet net load
for the next day’s 24 hours
Real-Time Market
FMM15-Minutes Market
RTD5-Minutes Market
Hour-ahead forecast
Commit and dispatch
for the next hour
Near-real-time forecast
Dispatch
for the next 5 minute
Question to the WECC 2030 ADS PCM:
What do we want to model? The current EIM, or the future EIM that also runs in Day-Ahead?
What market assumption would you like to make for the future?
Foreword 1
slides
What is EIM in the real world? 4
Table of contents
What is EIM technically? 5
What does the WECC PCM represent? 3
Is there anything we should model? 2
Summary 1
The WECC ADS PCMProduction simulation database
0 1 2 3 4 5 6 8,760 hours… …
January 1 December 31
The WECC ADS PCM simulates a whole year in hourly intervals
Using actual profiles for load and renewables.
Commit and dispatch generation to meet net load
Day-Ahead Market
IFMIntegrated Forward Market
Day-ahead forecasted load and renewables
Commit and dispatch generation to meet net load
for the next day’s 24 hours
Real-Time Market
FMM15-Minutes Market
RTD5-Minutes Market
Hour-ahead forecast
Commit and dispatch
for the next hour
Near-real-time forecast
Dispatch
for the next 5 minute
Which of the following dispatch phase is the WECC ADS PCM trying to mimic? Neither or all?
Economically more important, because of larger $ volume Physically more important, because of closer to actual MW
Things to keep in mind…Capabilities and limitations
If we claim that the WECC ADS PCM simulates Day-Ahead Market,
then we need to keep in mind about the following:
EIM does not exist in Day-Ahead Market
It is practically impossible to simulate the real-time-only EIM there. Then, don’t do it. Or?
LMP’s are more volatile in Real-Time Market than in Day-Ahead Market
Fair for simulating storage dispatch?
Inter-BAA flows are more dynamic in the Real-Time Market than in the Day-Ahead Market
Fair for reliability assessment of inter-regional transmission lines?
In future, EIM may be extended to the Day-Ahead Market, i.e. “EDAM”
What market assumption to make for 2030? Model EDAM?
1
2
3
4
Multi-phase market processesWith hourly and sub-hourly dispatch
Contract networkInter-BAA trading
with or without hurdles
Transmission networkPhysical constraints
A “pure” ISO model
What does it take to simulate the wholesale market fully?Keep in mind about the limitations of the WECC ADS PCM
WECC ADS PCM
Foreword 1
slides
What is EIM in the real world? 4
Table of contents
What is EIM technically? 5
What does the WECC PCM represent? 3
Is there anything we should model? 2
Summary 1
Modeling inter-BAA hurdles for EIMModel EIM in Real-Time Market only, or model EIM extended to Day-Ahead Market?
Model EIM?
Impossible with a day-ahead-like model of hourly dispatch
Hard to justify approximate method of “diluted hurdles”
Also hard to justify approximate method of “carved-out transmission capacity” for EIM
Model EDAM?
Relatively straightforward if assuming EIM will be expanded to Day-Ahead Market
Remove inter-BAA hurdles among EDAM participants
Approximation by ignoring the fact the some transmission is not free under EDAM
WECC ADS PCM
Modeling load following requirements for EIMAn EIM region shall have a combined load following requirement
# BAA name BAA ID Op. Year
1 California ISO CISO 1988, 2014
2 PacifiCorp PACE & PACW 2014
3 NV Energy NVEP 2015
4 Puget Sound Energy PSEI 2016
5 Arizona Public Service AZPS 2016
6 Portland General Electric PGE 2017
7 Idaho Power Company IPC 2018
8 Powerex BCHA 2018
9 Balancing Authority Northern Cal. BANC 2019, 2021
10 Seattle City Light SCL 2020
11 Salt River Project SRP 2020
12 Los Angeles Dept of Water & Power LADWP 2021
13 Northwestern Energy MWMT 2021
14 Public Service Co. New Mexico PNM 2021
15 Turlock Irrigation District TIDC 2021
16 Avista Corporation AVA 2022
17 Tucson Electric Power Company TEPC 2022
18 Tacoma Power TPWR 2022
19 Bonneville Power Administration BPAT 2022
# BAA name BAA ID Op. Year
1 Southwest Power Pool SPP 2014, 2021
2 WAPA Colorado-Missouri WACM 2021
3 WAPA Upper Great Plains West WAUW 2021
# BAA name BAA ID
1 Alberta E. System Operator AESO
2 Chelan County PUD CHPD
3 Douglas County PUD DOPD
4 Grant County PUD GOPD
5 Public Service Colorado PSCO
6 WAPA Lower Colorado WALC
7 El Paso Electric EPE
8 Imperial Irrigation District IID
10 CENACE CFE
CAISO’s Western EIM region SPP’s WEIS region None EIM areas
One combined LF requirement
One combined LF requirement
Individual LF requirements
WECC ADS PCM
Surely, this is something can be done.
It is simplified!
Foreword 1
slide
What is EIM in the real world? 4
Table of contents
What is EIM technically? 5
What does the WECC PCM represent? 3
Is there anything we should model? 2
Summary 1
SummaryDiscussions of EIM modeling in WECC ADS PCM
The WECC ADS PCM is an hourly and day-ahead-like production simulation
It is hard or impossible to represent the current real-time-only EIM in that PCM
Assumption is needed for future market structure in the Western Interconnection
If the assumption is EDAM proliferation, then the extended EIM can be modeled
Thanks to EIM, modeling load following requirement gets simpler
For EIM regions, load following requirements are combined rather than individual
EIM
EIM
EIM
slides
Table of contents
Appendix. EIM economic benefit 4
The Western EIMSince launch, economic benefit has accumulated to $801 million
190
224
82
38
123
63
49
1913
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
All time (5 years 2 months)
Total $801M as of 2019-Q3
Total Benefits ($Millions)
113
28 37
68
42
5
26
4537
62
48
1
1624
26
162
10
14
13
6
35
45
373
28
32
27
22
8
11
13
$0
$50
$100
$150
$200
$250
$300
2014 2015 2016 2017 2018 2019
Till Q3
Yearly Benefits ($Millions)
1 1 2 3 5 6 8 59 10
158 5
15
2821
4
13
24
65 48 9 6
11 11 15 911
9
10
7
11
1218
22
24
15
101
25
6
34
6
9
6
4
511
5
6 5
62
1
33
3
3
2
4
4
7 3
36
5
8 11
10
6
9
21
10
89
203
4
5
9
9
1211
9
8
13
6
8
8
5
2
3
3
7
3
1
9
4
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
$110
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2014 2015 2016 2017 2018 2019
Quarterly Benefits ($Millions)
BANC
PWRX
IPCO
PGE
AZPS
PSEI
NEVP
PAC
CISO
Details of the EIM economic benefitMonthly benefits are calculated, and reports are published quarterly
Data source: Western EIM Quarterly Reports
As of Q3
Since launch, the EIM benefit has accumulated to $801 million US dollars
The economic benefits are calculated by comparison of actual market clearing results with a “counter factual dispatch” case if without EIM
The economic benefit is the result of operational cost reduction
Information from the website
Through our
participation in the
EIM, we’ve saved
our customers over
$200 million so far,
and the savings get
bigger every year.
November, 2019
News on the internet
Low natural-gas prices and
strong interstate business are
allowing Arizona Public Service
Co. to drop customer bills by $3
a month on average starting
Friday.
Another major reason the
company is able to reduce bills
is its participation in the Energy
Imbalance Market run by the
California Independent System
Operator.
January 31, 2019