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Market Evolution Program

Stay informed about the latest market developments, upcoming stakeholder workshops, and key initiatives such as Multi-Interval Optimization and Day Ahead Market. Get involved and contribute to the ongoing transformation.

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Market Evolution Program

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  1. Market Evolution Program Market Operations Standing Committee Meeting April 23, 2003 1

  2. Overview • Consultation • Initiative Status 2

  3. Overview • Day Ahead Market • Multi-Interval Optimization • Short Term Resource Adequacy • Long Term Resource Adequacy • Wholesale/Retail Integration • Environmental Tracking • Locational Marginal Pricing 3

  4. 4

  5. 5

  6. access input/dialog notify post Email IMO.consultation@theimo.com Phone 905-403-6931 Working Groups/Consultation Working Groups IMO Stakeholders 6

  7. Working Groups • Working Groups were formed after an initial fact-finding period for initiatives that were mature enough to benefit: • Multi-Interval Optimization • Day Ahead Market • Long Term Resource Adequacy • Advisory process to help IMO make informed recommendations, particularly with respect to stakeholder perspective on issues 7

  8. Next Steps Stakeholder workshops planned for May/June on the Long Term Resource Adequacy and Day Ahead Market initiatives Dates announced by the end of this week Format: • Face - to - Face • Webcast • Each consists of an educational component and an opportunity for questions/input • Presentations will be made available in PowerPoint and as a Media Player file with audio 8

  9. Locational Marginal Pricing • Nodal pricing behaviour since market opening is being assessed • Expect decision in the next few weeks on priority of continuing this work Environmental Information Tracking • RFP for system prepared based on draft regulations • Early stages of assessing training and education needs of consumers/participants 9

  10. Day Ahead Market Leonard Kula 10

  11. Day Ahead Market • DAM discussion paper • Examined and ruled-out simple DAM for summer 2003 • Formed DAM Working Group following Feb 18 MAC • Developed DAM Objectives and Key Principles • Prepared Feasibility Study - Mar 28 IMO Board accepted DAM direction and approved commencement of design phase • Staged approach - high level design to be completed by July at which time an assessment will be made whether to proceed further 11

  12. Day Ahead Market • Assessment of high level design: • How well it addresses some of the problems evident in current market design and operation • Appropriate linkages to long term resource adequacy initiative • Broad stakeholder consensus on the benefits of implementing the proposed design • Appropriate cost recovery mechanism • Working Group is engaged in identifying design issues and potential solutions • Stakeholder workshops planned for early June on proposed high level design 12

  13. Day Ahead Market • DAM Working Group: • Principles and Objectives • DAM and impact on Market Participant Classes • Reviewed other DAM Options • Working Group consensus to proceed with SMD-style DAM • Commencing discussions of high-level design features 13

  14. Day Ahead Market Design • User Requirements • WHATthe DAM will look like - complete September 2003 • Split into high level design and detailed design: • High level design - present to MAC June 11, IMO Board July 3 • Detailed design • Significant portion of participant-facing elements • System Requirements • HOW the DAM will work - complete November 2003 • Fewer participant-facing elements 14

  15. Multi-Interval Optimization Mark Wilson 15

  16. Multi-Interval Optimization - What have we done? • Feb 18 MAC Breakout sessions • Working Group • Formed with representation from generators and loads • Meets either via conference call or face-to-face sessions on a weekly basis • Focussed on three key issues: • Optimization Function • Optimization Time Period • Dispatch Advisories (How,What,When) 16

  17. Multi-Interval Optimization Objectives • Improved Operational Reliability • Resources will automatically be scheduled in advance to allow ramp rate capability to be utilized to solve future reliability concerns • Operational Stability • Reduced Unit Cycling - The number of start/stop sequences for resources will be reduced relative to current operation • Improved Compliance - Non-compliance with dispatch instructions will be reduced • Improved Market Transparency • IMO manual intervention in the dispatch solution will be reduced • Improve Market Efficiencies • Constraint payments caused by limited ramp capability will be reduced compared to present dispatch 17

  18. Two Proposals 18

  19. Issues/Recommendation • Issues • ABB Solution • Calculation time • Potential hardware upgrade costs • IMO Solution • Solution may not always be optimal • Recommendation • Implement IMO solution • IMO Board approved design stage funds • Will go back in July for build phase funding 19

  20. Next Steps 20

  21. Resource Adequacy Jason Chee-Aloy 21

  22. Short Term Resource Adequacy • Options reviewed, recommended mechanisms being implemented: • Emergency Demand Response • Hour Ahead Dispatchable Load • Replacement Energy 22

  23. Long Term Resource Adequacy • Discussion paper • Working Group formed • Performing feasibility assessment with recommendation targeted for July, design to be completed by year end • Six options currently under investigation • LECG consultants engaged • Working Group is engaged in identifying issues and potential solutions • Stakeholder workshops planned for early to mid-May on draft feasibility assessment 23

  24. Long Term Resource Adequacy • LTRA Working Group: • Objectives • Evaluation Criteria • Draft Feasibility Study 24

  25. Wholesale/Retail Integration Edward Arlitt 25

  26. What is a Wholesale/Retail Issue? • No formal definition, but generally these issues all display four common characteristics: • Both the wholesale and retail markets are affected • It is in the long-term interest of both markets to resolve them • No single governing/regulatory authority has full rule-making powers or responsibility over the issue • They are generally complicated by the fact that they span the wholesale/retail market boundary - particularly in areas such as issue ownership, computer systems, business processes and financial risk management activities 26

  27. Wholesale/Retail Integration Issue Areas: • Financial Stresses across the market boundary • Opening the door to future demand response products that retail customers can participate in while providing a reliability benefit • Ensuring that the wholesale/retail market boundary keeps pace with emerging technologies such as retail-level metering and microgeneration Developments: • Wholesale/Retail Integration discussion paper soliciting stakeholder feedback to be released shortly • Upcoming Pilot Projects 27

  28. Wholesale/Retail Integration The Approach: • Avoid overlap with topics being addressed in existing stakeholder forums • Use of Pilot Projects to look ahead to future logistical challenges • Ensure that future solutions do not conflict with the evolving role of various market participants and retail entities • Ensure alignment with other MEP initiatives 28

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