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Market Pricing Issues: Update

Market Pricing Issues: Update. Document ID #: MAC-05-07. Agenda. Background Recently Introduced Initiatives Hour-Ahead Dispatchable Load (HADL) Spare Generation On-Line (SGOL) Control Action Operating Reserve Proposal for Additional Control Action Operating Reserve Next Steps. Background.

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Market Pricing Issues: Update

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  1. Market Pricing Issues: Update Document ID #: MAC-05-07 Market Advisory Council of the IMO

  2. Agenda • Background • Recently Introduced Initiatives • Hour-Ahead Dispatchable Load (HADL) • Spare Generation On-Line (SGOL) • Control Action Operating Reserve • Proposal for Additional Control Action Operating Reserve • Next Steps Market Advisory Council of the IMO

  3. Background • Three pricing issues • pre-dispatch vs. real-time prices • counter-intuitive prices in times of shortage • size, content and variability of uplift • Contributing factors not only give rise to pricing issues, but also: • reduce market efficiency • jeopardize reliability of IMO-controlled grid Market Advisory Council of the IMO

  4. HADL and SGOL • Hour-Ahead Dispatchable Load • 4 participants; ~240 MW registered • activity limited to date; 25 hours; <30 MW/hr • impacts negligible • Spare Generation On-Line • ~2600 MW registered • activity started in mid-September • net market impacts not quantifiable yet, but appears to be having intended effect Market Advisory Council of the IMO

  5. Control Action Operating Reserve - 1 • MW relief that would be realized if control action taken e.g. voltage reduction • Industry accepted source of Operating Reserve • 200 MW introduced early August • 30 minute Operating Reserve price: 30 $/MW • 10 minute non-synchronized Operating Reserve price: 30.10 $/MW • Energy price: 2000 $/MWh Market Advisory Council of the IMO

  6. Control Action Operating Reserve - 2 • Market Impacts (results to September 22) • Increase Average HOEP: range 0.0 -0.4 $/MWh, relative to 49.2 $/MWh actual average HOEP (SGOL offsets) • IOG Savings: 37 k$ (Total IOG Payments 2.5 M$) • Reliability Impacts • No unreliable operation as a result of scheduling CAOR • Increased risk of unreliable operation judged very small • Displaced Market Operating Reserve • ~0.2% of total scheduled OR Market Advisory Council of the IMO

  7. Control Action Operating Reserve - 3 • Requesting IMO Board approval for introducing additional 200 MW (Oct 3 meeting) • same prices and specifications as first 200 MW • implement mid-October • generally supported by MOSC and Technical Panel • Continue to monitor impacts and report to IMO Board and stakeholders Market Advisory Council of the IMO

  8. Next Steps • Additional Control Action Operating Reserve • Remove 200 MW Supplementary Reserve • 12x ramp rate • Pre-dispatch price bands Market Advisory Council of the IMO

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