Transcript Ontario Electricity Outlook

Ontario Electricity Supply Forum
PEO Mississauga Chapter - September 6, 2007
Rhonda Wright-Hilbig, P.Eng
Market Analysis - IESO
The IESO’s Role Within the Industry
• There are a number of different entities but all of them have
their own set of accountabilities and defined responsibilities
• The IESO manages Ontario's electricity grid - directing the
flow of electricity across the transmission system to meet the
province's power needs
• We balance this demand for electricity against available
supply through the wholesale market
The Electricity Markets
Ontario’s Electricity Market
• Approximately:
– 30,000 MW installed capacity
– 28,000 km high voltage transmission system
– 250 authorized market participants
• Anyone connected to high voltage grid must
become an IESO market participant
• Anyone connected to a Local Distribution
Company (LDC) has a choice to become an IESO
market participant or participate retail market
The Markets
IESO - Administered Markets
Financial
Physical
Real-time
Energy
Operating
Reserve
Procurement
Transmission
Rights
Ancillary
Services
Electricity Sector Participants
Directly Connected
Large Consumer
Transmitters
Retailers
Directly Connected
Generator
Embedded Large
Customer
Wholesale
Price
Embedded
Generator
Low Volume
End-use
Consumer
Participants
Outside
Ontario
RPP
Designated
Consumer
Local Distribution Company Network
Types of Market Participants
DISPATCHABLE
NON-DISPATCHABLE
Submit bids/offers
Do not submit
bids/offers – accept
market price
Adjust operations
based on dispatch
instructions received
from the IESO
Consume or produce as
desired – no dispatch
instructions
Bid and Offer Basics
Generators and
Imports
Offers
IESO Administered
Markets
Real-time
Energy
Bids
Loads and
Exports
Price/Quantity Pairs - Offers
Price
($/MWh)
$26.00
(20.5,0) (20.5,20)
(21.6,40)
(22,60)
(23,80) (24,100) (24.5,120)
$24.00
$22.00
$20.00
$18.00
0
20
40
60
Quantity (MW)
80
100
120
Setting the Market Clearing Price
Supply and Demand Determines Price
Supply
Demand
Optimum Selling Price
Quantity
Price
Demand Varies Considerably
Ontario Demand by Day of the Week for typical October Week
21000
20000
Time
of
Day
Weekend vs.
Weekday
19000
18000
17000
16000
15000
14000
13000
12000
Sun.
Mon.
Tues.
Wed.
Thurs.
Fri.
Sat.
Move to a Summer
Peaking Jurisdiction
28,000
Summer Peak Demand
Winter Peak Demand
27,000
Peak Ontario Demand (MW)
26,000
25,000
24,000
23,000
22,000
21,000
20,000
1994
1996
1998
2000
Year
2002
2004
2006
Setting the Market Clearing Price
Generator 1
Generator 3
150 MW - $38/MWh
50 MW - $25/MWh
100 MW - $15/MWh
Generator 2
50 MW - $20/MWh
Offers Are Selected
Economically
250 MW
$38 / MWh
200 MW
$25 / MWh
150 MW
Quantity
$20 / MWh
100 MW
50 MW
12:00
$15 / MWh
13:00
14:00
15:00
Generator 1
16:00
Time
17:00
Generator 2
18:00
19:00
Generator 3
20:00
Demand and Price
250 MW
$38 / MWh
200 MW
150 MW
Quantity
$25 / MWh
Demand
$20 / MWh
$38
100 MW
$25
50 MW
$15 / MWh
$15
12:00
13:00
14:00
15:00
Generator 1
16:00
Time
17:00
Generator 2
18:00
19:00
Generator 3
20:00
Offers and Demand - 5 Minute Intervals
MCP
$25 $25 $25 $25 $25 $25 $25 $38 $38 $38 $38 $38
$ / MWh
250 MW
$38 / MWh
200 MW
$25 / MWh
150 MW
$20 / MWh
100 MW
50 MW
$15 / MWh
16:00 16:05 16:10 16:15 16:20 16:25 16:30 16:35 16:40 16:45 16:50 16:55 17:00
Time
Generator 1
Generator 2
Generator 3
Hourly Ontario Energy Price = $30.42
Determining Dispatch Instructions
Balancing
60 Hz
Supply
Generators + Imports
Demand
Loads + Losses + Exports
Ensure that supply meets demand
within system limits
Security Limits
• Security limits are the reliability envelope in which
the market operates; they protect our grid and our
neighbours’ grids from disturbances
• Energy will take all available paths to get from supply
point to consumption point
• Transmission lines do not control or limit the amount
of energy they convey
• Energy flows are managed by dispatching generator
output
• Different limits are used under different operating
conditions
Prices and Schedules
• Dispatch follows economics as closely as possible
• Can’t dispatch based purely on economics
– The unconstrained mode of the dispatch algorithm determines market
clearing prices and “market schedules” in the absence of transmission
constraints
• “copper plate” model of the grid
• Assumes resources can ramp at three times their offered ramp rates (September 12,
2007)
– The constrained mode of the dispatch algorithm determines dispatch
schedules (i.e., dispatch instructions)
• Respects transmission losses, transmission system limits, ramp restrictions on resources
• When a difference in MW occurs between the economic “market
schedule” and the practical “constrained schedule” market
participants are held whole through Congestion Management
Settlement Credits (CMSC)
• The cost of CMSC is recovered through the IESO uplift to loads
Dispatch instructions
• Dispatch instructions:
– Primary method for controlling the balance of supply
with demand
– Indicate operating point at the end of a 5-minute
interval
– Are sent only if there is a required change in
operating point
– Can be refused for reasons of public or worker safety,
equipment damage, or legal requirements
Imports and Exports
Imports and Exports
Scheduling Imports and Exports
• Imports and exports are scheduled based on economics
compared to internal bids/offers
• Scheduled an hour in advance, scheduled for a one hour
block
• Participants must navigate with other jurisdictions,
including transmission access
• Electricity interchange improves Ontario reliability,
– Imports reduce the price of electricity in Ontario, effectively add
supply
– Exports effectively increase demand; exports can be curtailed in
the event of Ontario shortages
Contact us
• IESO website provides up to date prices
• IESO publications available to help businesses
understand the market
IESO
•1 (888) 448-7777 or
•(905) 403-6900
•[email protected]
Ontario Electricity Supply Forum
PEO Mississauga Chapter - September 6, 2007
Rhonda Wright-Hilbig
Section Head, Market Analysis
September 6, 2007