Transcript CIGRE - Mature Isolated Market

CIGRE - C5 Meeting
Brasília
21 & 22 September 2003
Mature Isolated Market
Charlie Macaulay - General Manager Development & Strategy – NEMMCO
NEMMCO = National Electricity Market Management Company
Slide 1
Topics Covered
• National Electricity Market (NEM) Overview
• NEM Dispatch & Trading Process
• Transmission Interconnectors in the NEM
– Managing Transmission constraints and power system
security
• Transmission Network Planning in the NEM
• Investment Performance in the NEM
• NEM Implementation Process
– Why was Australia successful?
• Future Challenges
Slide 2
Australia’s National Electricity Market
Note: Generation – 2002 projected from
2001 SOO Winter capability.
Energy Sent out – Medium Scenario for
year ending 30 June 2002
Northern Territory
Generation Capacity: 461 MW
Energy Demand: 1,476GWh
Not a member of the NEM
Northern
Territory
Queensland (QLD)
Generation Capacity: 9,401MW
Energy Demand: 41,236GWh
97% Coal, 2% Gas
1% Hydro
Queensland
New South Wales (NSW)
Generation Capacity: 12,270MW
Energy Demand: 66,445GWh
95% Coal, 2% Gas
3% Hydro
Western Australia
South Australia
Western Australia
Generation Capacity: 3,014 MW
Energy Demand: 12,726GWh
62% Coal, 38% Gas
Not a member of the NEM
New South Wales
Australian
Capital Territory
Victoria
Tasmania
South Australia (SA)
Generation Capacity: 3,102MW
Energy Demand: 12,600GWh
16% Coal, 84% Gas
Victoria (VIC)
Generation Capacity: 7,889MW
Energy Demand: 43,715GWh
72% Coal, 22% Gas &
6% Hydro
Australian Capital Territory (ACT)
Comment: Government owned
electricity & water monopoly
(ACTEW). Generation from
Snowy Mountains Scheme &
NSW
Snowy Mountains Scheme (SNOWY)
Generation Capacity: 3,676MW
100.0% Hydro
Tasmania (TAS)
Generation Capacity: 2,503MW
Energy Demand: 10,200GWh
9.6% Oil, 90.4% Hydro
To become a member of the NEM
Slide 3
Installed Capacity & Peak Demand
14000
12000
MW
10000
8000
6000
4000
2000
0
QLD NSW SNO
Installed Capacity
VIC
SA
Average Demand
TAS
Peak Demand
Slide 4
The NEM - Regulatory Framework
National Electricity law
National Electricity
Code
National Electricity Market
Management Co.
(NEMMCO)
•Code Participants
•Generators
•Customers (incl Retailers)
•Network Service Providers
Tribunal
National Electricity
Code Administrator
(NECA)
* ACCC
Franchise
Customers
& NSPs
* ACCC = Australian Competition & Consumer Commission
State Regulators
IPART (NSW)
ESC (Vic)
ESCOSA (SA)
QCA (QLD)
Slide 5
Legislation Governing the NEM
National Electricity
Law
Trade Practices
Act
National Electricity
Code
State Laws
and
Regulations
Slide 6
Electricity Pool
End User
End User
Retail Supplier
End User
End User
Retail Supplier
End User
Market
Customers
Pool
Gen
Gen
Gen = Generators
Gen
All energy traded through Pool – “Gross Pool”
Gen
Slide 7
Typical Offer
$/MWh
For every 1/2 hour
$50
$35
$20
0
250
-$15
350
660
MW
160
Slide 8
Pricing
Offer stacks
Demand
$30
$20
$15
$7
$5
$3
$2
Pool Price
$20
Time
Slide 9
Dispatching Generators
Slide 10
Average Daily Spot Price
A$ per MWh
Year
QLD
NSW
SNO
VIC
SA
2002-03
37.77
32.90
29.82
27.54
30.10
2001-02
35.34
34.76
31.59
30.97
31.61
2000-01
42.19
38.36
37.72
45.39
57.33
1999-00
45.25
28.88
27.79
26.11
60.61
Slide 11
A Day in the NEM
Slide 12
The NEM - Spot Market Design
 5 Regions (Qld separated).
 Constraints between Regions.
 Participants lie within a Region.
 Generators Paid Regional Price.
 Customers Pay Regional Price.
Qld
C
G
NSW
G
G
SA
C
Vic
C
G
Snowy
C
G
Slide 13
Regional Pricing Example
Interconnector constrained to 500MW
Region 1
Demand 1500MW
Dispatch
Stack
Interconnector
capacity
= 500MW
100/$45
100/$40
100/$30
500/$28
500/$27
500/$26
500/$25
Region 2
Demand 550 MW
Slide 14
Regional Pricing Example
Interconnector constrained to 500MW
GEN = 500 MW
Demand = 1500
100/$45
100/$40
100/$30
500/$28
500/$27
500/$26
500/$25
Demand = 550
Slide 15
Regional Pricing Example
Interconnector constrained to 500MW
GEN = 1000 MW
Demand = 1500
100/$45
100/$40
100/$30
500/$28
500/$27
500/$26
500/$25
Demand = 550
Slide 16
Regional Pricing Example
Interconnector constrained to 500MW
GEN = 1500 MW
Demand = 1500
100/$45
100/$40
100/$30
500/$28
500/$27
500/$26
500/$25
Demand = 550
Slide 17
Regional Pricing Example
Interconnector constrained to 500MW
GEN = 2000 MW
Demand = 1500
500 MW
100/$45
100/$40
100/$30
500/$28
500/$27
500/$26
500/$25
Demand = 550
Slide 18
Regional Pricing Example
Interconnector constrained to 500MW
GEN = 2000 MW
Price = $28
500 MW
Demand = 1500
100/$45
100/$40
100/$30
500/$28
500/$27
500/$26
500/$25
GEN = 50 MW
Price = $40
Demand = 550
Slide 19
Regional Pricing Example
Interconnector constrained to 500MW
GEN = 2000 MW
Price = $28
500 MW
Demand = 1500
100/$45
100/$40
100/$30
500/$28
500/$27
500/$26
500/$25
GEN = 50 MW
Price = $40
Demand = 550
$30 gen not used
Constrained off
by network limit
Slide 20
Spot Market Trading in the NEM
Slide 21
Settlement Residue Auctions
Slide 22
Hedge Contracts
Slide 23
Transmission Interconnectors in
Australia’s National Electricity Market
Slide 24
Regions and the Reference Node
Actual Network
Market Model
G
L
G
L
L
Reference
Nodes
G
Pa
G
Interconnector
L
Regional
Boundary
G
G
G
L
L
G
L
L
Pb
G
G
G
Generator
L
Load
Price
Slide 25
Factors Influencing Interconnection
Capability
Definition of
NCAS
Transmission
Credible
Dispatch
Investment
Contingency
System
Demand
Network
Support
Contracts
Power flow
Limit and
Dispatch
Constraints
Transmission
Outages
Generation
Bidding
Behaviour
Equipment
Ratings
Power flows on
Other
Interconnectors
Slide 26
Example of Interconnection Limit
The import limit equation with a 50 MW operating safety margin and assuming
replacement generation comes from north of Snowy is:
Import Limit
= + 785
+ 0.73*Snowy generation
- 4.6E-5*(Snowy generation)**2
+ 0.2*(Snowy rated online capacity excluding syncons - Snowy generation)
+ 80 for each T3 unit syncon
+ 40 for each M1-10 unit syncon
+ 50 for each M11-14 unit syncon
+ 30 for each T1-T2 unit syncon
- 1.1*Wagga area load (MW)
- 0.55*Wagga area capacitors o.o.s. (MVAr)
+ adjustment for Murray/Tumut generation split
+ (500 - largest Vic generating unit output)
+ (largest Vic generating unit output - 500)*0.75 ONLY if largest unit output
>500MW
Slide 27
Load
Forecasts
Bids / Offers
Generic
Equations
Stability etc
for Transmission
Network
Ancillary
Service
Requirements
5 minute ex-ante prices
30 minutes prices
Energy Dispatch
Ancillary Services,
Real Time
Security
Monitoring,
Real Time Power
System Data
Pre-dispatch
Dispatch
Instructions
to Generators
Participants
Generators
Dispatchable
Loads
Override
Constraints
Participants
Contingency
Network Analysis
Verify Security
Publish
Estimates
Pool Price etc
Grid Control
Instructions
NSPs
Generators
INTERACTION BETWEEN DISPATCH & POWER
SYSTEM SECURITY
No
Security
O.K.
Yes
National Dispatch and Security
Centre - “NDSC”
Responsibilities:
Oversight of Market;
Oversight of Power System
Generation Dispatch & Control
NEMMCO NDSC Security Monitoring
Co-Ordination of Operations
among Regions
SYD BRIS
Control System Facilities:
Market System
Dispatch and Security System (DSS)
Operating
Procedures &
Interface Standards
Transmission
Network
Service
Provider
Control System
Facilities
Transmission
Network
Service
Provider
Responsibilities:
Switching Operations
Regional Data Acquisition
Local System Security
Generators
Slide 29
Investment Performance
Generator Projects
Date
Region
Generator
Type
Increase in
capacity
Cumulative
increase
1999
Queensland
Roma PS
Peaking
74 MW
74 MW
2000
Queensland
Oakey PS
Peaking
320 MW
394 MW
2001
Queensland
Callide Power Plant
Base load
840 MW
1234 MW
2001
NSW
Redbank PS
Base load
150 MW
1384 MW
2001
SA
Ladbroke Grove
Intermediate
86 MW
1470 MW
2001
SA
Pelican Point
Intermediate
487 MW
1957 MW
2001-02
Victoria
Bairnsdale
Peaking
86 MW
2043 MW
2002
Queensland
Millmerran PS
Base load
863 MW
2906 MW
2002
SA
Hallett PS
Peaking
180 MW
3086 MW
2002
SA
Quarantine PS
Peaking
96 MW
3182 MW
2002
Victoria
Loy Yang A3
uprating
Base load
40 MW
3222 MW
2002
Victoria
Valley Power
Peaking
300 MW
3522 MW
2002
Victoria
Somerton PS
Peaking
150 MW
3672 MW
2002
Queensland
Swanbank E
Intermediate
385 MW
4057 MW
2003
Queensland
Tarong North
Base load
450 MW
4507 MW
Slide 30
Investment Performance
Interconnection Projects
Date
Between regions
Interconnector
Increase in capacity
2000
NSW and Qld
Directlink
+/- 180 MW
2001
NSW and Qld
QNI
+/- 1000 MW
2002
Victoria and SA
Murraylink
+/- 220 MW
2002-03
Snowy and Vic
SNOVIC upgrade
400 MW into Vic
2003
Tasmania and Vic
Basslink
480 MW nominal
2003-04
NSW and SA
SNI
+/- 250 MW
Slide 31
Summary
– Success of NEM - WHY?
• Evolutionary design process based on experience of
earlier State markets.
• Rigorous project management and end to end testing
before decision to go live.
• Market operates largely as expected.
• Market is delivering new investments in generation and
network.
Slide 32
Future Challenges
• Jurisdictional (State Government Concerns)
– More Efficient Regulation – National rather than State
based approach
– Improvements in processes for building new
Transmission Interconnectors
• Including Improvements for trading across interconnectors
(Firm Transmission Rights)
Slide 33
Future Challenges
• General:
– Will market continue to deliver new investments required to meet
peak demands?
– Need to reduce financial prudential requirements (AUD$1.5 billion
in bank guarantees held by NEMMCO to guarantee spot market
payments to generators)
• Offsetting over the counter (OTC) contracts against spot market
exposures
• Exchange traded financial instruments (futures)
• “Common Clearing”
– Expansion of Demand Side Management
– Need to incorporate large scale windpower projects
– Reduce market transaction costs
• Business to Business (B2B) communication and business process
protocols
Slide 34