Capacity Market

METU
Capacity Market
Capacity Market
EE 710 Electricity Trading, Electrical and Electronics Eng. Dept., METU, Spring 2005, Prof. Dr. Osman SEVAOLU, Page 1
METU
Capacity Market
Operating Reserves
Main Duty of the System Operator

Main duty of the system operator is to keep operating the system always in normal and secure operating state by maintaining supplydemand balance
Basic principle for maintaining supplydemand balance: The system operator must always have a sufficient amount of operating reserve against sudden unexpected contingencies
METU
Capacity Market
Generation System: Operating reserve in terms of demand;
Supply-Demand Balance and Operating Reserves

Operating reserve is measured in terms of percentage of the overall generating capacity in the system Minimum Limits for Operating Reserve: In Planning: In Operation: 10-30 10 % %
Units in service 300 MW 100 MW Operating reserve
300 MW
METU
Capacity Market
Types of Operating Reserves
Generation System: Operating reserve in terms of demand
In principle operating reserves may be classified in two groups; Hot operating reserves, those plants, which is kept ready to put in service immediately, Cold operating reserves, those plants, which is kept ready, but can be put in service within 10-60 minutes, following the order Keeping a plant as hot or cold operating reserve is something that incurs a cost to the party who benefits from this service
Units in service 300 MW 100 MW Operating reserve
300 MW
METU
Capacity Market
Operating Reserve Markets
Units in service 3 x 100 MW 2 x 100 MW Operating reserves
Ordering of Operating Reserves Plants in Operating Reserve Market are ordered with respect to their; Full or partial capacity kept in operating reserve state, Quickness of response: time duration needed for the plant to get into service following the order (fuel type and being in hot or cold states determines quickness), Sureness in availability: Certainity in availability (price will depend upon this certainity)
300 MW
METU
Capacity Market
Cost of Operation Reserves
Terms in Operating Reserve Cost

In principle, cost of an operating reserve is the same as capacity cost, which comprises of two components; Fixed Capacity Cost, Variable Capacity Cost Varible Capacity Cost here, however, unlike the one that has been described earlier, does not include the fuel cost,
METU
Capacity Market
Terms in Operating Reserve Cost

In principle, cost of an operating reserve is the same as capacity cost, which comprises of two components; Fixed Capacity Cost, Variable Capacity Cost Varible Capacity Cost here, however, does not include the fuel cost
METU
Capacity Market
Variable Capacity Cost - VCC
Variable Capacity Cost - VCC of a plant is the same as the Operation and Maintenance Cost, i.e. VCC = OPC + MC = OMC where, VCC is the Variable Capacity Cost, OPC is the Operation Cost, OMC is the total Operation and maintenance Cost, MC is the Maintenance Cost Like Fixed Capacity Cost, VCC is measured in terms of; $ / MWh or $ / kWy
METU
Capacity Market
Cost of Operation Reserves Average Capacity Cost
Fixed Capacity Cost - FCC and Variable Capacity Cost - VCC of a plant may be combined to yield the average capacity cost of a plant;
ACK = FCC + VCC . c or y = b + ax

where, ACk is the average capacity cost of the plant in $ / MWh or in $ / kWy, FCC is the Fixed Capacity Cost, VCC is the Variable Capacity Cost, cf is the combination coefficient, called the capacity factor
Note that Fuel Cost term -FUC does not exist in VCC
METU
Capacity Market
The Effect of Operating Reserves on Competition

Minimum Operating Reserve Requirement In principle, a competitive market requires an environment, where the available capacity exceeds demand It is widely accepted practice that when the available capacity exceeds demand by only 10 %, a competitive market will be established and it will be possible to keep the price of the most expensive generation at 100 USD / MW, i.e. 10 Cents / kWh level In that respect, Operating Reserves may be regarded as available excess capacity
METU
Capacity Market
The Effect of Operating Reserves on Price
Minimum Operating Reserve Requirement

In principle, a competitive market requires an environment, where the available capacity exceeds demand so that the customer has a chance for choice It is widely accepted practice that when the available capacity exceeds demand by only 10 %, a competitive market will be established and it will be possible to keep the prices of the most expensive generations at 100 USD / MW, i.e. 10 Cents / kWh level In that respect, Operating Reserves may be regarded as available excess capacity
Karakaya HPP, 188 MW
METU
Capacity Market
Price Spikes
Peak level Total Demand (MW)
As consumption increases with respect to daily load curve, supply becomes tighter System operator then finds himself in a difficult situation that the operating reserves run short and he can no longer maintain 10 % operating reserves The system operator then starts offering higher prices for both the committed plants and reserves, driving up the prices In other words, prices follow a trajectory (not exactly but) similar to the daily loading curve
Winter
Summer
Off-Peak level
Time (Hours)
METU
Capacity Market
Price Spikes
Peak level Power Demand (MW)
The last alternative is rather severe, and may induce some legal consequences against the customer (utility) Hence the utility must compare the legal consequences and penalties to be arised and the price of electricity Before deciding on load shedding
Price paid by the system operator to operating reserves committed real-time sets an upper limit on price in the market High prices in Forward Agreements (Hedging) induce investment
Winter
Summer
Off-Peak level
Time (Hours)
METU
Capacity Market
Price Spikes
Peak level Power Demand (MW)
In case the operating reserves run short and prices drive up, customers (utilities) confront with three alternatives; Letting the system operator purchase power for them in real-time in terms of real-time spot prices, Making Forward Agreements (Hedging) with suppliers and purchase power from those suppliers, in order not to be influenced by price spikes, Shedding the load within the period the price is high
Winter
Summer
Off-Peak level
Time (Hours)
METU
Capacity Market
Self-Provision of Operating Reserves
Trakya Natural Gas Plant 477 MW
What is Self-Provision ? Self-provision is condition of providing both energy and operating reserve services by the same plant There are two types of operating reserves in terms of their sources; Independent plants exclusively kept, committed and operated as operating reserves. In this case, commercial operating reserve service is provided only by these plants, Self-providing plants with a certain percantage of their capacity kept and sold as operating reserve to system operator (not to costumers !).
Each self-providing plant participates in operating reserve service by its own percentage
METU
Capacity Market
The need for Self-Provision
Kdz. Ereli Natural Gas Plant
Why self-provision is preferred ? Plants may not be fully convinced that a commercial operating reserve service will work properly, when needed, They may not be satisfied with the some aspects of the service, such as; quality, price, quickness and readiness, Plants may be in difficulty in selling some part of their production within some operating periods, so that they may prefer to offer the capacity corresponding to this part as operating reserve
METU
Capacity Market
A Simple Criterion for Self-Provision
Criterion Kemerky
P = 630 MW, Capacity = 2392 GWh (1999), 2922 GWh (2000)
Self provision is to be preferred, when; There is a surplus capacity that can be sold in terms of either; a) energy or b) capacity
METU
Capacity Market
A Simple Criterion for Self-Provision
Criterion
Self provision is to be preferred, when;

Profite < Profitc where, Profite =Pe (Pc + Penergy + PO&M ) Profitc =Pnl (Pc + PO&M ) or Pe (Pc + Penergy + PO&M ) < Pnl (Pc + PO&M ) or Pe Penergy < Pnl where, Profite and Profitc are profits to be earned by electricity an capacity trading, Pe, Pc, Penergy, Po&m, Pnl, are electricity, capacity, energy, operating and maintenance, and the no-load operating prices, respectively
METU
Capacity Market
Pricing of Operating Reserves
Factors Determining Price of Operating Reserve Factors determining price of operating reserve service are; Capacity factor (percentage of rated power x duration of allocation), Quickness of response, Certainity of availability, Certainity of order, Early ordering, Start-stop expenditures of the plant Units of operating reserve service is the same as that of energy, i.e. kWh or MWh, as it depends both on capacity allocated (MW) and duration (h)
METU
Capacity Market
Allocation Factor Defininiton
Allocation Factor is a measure of the percentage of capacity service allocated to customer Allocation Factor is expressed as; = ( P / Pr ) * ( t / T ) (unitless)
where, is the allocation factor, P is the power allocated to customer, Pr is the total rated power of the plant, t is the total duration of service (hours), T is the overall duration of the availability of plant (hours)
METU
Capacity Market
Capacity Factor Defininiton
4000
Capacity Factor is the ratio of the total energy supplied to the total capacity allocated Capacity Factor may be expressed as;
c = total energy supplied/total capacity allocated(a.f. x rated power) = P(t) dt / (a.f. x rated power) = Area under the curve / overall rectangular area = Area under the curve / 4000 x 24 where, energy supplied is the total energy supplied during the allocated service period, total capacity allocated = a.f.xrated power
Total Demand P(t) (MW)
3500
3000
2500
2000
1500
1000
Energy supplied
500 0 0 2 4 6 8 10 12 14 16 18 20 22 24
Time (Hours)
METU
Capacity Market
Capacity Factor
Defininiton
Capacity factor is not a concern for the producer at all. The producer simply allocates the ordered and committed portion of the plant and does not concern whether this portion is properly utilized by the consumer or not. Proper utilization of this portion is merely a problem of the consumer. In other words, capacity factor is a problem of the customer, allocation factor is a problem of the supplier.
4000
3500
3000
2500
2000
1500
1000
Energy supplied
500
0 0 2 4 6 8 10 12 14 16 18 20 22 24
Time (Hours)
METU
Capacity Market
Capacity Factor Example
4000
Capacity Factor of the load shown on the right hand side may be expressed as;
c = total energy supplied / total capacity allocated(a.f. x rated power) = P(t) dt / (a.f. x rated power) = Area under the curve / overall rectangular area = Area under the curve / 4000 x 24 = 65 000 MWh / 96 000 MWh = 0.94
3500
3000
2500
2000
1500
1000
Energy supplied
500
0 0 2 4 6 8 10 12 14 16 18 20 22 24
Time (Hours)
METU
Capacity Market
The Effect of Allocated Capacity
160 150 140 130 120 110 100 90 80 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 Allocated Capacity (%)
Percentage price(*) of operating reserve per MW decreases as the allocated capacity increases
-------------------------------(*) (Price / Nominal Price) . 100 (%)
Plant owner prefers higher allocated capacities, since fixed and variable costs of service decrease with the rating (size) of the plant
Principle of Economies of Scale
Percentage Price (Cent/kWh)
The Effect of Capacity Factor on Price
METU
Capacity Market
The Effect of Quickness of Response
Percentage Price (Cent/kWh) 150 140 130 120 110 100 90 80 70 0.8 1.2 1.6 2.0 2.4 2.8 3.2
The Effect of Quickness of Response Quickness of response requires high flexibility and readiness of the plant which increases the price
T = 1.6 T = 3.16
101.6 = 40 minutes 103.16 minutes = 1 day
Log (Response Time) (minutes)
METU
Capacity Market
The Effect of Certainity of Availability
Percentage Price (Cent/kWh) 100 95
The Effect of Certainity of Availability Certainity of availability (Sureness) is a parameter influencing the price of service Price of an operating reserve increases with the certainity of availability
90
85
80
75 70 0.75 0.80 0.85 0.90 0.95 1.00
Certainity of Availability (%)

METU
Capacity Market
What is Certainity of Availability ?
Operating Reserve Group
Cascade operating reserve service with 98 % availability (Please note that, Customer-B may not receive full operating reserve service when CustomerA is serviced)
Certainity of Availability Assume that the operating reserve group shown in the figure has made an agreement with Customer-A on the basis of definite availability, i.e. 100 % availability Assume that the contingency risk of this customer needing this operating reserve service is only 2 %, i.e. the probability of not needing this operating service is 98 % Hence, it is possible to make a simultaneous (cascade) agreement with Customer-B on the basis of 98 % availability, at a reduced price
Operating reserve service with 100 % availability
Supplier
Transmission System
Transmission System
R-1 Op. Reserve Market - 1
Customer-A
Customer-B
METU
Capacity Market
The Effect of Certainity of Order
140 Percentage Price (Cent/kWh)
The Effect of Certainity of Order Certainity of order (probability of ordering) is a parameter influencing the price of service Price of an operating reserve decreses as the uncertainity of order is reduced
130
120
110 100
90
80 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1
Certainity of Order (%)

METU
Capacity Market
The Effect of Early Ordering
150 Percentage Price (Cent/kWh) 140 130 120 110 100 90 80 70 1.0 1.5 2.0 2.5 3.0 3.5 Log (early ordering period) (minutes)
The Effect of Early Ordering Early ordering provides plant operator chance to make a schedule for plant allocation which reduces the price
T = 1.0 T = 3.25
101 = 10 minutes 103.25 minutes = 29 Hours
METU
Capacity Market
Superposition of Capacity Services
Total Demand P(t) (MW) 40 35 30 25 20 15 10 5 0 2 4 6 8 10 12 14 16 18 20 22 24 2 4
Superposition of Capacity Services Capacity services supplied to two or more customers may be joined together gaining economy in the installed capacity of the operating reserve
Time (Hours)
Demand (Capacity) requested by the first customer
Demand (Capacity) requested by the second customer
Total Demand = 40 + 40 = 80 MW
METU
Capacity Market
Total Demand P(t) (MW) 90 80 70 60 50 40 30 20 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Please note that, the loads are diversived, hence their total does not make 80 MW, i.e. (P1 + P2) (t)max < P1 (t)max + P2(t)max Implying that the supplier does not need to supply the sum of the maximum demands, but maximum of sum of demands, which is more economical in terms of investments
P1 (t) + P2 (t)
P2 (t)
P1 (t)
Total Demand (Capacity) 76 MW < 80 MW

METU
Capacity Market
Linkage among Operating Reserve Markets
Operating Reserve Group -1 Operating Reserve Group -2 Operating Reserve Group -3
If no linkage is established among operating reserve markets, they will function simultaneously, but separately This type of architecture results in higher prices, since unsold services in one market can not flow into the others An unsold operating reserve service is nothing but keeping the plant idle, i.e. just waste of resource
Supplier - 1
Supplier - 2
Supplier - 3
Transmission System
R-1 Op. Reserve Market - 1 R-2 Op. Reserve Market - 2 R-3 Op. Reserve Market - 3
Customer-1
Customer-2
Customer-3
METU
Capacity Market
Cascade Linkaging of Operating Reserve Markets

Forward Cascading If linkage is established among operating reserve markets, then will function simultaneously, and unsold services will flow from one market to the others, thus lowering the prices In this case, markets are cleared in sequence, starting from the one with the highest quality (price) Any surplus service in one market will flow to the other markets at a reduced price in a sequence
Surplus Service Flow
Supplier - 1
Supplier - 2
Supplier - 3 Transmission System Linkage Regions
Transmission System Linkage Regions
Transmission System
Customer-1
Customer-2
Customer-3
METU
Capacity Market
Some Practical Problems in Cascade Linkaging

If there is a shortage in the last reserve market R-3, but not in the others, then price in R-3 may rise to a level above the prices in R-1 and R-2 Markets R-1 and R-2 on the other hand are already cleared at a lower price
Inefficient utilization of operating reserves
Supplier - 3 Transmission System
Customer-1
Customer-2
Customer-3
METU
Capacity Market
Solution: Merger of Operating Reserve Markets

Merger of Op. Reserve Markets The ideal solution is to: increse the strength of internal linkages, merge all operating reserve markets in a single market More efficient, but more complicated and difficult to operate The extreme model is to merge the resulting operating reserve market with the energy market forming a single complicated market
Supplier - 1
Supplier - 2
Supplier - 3
Transmission System
R-1 Op. Reserve Market - 1 R-2 Op. Reserve Market - 2 R-3 Op. Reserve Market - 3
Regions
Regions
Customer-1
Customer-2
Customer-3
METU
Capacity Market
Can Balancing and Settlement Service be used as Operating Reserves ?

Answer The answer is No In principle, operating reserve services; extend longer-terms, such as few months to few tears, are relatively cheaper, are received on the basis of contracts while, balancing and settlement services; are short term services, are relatively much more expensive, are received from the spot market without any contract
Operating Reserve Group -1 Surplus Service Flow Operating Reserve Group -2 Surplus Service Flow Operating Reserve Group -3
Supplier -1 Transmission System R-1 Op. Reserve Market - 1 Linkage Regions Customer-1
Supplier -2 Transmission System R-2 Op. Reserve Market - 2 Linkage Regions Customer-2
Supplier -3 Transmission System R-3 Op. Reserve Market - 3 Customer-3
TETAS P = Pgen - P load
EUAS
Wholesale Company
Load
Transmission System
Distribution System
Pgen
Pload
METU
Capacity Market
Price Spikes (NYISO) (15.01.2005)

As consumption increases with respect to daily load curve, supply becomes tighter System operator then finds himself in a difficult situation that the operating reserves run short and he can no longer maintain 10 % operating reserves The system operator then starts offering higher prices for both the committed plants and reserves, driving up the prices In other words, prices follow a trajectory (not exactly but) similar to the load duration curve
Average Real-Time Prices within one-year Period
Hours
2001
2002
2003
Please note that; Price curves follow a pattern similar to those of the load duration curves, i.e. Prices are lower during night periods and higher during evening periods Prices were higher in 2003 due primarily to higher fuel costs,
METU
Capacity Market

Minimum Operating Reserve In principle, a competitive market requires a an environment, where the available capacity exceeds demand Excess capacity is provided in terms of operating reserves Birecik HPP, 630 MW Spillway
METU
Capacity Market

Minimum Operating Reserve It is a widely accepted practice that when the available capacity exceeds demand by only 10 -15 %, a competitive market will be established and it becomes possible to keep the price of the most expensive generation at 100 USD / MW, i.e. 10 Cents / kWh level In that respect, operating reserves may be regarded as available excess capacity Birecik HPP, 630 MW

Capacity Market

Enviado por

Dados do documento

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Capacity Market

Enviado por

Direitos autorais:

Formatos disponíveis

METU

Main Duty of the System Operator

Supply-Demand Balance and Operating Reserves

Units in service 300 MW 100 MW Operating reserve

Terms in Operating Reserve Cost

Terms in Operating Reserve Cost

ACK = FCC + VCC . c or y = b + ax

The Effect of Operating Reserves on Competition

Minimum Operating Reserve Requirement

Karakaya HPP, 188 MW

Self provision is to be preferred, when;

Total Demand P(t) (MW)

Total Demand P(t) (MW)

Percentage Price (Cent/kWh)

The Effect of Capacity Factor on Price

101.6 = 40 minutes 103.16 minutes = 1 day

Log (Response Time) (minutes)

75 70 0.75 0.80 0.85 0.90 0.95 1.00

Certainity of Availability (%)

R-1 Op. Reserve Market - 1

R-2 Op. Reserve Market - 2

80 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

Certainity of Order (%)

101 = 10 minutes 103.25 minutes = 29 Hours

Demand (Capacity) requested by the first customer

Demand (Capacity) requested by the second customer

Superposition of Capacity Services

Total Demand (Capacity) 76 MW < 80 MW

Cascade Linkaging of Operating Reserve Markets

Surplus Service Flow

Surplus Service Flow

Supplier - 3 Transmission System Linkage Regions

Transmission System Linkage Regions

R-1 Op. Reserve Market - 1

R-2 Op. Reserve Market - 2

R-3 Op. Reserve Market - 3

Some Practical Problems in Cascade Linkaging

Surplus Service Flow

Surplus Service Flow

Supplier - 1 Transmission System Linkage Regions

Supplier - 2 Transmission System Linkage Regions

Supplier - 3 Transmission System

R-1 Op. Reserve Market - 1

R-2 Op. Reserve Market - 2

R-3 Op. Reserve Market - 3

Solution: Merger of Operating Reserve Markets

Can Balancing and Settlement Service be used as Operating Reserves ?

Supplier -3 Transmission System R-3 Op. Reserve Market - 3 Customer-3

TETAS P = Pgen - P load

Price Spikes (NYISO) (15.01.2005)

Average Real-Time Prices within one-year Period

The Effect of Operating Reserves on Competition

The Effect of Operating Reserves on Competition

Você também pode gostar