A Proposal for ICAP Deliverability Requirements

A Proposal for ICAP Deliverability Requirements Presented to NEPOOL PSRAWG Power System Resource Adequacy Working Group by Jerry Ancona, National Grid Springfield, MA March 20, 2003 030320PN.PPT Subsequently Revised: 31-Mar-2003 Overview   Reliability 101 and LOLP Comparison of ICAP Locational Requirements versus ICAP Deliverability Requirements A proposal for ICAP Deliverability  2 Reliability 101 Reliability requires both Resource Availability and Resource Deliverability Resource Availability Deliverability Load Availability is the ability to continually supply energy Deliverability is the ability to transfer energy from resources to loads 3 LOLP – A Measure of Reliability Reliability is measured and planned using a Loss-of-Load Probability (LOLP).     LOLP Criteria: Probability of disconnecting firm load in the Control Area due to a resource deficiency will not exceed one day in ten years LOLP Planning requires that resource adequacy must be sufficient to meet the criteria. LOLP Measurement takes probable operating conditions including transfer capabilities into account. LOLP is affected by both Resource Availability and Deliverability 4 Resource Adequacy   NY has ICAP Locational Requirements PJM has ICAP Deliverability Requirements How do they compare? 5 ICAP Locational Requirements vs. ICAP Deliverability Requirements In theory they are identical … in practice they are not  Inherent assumptions and procedures generally differ Both are intended to produce a reliable Control Area   Locational requirements tend to allow for more variation in reliability between individual sub-area Deliverability requirements tend towards more consistent reliability among individual sub-areas  6 NY Has Three Types of ICAP Locational Requirements 1. Minimum ICAP required within import constrained Localities A and B* 2. Minimum ICAP required within total Control Area (including Localities)** 3. Maximum ICAP allowed from all External Control Areas 2. External Control Areas 3. Rest of Control Area Locality A 2. Locality B 1. * Localities generally have an internal ICAP requirement set administratively and a total ICAP (internal plus external) ICAP requirement ** Internal and total ICAP requirements for overall Control Area are set to meet LOLP Criteria 7 Implications of NY’s Locational Requirements   Reliability of Localities (i.e., the individual LOLP for each) is not necessarily consistent with the reliability for the rest-of-state The ICAP Locational requirement for Localities can theoretically continue to decrease provided the LOLP Criteria for the overall Control Area can still be met after the reliability for all sub-areas is averaged This is analogous to not having to pass all your courses to graduate as long as you have at least a 2.0 GPA versus having to pass all your courses AND having at least a 2.0 to graduate   Corollary I: The better reliability is in rest-of-state, the worse it can be allowed to be in the Localities Corollary II: Inconsistently low ICAP Locational requirements for Localities can increase ICAP requirements for the overall Control Area 8 More NY Implications  Locational requirements that allow below average reliability for a Locality help perpetuate that Locality as a load pocket.  Locational requirements tend to presume that import tie capabilities are fixed – i.e., resource deficiencies can only be solved with additional resources located within the Locality. Locational requirements tend to ignore the problem of bottled generation – worst yet, they could produce the perverse outcome of encouraging additional generation in already bottled areas. Alternately, increasing the import tie capability for a Locality with below average reliability could ultimately reduce its locational requirements thereby maintaining its below average reliability. 9   PJM Has Two Deliverability Tests  Load sub-areas need to have sufficient local resource capacity and/or import capability so as not to reduce Control Area LOLP below criteria. Resource rich sub-areas need to have sufficient export capability Both have minimum acceptable levels which assures more consistent reliability among all sub-areas  10 PJM Deliverability Tests Load Resource Deliverability? Resource Load Export Test 2 Import Test 1 Capacity Rich Sub-Area Capacity Poor Sub-Area 11 PJM More Specifically  Test 1 – Each electrically cohesive sub-area* must meet reliability criteria based upon its available internal capacity and import limits to support the overall Control Area LOLP Criteria. Test 2 – Each sub-area** must be able to export its capacity to other areas at least during peak load periods to ensure capacity is not “bottled” from a reliability perspective.   Test Results – based on PJM’s 2001 Baseline Regional Transmission Expansion Plan (RTEP) for 2002-2006, no deliverability problems are anticipated through the 2006 time-frame. *Previously, reliability sub-areas were each IOU’s service territory. **PJM currently only has “firm capacity” interconnection requirements; no “energy-only/non-firm” interconnection category exists. 12 PJM Actions for Deliverability Test Failures   For New Resources – If a new resource causes a deliverability deficiency – the resource will not be granted full capacity credits until system upgrades are completed to correct the deficiency. Remote Capacity - If deliverability of the Control Area degrades for whatever reason, a Deliverability Test failure may prevent a sub-area from receiving full capacity credit for remote capacity resources intended to be delivered to that sub-area. For the Planning Process - Deliverability test failures trigger the expansion planning process 13  Advantages of PJM Type Deliverability Test    Helps insure more consistent reliability for all sub-areas as well as the overall Control Area Gives indication of impending problems – both load pockets and generator bottlenecks Equal treatment of potential solutions    New local resources Existing remote resources and new transmission New remote resources and new transmission   Encourages solutions that have positive impacts on reliability Encourages solutions that have positive impacts on making markets wider and more competitive and reducing market power 14 A Proposal for NEPOOL   Adopt a PJM type of ICAP Deliverability Requirement rather than ICAP Locational Requirements Allow a transition to the PJM Deliverability Test over a Five Year Transition Period 15 Generators Request Network Resource Designation    Generator requests to be a Network Resource (to be eligible to sell ICAP) Existing generators request at the beginning of the first year New resources must request at the time of their interconnection request  ISO conducts a PJM Deliverability test for the aggregate ICAP designated generators in each zone taking into account already planned transmission system (next slide …) 16 Proposed Deliverability and LOLP Tests* Deliverability Test 1 Deliverability Test 2 LOLP Test Conduct Import Deliverability (Test 1) to determine if each Sub-Area meets minimum requirements** for import capability based upon its available internal capacity resources Conduct Export Deliverability (Test 2) to determine if each sub-area meets minimum requirements** for export capability based upon peak-load conditions Conduct LOLP Test to determine if Control Area meets LOLP criteria Notes: * One-Year Test will be conducted for the upcoming Capability Year (May thru April) to determine cost allocation; also a Five-Year Test will be conducted for the upcoming five Capability Years to benchmark “as found” conditions. **Minimum import and export requirements are based on Control Area LOLP Criteria requirements 17 Results of the Deliverability Test Necessary upgrades for regional ICAP Deliverability of all generators within each zone will be constructed within the transition period. 18 ICAP Eligibility   Current ICAP qualifications for all existing units will continue for 5 years only. During those 5 years, necessary transmission for designated network resources will be constructed 19 Cost Allocation Options for Deliverability Upgrades for Existing Generators A. All Generators within that zone that are designated as network resource allocated the cost pro rata of MW deliverability. B. All generators connected on the minimum interconnection standards within each zone pays pro rata cost (fully integrated generators are exempt) C. All regional load pays for PTF D. 50% per Option B and 50% per Option C E. Minimum interconnection generators pay for zonal export test needs. PTF needed to pass the aggregate generation to load part of the test are rolled in PTF and paid for by all load 20 Cost Allocation Options for Deliverability Upgrades for New Generators Cost allocation for new generators could either be subject to the outcome of the FERC NOPR or any of the options specified for existing Generators above 21 Key Points ICAP Locational Requirements can produce uneven reliability among sub-areas and could encourage ineffective solutions ICAP Deliverability Requirements can produce more consistent reliability among subareas and is more solution oriented NEPOOL should adopt a PJM type of ICAP Deliverability Requirement with a transition period allowed if tests for Deliverability fail Follow-up questions: masheed.rosenqvist@us.ngrid.com or 508.389.2930 22 23