James E. Price

Reduced network modeling of WECC as a market design prototype

Californias administration, legislature, and energy regulators have adopted aggressive targets for renewable energy, which will result in profound changes in markets and system operations as the resource portfolio shifts from heavy reliance on natural gas as a fuel for electric generation to intermittent, often remote resources. As part of determining workable modeling approaches as changes in market design are considered, this paper examines the necessary level of detail for modeling unit commitment. This study utilizes a 240-bus model as a realistic test system for the California and WECC market. Demand response and energy storage technologies are important contributors to the flexibility that will be needed in future markets, and provide an illustration of this analysis.

Recognition of extended dispatch horizons in California's energy markets

Effective in 2009, the California ISO launched a new market structure that combines advanced unit commitment and dispatch processes with recognition of physical characteristics of the transmission system and generation resources. Californias upcoming implementation of aggressive targets for renewable energy will result in new, profound changes in markets and system operations. The CAISO is responding by making additional improvements in its unit commitment processes.

Adapting California's energy markets to growth in renewable resources

Electric power generation is the second-largest category of greenhouse gas emissions in California, next to transportation. Californias administration, legislature, and energy regulators have adopted aggressive targets for renewable energy due to heavy reliance on natural gas as a fuel for electric generation, which will result in profound changes in markets and system operations. The growth of renewable in-state generation involves an increasing reliance on intermittent, often remote resources, which requires new transmission and increases ancillary service requirements. To the extent that achieving Californias renewable energy goals requires imports of intermittent resources, new challenges emerge for coordination among system operators throughout the western states. New reliance on demand response and energy storage technologies are important contributors to solving these issues.

Concepts for a wholesale grid state indicator to enable price responsive demand

The smart grid will enable consumers to configure end-user devices to receive information on energy prices and other system conditions, automatically respond to these signals, and provide savings for consumers. ISOs face new information needs for facilitating these developments, and ISOs and market participants have different roles in the process of getting this information to end-use consumers than those of traditional demand response. The California ISO is implementing processes to publish, on its public website, the information needed to connect wholesale and retail markets by enabling this response by end-use consumer devices, while not requiring formal wholesale market participation.

Dynamic transfers for integration of renewable resources

In May 2011, the California ISO completed an 18-month stakeholder process for updating its policies for integrating dynamic transfers (dynamic schedules and pseudo-ties) in its markets, and in September 2011, received FERC approval for its tariff revisions. Along with revisions that apply to all types of resources, a significant focus of these tariff revisions is to enable dynamic transfers of variable renewable resources (e.g., wind and solar generation). The increasing reliance on renewable generation, to achieve aggressive targets to reduce the current heavy reliance on natural gas as a fuel for electric generation and to reduce emissions of carbon dioxide, presents a variety of emerging challenges in management of Californias transmission grid, electric markets, and system operations. Managing the changes associated with imports of variable resources requires coordination with other system operators throughout the western states, which have differing market structures. The integration of dynamic transfers of variable resources between these markets is being demonstrated through a pilot between the California ISO and Bonneville Power Administration.

Adapting California’s resources to changing regulations

Electric power generation is the second-largest category of greenhouse gas emissions (GHG) in California, next to transportation. Californiapsilas legislature and energy regulators have adopted aggressive controls on the GHG emissions from electricity production, as well as aggressive targets for renewable energy due to heavy reliance on natural gas as a fuel for electric generation. These regulations will change the operational characteristics of Californiapsilas resource mix. There is essentially no coal-fired generation within California, and readily identified coal-fired generation from out-of-state sources represents less than 5% of the energy procurement by the three large investor-owned utilities, although smaller municipal utilities have substantial imports from out-of state coal plants. However, California depends heavily on imports from other states, and the supporting generation is often difficult to identify. Increasing the amount of renewable in-state generation involves increasing reliance on intermittent, often remote resources. This requires new transmission and increases ancillary service requirements. Decreasing the GHG emissions introduces uncertainty as to whether the adopted mechanisms will actually be effective if other states do not adopt similar enforcement mechanisms. If Californiapsilas regulations result in changes to generation dispatch in other states, flows throughout the western region could change. Solving these issues can involve demand response resources (which California is actively developing) in addition to other supply resources.

Benchmarking a reduced test-bed model of WECC region for unit commitment and flexible dispatch

Californias targets for renewable energy result in profound market changes as portfolios shift from natural gas to intermittent, often remote resources. New market products offer needed flexibility to respond to uncertainty in resource output. A 240-bus model provides a test system for the California ISO and WECC market, examining how load management and stochastic unit commitment can deal with uncertainty in demand and intermittent resource output. This model is compared to a full-scale model to validate its use.

Managing california's electric markets in an interconnected regional transmission network

Challenges facing the California ISO as it transitions from a zonal to an LMP-based market that it founded on a Full Network Model for congestion management include both obtaining the most accurate modeling of the western regional energy market and integrating new supply resources, particularly renewable energy. Through simulations of its new market, the California ISO has uncovered needs for modeling of transmission outside its control area. A remaining obstacle has been the modeling of unscheduled loop flow in a context where limited information is available about market schedules outside the ISO, but analyses of modeling for the western regional market show that improvements can occur even with the limited information that is available.

Perspectives on Modeling Market Interactions in face of an evolving resource mix

Despite the knowledge and experience of market operators, consultation with market participants, and approval by regulators, changes in market design do not always have the intended beneficial outcomes. Agent modeling can be a useful approach in validating whether there may be unintended consequences as market participants operate under new market rules. Examples of such outcomes are explored, with insights offered about the modeling requirements. A final example identifies the development of diverse forms of energy storage as an example of developing changes in resource portfolios. In the example of energy storage, ongoing research will seek to compare the results of decentralized decisions for operation of storage with the results of market operator dispatch.