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Market Pricing Issues: Update

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pre-dispatch vs. real-time prices. counter-intuitive prices in ... Any new issues should be identified to the IMO prior to the June 18th MOSC for incorporation. ... – PowerPoint PPT presentation

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Title: Market Pricing Issues: Update


1
Market Pricing Issues Update
Darren Finkbeiner, IMO
Document ID
MAC-03-02
2
Background
  • Three pricing issues
  • pre-dispatch vs. real-time prices
  • counter-intuitive prices in times of shortage
  • size, content and variability of uplift
  • Contributing factors not only give rise to
    pricing issues, but also
  • reduce market efficiency
  • jeopardize reliability of IMO-controlled grid

3
Given That
  • Maintaining status quo is not acceptable
  • pricing signals and outcomes
  • reduced market efficiency
  • reliability at risk
  • Supply is tight in Ontario for foreseeable future
  • Market structure schedules just enough
    resources to meet market demands
  • Significant increase in average HOEP may cause
    hardship to load customers
  • then.

4
Proposed Integrated Approach
  • Objective
  • Provide understandable market prices, improve
    efficient operation of IMO-administered Markets
    and reliable operation of IMO-controlled Grid
  • Strategy
  • Reduce frequency of need for control actions,
    then change manner in which control actions are
    utilized i.e. put out-of-market sources of
    Operating Reserve in the market
  • Staging of initiatives

5
Summary of Stages
  • Stage 1 (already underway)
  • 4-2 window HADL additional market information
  • Stage 2 (under development)
  • reduce failed transactions
  • spare generation on-line
  • Stage 3
  • additional supply (return of nuclear units)
  • Stage 4
  • put out-of-market OR into the market (price qty)

6
Requirements and Schedule for Implementation
  • Reduction in failed transactions (June)
  • Increased supply of at least 1600 MW (June/July)
  • Bring Available Spare Generation On-line
    (mid-summer)
  • Offer out of market sources of Operating
    Reserve in the market at specific prices
    (mid-summer)

7
Trade-Offs and Consequences
  • Address Pricing Issues, Efficiency Reliability
    but..
  • Potential for not scheduling market sources of
    Operating Reserve
  • Potential for reduced generator revenues
  • Potential for reduced market value of flexible
    generation
  • Potential for increased utilization of control
    actions
  • Question To what extent are these trade-offs
    and/or consequences acceptable?

8
MAC Input Support
  • The Pricing Issues have been identified as the
    highest priority amongst the participants and the
    IMO.
  • We encourage you and your staff to attend the
    MOSC meetings where these issues and
    implementation details will be resolved.
  • Any new issues should be identified to the IMO
    prior to the June 18th MOSC for incorporation.

9
Next MOSC Meeting
  • June 18th, 2003
  • Additional information including discussion
    materials and agenda will be available at
  • www.theimo.com/imoweb/consult/mktOps_sc.asp
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