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Update on Demand Resource Participation in New Englands Forward Capacity Market Henry Yoshimura Demand Resources Department ISO New England, Inc. Holyoke,

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Presentation on theme: "Update on Demand Resource Participation in New Englands Forward Capacity Market Henry Yoshimura Demand Resources Department ISO New England, Inc. Holyoke,"— Presentation transcript:

1 Update on Demand Resource Participation in New Englands Forward Capacity Market Henry Yoshimura Demand Resources Department ISO New England, Inc. Holyoke, Massachusetts February 17, 2008

2 © 2008 ISO New England Inc. 2 Forward Capacity Market Objectives Procure enough capacity to meet New Englands forecasted demand and reserve requirements three years into the future. Use a competitive Forward Capacity Auction (FCA) to determine how much to buy, which resources to buy, and how much to pay. –Select a portfolio of Supply and Demand Resources through a competitive descending-clock auction process. –Pay the selected Supply and Demand Resources the market- clearing price subject to performance incentives and penalties. –Provide a long-term (up to 5 year) commitment to Supply and Demand Resources to encourage investment.

3 © 2008 ISO New England Inc. 3 Resources Eligible to Participate in FCM Supply Resources –Traditional Generation (Oil, Coal, Natural Gas, Nuclear) –Intermittent/Renewable Generation (Hydro, Wind, Solar) Demand Resources –Installed measures resulting in additional and verifiable reductions in end-use demand on the electricity network in New England. Energy Efficiency Load Management Distributed Generation Demand Response

4 © 2008 ISO New England Inc. 4 Highlights of FCA #1 The objective was to secure 32,305 MW for the six-state New England region in the 2010 to 2011 timeframe. 39,155 MW of qualified new and existing demand- and supply-side resources competed. The auction ran eight rounds, starting 2/4/08 and ending 2/6/08. Bidding started at $15.00/kW-month and systematically decreased through each successive round. The floor price for this auction was reached in the eighth round, with a remaining excess supply of 2,047 MW. The final clearing price for the entire New England region was $4.50/kW-month.

5 © 2008 ISO New England Inc. 5 FCA #1 Results: New and Existing Supply and Demand Resources by State (in MW)

6 © 2008 ISO New England Inc. 6 Whats in Store for FCA #2? Active interest and involvement in FCM continues. Over 15,800 MW of new resources have expressed interest in participating in the second FCM auction, scheduled for December –Over 14,000 MW of new supply-side resources from traditional generation resources, renewables and imports. –Over 1,800 MW of new demand-side resources. Considerable momentum behind FCM to fulfill New Englands long-term electricity needs.

7 © 2008 ISO New England Inc. 7 Observations Demand Resources are a significant and growing proportion of New Englands total capacity. –A substantial amount of Demand Resource capacity cleared in FCA #1: 2,554 MW. –More New Demand Resources cleared (1,188 MW) compared to New Supply Resources (626 MW) in FCA #1. –Interest in participating in FCA #2 among New Demand Resource projects continues to be substantial: 1,800 MW. 73 percent of Demand Resources clearing FCA #1 were demand response resources; the balance was mostly energy efficiency and permanent load management. Few distributed generation measures competed in FCA #1. The large amount of demand response resources clearing in FCA #1 and expressing interest in FCA #2 intensifies the operations and planning issues (subject of earlier panel).


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