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PJM©2013www.pjm.com Resource Adequacy in PJM Adam Keech Director, Market Operations PJM
PJM© My Background Adam Keech –Worked at PJM for over 10 yrs 8+ years in Market Operations –Manager, Real-Time Market Operations –Director, Market Operations 2+ years in System Operations –Director, Dispatch –Education MS Electrical Engineering from Rutgers University MS Applied Statistics from West Chester University
PJM© PJM as Part of the Eastern Interconnection KEY STATISTICS PJM member companies 800+ millions of people served 60 peak load in megawatts 163,848 MWs of generating capacity185,600 miles of transmission lines 59,750 GWh of annual energy 832,331 generation sources 1,365 square miles of territory214,000 area served 13 states + DC externally facing tie lines % of generation in Eastern Interconnection 28% of load in Eastern Interconnection 19% of transmission assets in Eastern Interconnection 21% of U.S. GDP produced in PJM *Map is missing EKPC zone which joined June 1, 2013 As of 9/7/2012
PJM© PJM Evolution
PJM© PJM Responsibilities Wholesale Electric Markets Regional Reliability Transmission Planning
PJM© PJM Capacity Market PJM Capacity Market is designed to ensure adequate availability of resources that can be called upon to ensure the reliability of the electric grid. PJM Capacity Market Reliability Pricing Model (RPM) Fixed Resource Requirement Alternative (FRR) (opt-out of RPM) PJM secures capacity on behalf of LSEs to satisfy load obligations not satisfied through self-supply. LSE secures capacity to satisfy their load obligation.
PJM© What is the RPM? Reliability Pricing Model (RPM) is PJM’s resource adequacy construct RPM is part of an integrated approach to ensuring long-term resource adequacy and competitively priced delivered energy RPM aligns the price paid for capacity with overall system reliability requirements RPM includes pricing to recognize and quantify the locational value of capacity (effective 2007/2008 Delivery Year) and the operational value of capacity (effective 2014/15 Delivery Year) RPM provides forward investment signals
PJM© Capacity vs. Energy Capacity A commitment of a resource to provide energy during PJM emergency under the capped energy price. Capacity revenues paid to committed resource whether or not energy is produced by resource. Daily product Energy Generation of electrical power over a period of time Energy revenues paid to resource based on participation in PJM’s Day-Ahead & Real-Time Energy Markets Hourly product Capacity, energy & ancillary services revenues are expected, in the long term, to meet the fixed and variable costs of generation resources to ensure that adequate generation is maintained for reliability of the electric grid.
PJM© RPM Structure Base Residual Auction Delivery Year 3 Years Second Incremental Auction Third Incremental Auction May 31 3 months 10 months First Incremental Auction 20 months EFORd Fixed Ongoing Bilateral Market Interruptible Load for Reliability (ILR) (Only effective prior to 12/13 DY) *Certification deadline April 1 for 11/12 DY May Feb. July Sept Conditional Incremental Auction (Effective 12/13 DY) May be scheduled at any time prior to DY March* June 1
PJM© Illustrative Example of a VRR Curve A VRR Curve is defined for the PJM Region. Individual VRR Curves are defined for each Constrained LDA. Quantity = UCAP MW Price = UCAP Price ($/MW-day) (a) (b) (c) 1.5 Net Cone Net Cone 0.2 Net Cone (IRM – 3%) (IRM + 1%)(IRM + 5%) IRM Effective 12/13 DY: Target Level = Reliability Requirement –Short Term Resource Procurement Target
PJM© What is a Supply Resource in RPM? In RPM, Resources are = Demand Resources (DR) Demand Resources (DR) Qualifying Transmission Upgrades (QTU) Generation Resources Energy Efficiency Resources (EE) (Effective with 11/12 DY) Energy Efficiency Resources (EE) (Effective with 11/12 DY)
PJM© Evolution of Supply Capability in PJM Market nuclear total renewables demand response solar/ wind Note: Adjusted to reflect integrations gas coal
PJM© Coal Retirements by Year (MW) MW
PJM© Generation Deactivations
PJM© Offered and Cleared by Fuel Type Over Time
PJM© Source: Ventyx*Coal – Gas Equivalent Gas vs. Coal Over Time
PJM© PJM Market Evolution of Fuel Mix for Annual Electricity Production In GWhs
PJM© Fuel Mix for 2012 Annual Electricity Production
PJM© PJM Market – Average Power Generation Emissions Pounds Per MWh of Electricity Produced
PJM© PJM© – Generation Interconnection Queue Volume by MW
PJM© Current - PJM Queued Generation (Nameplate Energy) As of 03/2013
PJM© DR vs. EE Energy Efficiency (EE) –Installed device that exceeds relevant standards –Achieves reduction during ALL hours of the performance period –Installing an LED light bulb Demand Response (DR) –Capability to reduce consumption on command –Annual, Extended Summer, Limited –Shutting the light off
PJM© DR Participation Over Time
PJM© Energy Efficiency Participation in RPM Over Time
PJM© Trends in Resource Adequacy Coal Retirements –~ 14,000 MW by 2015 Growth in energy production of natural gas Emergence of Energy Efficiency and DR –Capacity Market revenues make these types of projects much more profitable –Offset the need for traditional generation –Efforts to “operationalize” DR Increases in natural gas capacity –More natural gas capacity than coal by 2015 –Generation queue volumes have swapped over the last few years
PJM©2012www.pjm.com PJM’s Experience with Capacity Markets Terry Boston President & CEO PJM Interconnection Power Across Texas September 21, 2012.
PJM©2015 ATTACHMENT TO TESTIMONY OF ANDREW OTT OHIO ENERGY MANDATES STUDY COMMITTEE MARCH 18, 2015
PJM©2015 DER Participation in the PJM Wholesale Power Markets Mid-Atlantic Renewable Energy Association Susan Covino Senior Consultant, Emerging Markets.
PJM© PJM Confidential PJM Generation Interconnection Overview Virginia Offshore Wind Conference Virginia Beach June 22, 2011 Paul McGlynn General.
PJM©2013www.pjm.com Deployment of smart-grid technologies – Technology and market challenges Stu Bresler VP, Market Operations PJM Interconnection University.
PJM© PJM as Part of the Eastern Interconnection KEY STATISTICS PJM member companies 750+ millions of people served 60 peak load in megawatts.
PJM©2016 PJM: Managing Grid Evolution Through Markets M. Gary Helm Lead Market Strategist.
©2005 PJM 1 APEx The Mature PJM Market Kenneth W. Laughlin PJM October 31, 2005 Orlando, FL.
PJM© Demand Response in PJM 2009 NASUCA Mid-Year Meeting June 30, 2009 Boston, MA Panel: Price Responsive Demand – A Long-Term Bargain.
Reliability Pricing Model (RPM) Overview Andrew Ott PJM Senior Vice President, Markets.
Overview of the North American and Canadian Markets 2008 APEX Conference in Sydney, Australia October 13, 2008 Hung-po Chao Director, Market Strategy and.
©2005 PJM 1 STATE OF THE MARKET REPORT 2004 Joseph E. Bowring Market Monitor FERC Briefing April 13, 2005.
PJM©2013www.pjm.com Economic DR participation in energy market ERCOT April 14, 2014 Pete Langbein.
PJM©2009www.pjm.com Implications of Electric Transportation for the National Grid Ken Huber PJM Interconnection February 19, 2010.
©2005 PJMwww.pjm.com 1 A ROMP THROUGH RESTRUCTURING… LOOKING BACKWARD TO LOOK F ORWARD In-Depth Introduction to Electricity Markets Conference New Brunswick,
PJM©2013 Cyber Threats to the Electric Power Grid Steven McElwee October 16, Copyright © 2013 by PJM Interconnection, LLC.
Electric Generation Reliability Remarks Before the Pennsylvania Public Utility Commission 2011 Summer Reliability Assessment Meeting June.
Overview of the Capacity Markets in the United States 2008 APEX Conference in Sydney, Australia October 13-14, 2008 Hung-po Chao Director, Market Strategy.
Utility Regulation March 10, 2011 Raj Addepalli Deputy Director, Electric, Office of Electric,Gas and Water New York State Department of Public Service.
PJM © PJM Overview ARIPPA Valley Forge, PA November 8, 2007.
Demand Response: What It Is and Why It’s Important 2007 APPA National Conference San Antonio, Texas June 26, :00 a.m. to Noon Glenn M. Wilson Director.
LTTR, FCM, RPM, MRTU: Do More Acronyms Mean Better RTO Markets? An Overview of Various RTO Capacity Constructs and their Impact on Load.
Attachment to Testimony of Joseph Bowring Ohio Energy Mandates Study Committee April 16, 2015.
©2003 PJM Factors Contributing to Wholesale Electricity Prices Howard J. Haas Market Monitoring Unit November 30, 2006.
Gloria Godson VP, Federal Regulatory Policy Reliability Pricing Model Part 2.
Warren Lasher Director, System Planning October 4, 2014 Our Energy Future.
1 Capacity Markets Investment in Generation Capacity Payments October 31, 2005 J. W. Charlton.
PJM©2014www.pjm.com Winter 2014 Overview & Recent and Upcoming Market Rule Changes Adam Keech Director, Market Operations.
Electric Reliability Council of Texas (ERCOT) A Success Story… In Progress Ingmar Sterzing United States Association of Energy Economics (USAEE) Pittsburgh.
Powering a Reliable and Sustainable Energy Future for Ontario Bruce Campbell, President and CEO, IESO March 3, 2016.
PJM©2014www.pjm.com State of Demand Response Stu Bresler Vice President- Market Operations PJM Interconnection 10 th OPSI Annual Meeting October 13, 2014.
The Midwest ISO – Platform to Meet Tomorrow’s Challenges Wisconsin Industrial Energy Group August 7, 2008.
©2004 PJM 1 STATE OF THE MARKET REPORT 2003 Joseph E. Bowring Manager PJM Market Monitoring Unit FERC Briefing Washington, D.C. April 14, 2004.
RGGI Workshop on Electricity Markets, Reliability and Planning Topic Session 3: RGGI Design, Markets and Reliability – Issues Relating to System Operations.
PJM © APEx Annual Conference Audrey A. Zibelman EVP and COO PJM Interconnection October 31, 2005.
The Australian Market Evolution Dr Brian Spalding Chief Operating Officer NEMMCO.
Alberta’s Future Electricity Needs: What’s the Real Story? Economic Developers of Alberta Annual Professional Conference April 10, 2014 John Esaiw, Director.
PJM©2014www.pjm.com A System Operator’s Resilience Wish List Tom Bowe Executive Director Reliability and Compliance PJM Interconnection
PJM© Welcome to PJM. PJM© Today’s Agenda 1.Introductions 2.PJM Overview 3.State and Federal Regulation Steve Boyle.
North American Electricity Markets APEX Paris, France October 15-16, 2007 Kenneth Laughlin, PJM.
PJM © 2006 The Institute for Regulatory Policy Studies Illinois State University Conference May 12, 2006 Jeff Bladen PJM Interconnection.
Wholesale Markets and How Efficiency Has Financial Value Dan Griffiths KEEA Energy Efficiency Conference September 21, 2010.
1 New England Demand Response Resources: Present Observations and Future Challenges Henry Yoshimura Demand Resources Department ISO New England, Inc. Holyoke,
PJM©2008 Potential Effects of Proposed Climate Change Policies on PJM’s Energy Market Paul M. Sotkiewicz, Ph.D. Senior Economist PJM Interconnection Organization.
Understanding Ontario’s Electricity System Presentation by Robert Doyle, Communications Advisor, IESO September 13, 2010.
NASUCA Meeting Integration of Intermittent Renewable Resources Panel Michael McMullen MISO June 10, 2013.
1 Transmission Development at Ameren and in the Midwest ISO Mid-America Regulatory Conference Maureen A. Borkowski June 8, 2010.
ISO New England Regional Update Wholesale Electricity Markets & State Energy Policy Seminar Connecticut Business & Industry Association December 14, 2010.
OPSI Annual Meeting October 13, Session 6 Reliability Pricing Model: Are Further Changes Necessary? Reluctantly…yes But States should also be.
Meeting with Rep. _______________ Solar Industry Representatives May 5, 2010.
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