National Market for Instantaneous Reserves Scenario Analysis

Outline

Reserve Sharing Limits Forward/Reverse Sharing Limit ≤ HVDC Control Band - MR 220 Reverse Sharing Limit ≤ Energy Transfer - MR - Pmin SIR: 5mins cable discharge Forward Sharing Limit ≤ HVDCmax - Energy Transfer - MR FIR: ~4s delay to initiate RP (at 35MW) and establish stable RP operation (at 0MW) 22.5 190 HVDC Energy Transfer

Reserve Sharing Limits 4

Scenario 1 - Island Based Medium DCN NI Price $ NI Offered MW NI Cleared MW TR1 130 TR2 90 TR3 TR4 TR5 225 50 Total 445 270 NI FIR Scheduled 270MW NI FIR Price NI $TR5 NI 6s ACCE Risk 270MW NI DCCE 6s 0MW NI DCECE 6s 155MW Medium DCN 530MW (Received) SI Price $ SI Offered MW SI Cleared MW TR1 TR2 60 TR3 10 TR4 45 40 TR5 30 Total 145 110 SI 6s ACCE Risk 110MW SI FIR Scheduled 110MW SI FIR Price SI $TR4 5

Constrained by HVDCmax + MR Constrained by Pmin + MR Island Based vs NMIR Scenarios NMIR Parameters Island Based NMIR S1 - Medium DCN (545MW) S2 - Medium DCN S3 - Low DCN (121MW) S4 - No Reverse Sharing DCN (51MW) S5 - RP DCN (11MW) S6 - High DCN (980MW) S7 - High DCS (543MW) FIR Forward Sharing Limit N/A Unconstrained Constrained by HVDCmax + MR FIR Reverse Sharing Limit Constrained by Pmin + MR NI FIR Scheduled 270MW SI FIR Scheduled 110MW Forward Sharing Quantity (Received) None Reverse Sharing Quantity (Received) NI FIR Price NI $TR5 SI FIR Price SI $TR4 DC is the binding risk in the receiving island (S6/S7) HVDC North Transfer decreases (S2 Medium - S5 low) 6

Scenario 2 – NMIR Medium DCN 545MW Sent MW SISharedNFR = 1%(SILD - inertialess load) 12MW Estimated Free Load Response from SI can be shared to cover NI AC type risks NISharedNFR = 1%(NILD - inertialess load) 31MW Estimated Free Load Response from NI can be shared to cover SI AC type risks Loss Ratio 0.05676 when DCN is transferring between 451 and 700MW Effectiveness Factor 0.8 545

Scenario 2 – NMIR Medium DCN NI FIR Scheduled 220MW Cleared 155MW in NI due to non-zero DCECE risk Cleared all NI TR2 first due to losses and effectiveness (vs. SI) Enough to cover SI ACCE (reverse sharing) but need more to cover NI ACCE Need to receive 50MW (Risk270 - Scheduled220) from SI NI FIR Price SI $TR2 adjusted by the losses and effectiveness factor NI Price $ NI Offered MW NI Cleared MW TR1 130 TR2 90 TR3 TR4 TR5 225 Total 445 220 NI 6s ACCE Risk 270MW NI DCCE 6s 0MW NI DCECE 6s 155MW NI $TRs = SI $TRs Medium DCN 545MW Sent MW SI Price $ SI Offered MW SI Cleared MW TR1 TR2 60 54 TR3 10 TR4 45 TR5 30 Total 145 SI 6s ACCE Risk 110MW SI FIR Scheduled 54MW 50 = (SI Scheduled + SI SharedNFR) adjusted by losses and effectiveness SI FIR Price Marginal - SI @ $TR2 8

SI $TR2 adjusted by the losses and effectiveness factor Summary of scenarios comparison NMIR Parameters Island Based NMIR S1 - Medium DCN (545MW) S2 - Medium DCN S3 - Low DCN (121MW) S4 - No Reverse Sharing DCN (51MW) S5 - RP DCN (11MW) S6 - High DCN (980MW) S7 - High DCS (543MW) FIR Forward Sharing Limit N/A 220MW Unconstrained Constrained by HVDCmax + MR FIR Reverse Sharing Limit Constrained by Pmin + MR NI FIR Scheduled 270MW SI FIR Scheduled 110MW 54MW Forward Sharing Quantity (Received) None 50MW Reverse Sharing Quantity (Received) 56MW NI FIR Price NI $TR5 SI $TR2 adjusted by the losses and effectiveness factor SI FIR Price SI $TR4 SI $TR2

S2 – Medium DCN (> 1 Binding Risk) NI Price $ NI Offered MW NI Cleared MW TR1 TR2 90 TR3 TR4 TR5 225 65 Total 315 155 NI FIR Scheduled 155MW Cleared 155MW in NI due to non-zero DCECE risk NI FIR Price NI $TR5 NI 6s ACCE Risk 270MW Multiple Binding Risks NMIR - Reserves are procured from the receiving island only for DCCE/DCECE NI DCECE 6s 155MW Medium DCN 545MW Sent MW SI Price $ SI Offered MW SI Cleared MW TR1 130 TR2 60 10 TR3 TR4 45 TR5 30 Total 275 140 SI 6s ACCE Risk 110MW SI FIR Scheduled 140MW 115 = (SI Scheduled + SI SharedNFR) adjusted by losses and effectiveness SI Scheduled > SI ACCE SI FIR Price SI $TR2 10

≤ Energy Transfer - MR – Pmin S3 – NMIR Low DCN Low DCN 120MW Received MW 121MW Sent MW Reverse Sharing Limit ≤ Energy Transfer - MR – Pmin 56 DCN = 121

S3 – NMIR Low DCN 12 NI Price $ NI Offered MW NI Cleared MW TR1 130 90 79 TR3 TR4 TR5 225 Total 445 209 NI FIR Scheduled 209MW Max Reverse Sharing = (NI SharedNFR + Reverse sharing procured Limit) adjusted by losses and effectiveness NI FIR Price NI $TR2 NI 6s ACCE Risk 270MW NI DCCE 6s 0MW NI DCECE 6s Low DCN 121MW Sent MW FIR Reverse Sharing Limit 56MW Reverse limit reduced means buy more in SI to cover SI ACCE SI Price $ SI Offered MW SI Cleared MW TR1 TR2 60 TR3 10 5 TR4 45 TR5 30 Total 145 65 SI 6s ACCE Risk 110MW SI FIR Scheduled 65MW Required to procure in SI total = SI risk – Max Reverse Sharing More scheduled in SI hence more can be shared to NI (less scheduled in NI) SI FIR Price SI $TR3 12

Summary of scenarios comparison NMIR Parameters Island Based NMIR S1 - Medium DCN (545MW) S2 - Medium DCN S3 - Low DCN (121MW) S4 - No Reverse Sharing DCN (51MW) S5 - RP DCN (11MW) S6 - High DCN (980MW) S7 - High DCS (543MW) FIR Forward Sharing Limit N/A 220MW Unconstrained Constrained by HVDCmax FIR Reverse Sharing Limit 56 MW NI FIR Scheduled 270MW 209MW (↓) SI FIR Scheduled 110MW 54MW 65MW (↑) Forward Sharing Quantity (Received) None 50MW 61MW Reverse Sharing Quantity (Received) 56MW 45MW NI FIR Price NI $TR5 SI $TR2 adjusted by the losses and effectiveness factor NI $TR2 SI FIR Price SI $TR4 SI $TR2 SI $TR3

S4 – NMIR No Reverse Sharing DCN 50MW Received MW 51MW Sent MW DCN=51

S4 – NMIR No Reverse Sharing DCN NI Price $ NI Offered MW NI Cleared MW TR1 130 TR2 90 43 TR3 TR4 TR5 225 Total 445 173 NI FIR Scheduled 173MW (SI Scheduled + SI SharedNFR)sent can be shared to NI More scheduled in SI hence more can be shared to NI (less scheduled in NI) NI FIR Price NI $TR2 NI 6s ACCE Risk 270MW NI DCCE 6s 0MW NI DCECE 6s No Reverse Sharing DCN 51MW Sent MW FIR Reverse Sharing Limit 0MW Reverse limit is ZERO means buy all SI FIR in SI to cover SI ACCE SI Price $ SI Offered MW SI Cleared MW TR1 TR2 60 TR3 10 TR4 45 40 TR5 30 Total 145 110 SI 6s ACCE Risk 110MW SI FIR Scheduled 110MW SI FIR scheduled = SI RISK SI FIR Price SI $TR4 15

S4 - No Reverse Sharing DCN (51MW) Summary of scenarios comparison NMIR Parameters Island Based NMIR S1 - Medium DCN (545MW) S2 - Medium DCN S3 - Low DCN (121MW) S4 - No Reverse Sharing DCN (51MW) S5 - RP DCN (11MW) S6 - High DCN (980MW) S7 - High DCS (543MW) FIR Forward Sharing Limit N/A 220MW Unconstrained Constrained by HVDCmax FIR Reverse Sharing Limit 56 MW 0MW NI FIR Scheduled 270MW 209MW (↓) 173MW (↓) SI FIR Scheduled 110MW 54MW 65MW (↑) 110MW (↑) Forward Sharing Quantity (Received) None 50MW 61MW 97MW Reverse Sharing Quantity (Received) 56MW 45MW NI FIR Price NI $TR5 SI $TR2 adjusted by the losses and effectiveness factor NI $TR2 SI FIR Price SI $TR4 SI $TR2 SI $TR3

No Reverse Sharing Zone

No Reverse Sharing Zone NI Load +30MW SI Energy $1 NI Energy $1.5 5.8% 22.5 65 1st Solve: DCN = 22.5, FIR Reverse Sharing Quantity = 50MW 2nd Solve: $1 x 30 + $SI FIR x 50 ↔ $1.5 x 30 DCN = 52.5 (no reverse sharing means buy 50MW in SI but can share more to NI) DCN = 22.5

S5 – NMIR RP DCN RP DCN 10MW Received MW 11MW Sent MW DCN=11

S5 – NMIR RP DCN 20 NI Price $ NI Offered MW NI Cleared MW TR1 130 TR2 90 TR3 TR4 TR5 225 Total 445 220 NI FIR Scheduled 220MW NI FIR Price SI $TR2 adjusted by the losses and effectiveness factor NI 6s ACCE Risk 270MW NI DCCE 6s 0MW NI DCECE 6s RP DCN 11MW Sent MW SI Price $ SI Offered MW SI Cleared MW TR1 TR2 60 51 TR3 10 TR4 45 TR5 30 Total 145 SI 6s ACCE Risk 110MW SI FIR Scheduled 51MW The difference is caused by the different losses (vs. S2) SI FIR Price Marginal - SI @ $TR2 20

Summary of scenarios comparison NMIR Parameters Island Based NMIR S1 - Medium DCN (545MW) S2 - Medium DCN S3 - Low DCN (121MW) S4 - No Reverse Sharing DCN (51MW) S5 - RP DCN (11MW) S6 - High DCN (980MW) S7 - High DCS (543MW) FIR Forward Sharing Limit N/A 220MW Constrained by HVDCmax Unconstrained FIR Reverse Sharing Limit 56 MW 0MW NI FIR Scheduled 270MW 209MW (↓) 173MW (↓) SI FIR Scheduled 110MW 54MW 65MW (↑) 110MW (↑) 51MW (↓) Forward Sharing Quantity (Received) None 50MW 61MW 97MW Reverse Sharing Quantity (Received) 56MW 45MW 59MW NI FIR Price NI $TR5 SI $TR2 adjusted by the losses and effectiveness factor NI $TR2 SI FIR Price SI $TR4 SI $TR2 SI $TR3

≤ HVDCmax - Energy Transfer – MR S6 – NMIR High DCN High DCN 925MW Received MW 980MW Sent MW Forward Sharing Limit ≤ HVDCmax - Energy Transfer – MR 190 DCN=980

S6 – NMIR High DCN 23 NI Price $ NI Offered MW NI Cleared MW TR1 130 90 TR3 TR4 TR5 225 220 Total 445 440 NI 6s ACCE Risk 270MW NI FIR Scheduled 440MW Cleared 440MW in NI due to DCECE risk NI FIR Price NI $TR5 NI DCCE 6s 342MW NI DCECE 6s 440MW High DCN 980MW Sent MW SI Price $ SI Offered MW SI Cleared MW TR1 TR2 60 TR3 10 TR4 45 TR5 30 Total 145 SI 6s ACCE Risk 110MW SI FIR Scheduled 0MW No FIR required in SI as covered by Reverse sharing SI FIR Price 23

Summary of scenarios comparison NMIR Parameters Island Based NMIR S1 - Medium DCN (545MW) S2 - Medium DCN S3 - Low DCN (121MW) S4 - No Reverse Sharing DCN (51MW) S5 - RP DCN (11MW) S6 - High DCN (980MW) S7 - High DCS (543MW) FIR Forward Sharing Limit N/A 220MW 190MW Unconstrained FIR Reverse Sharing Limit 56MW 0MW NI FIR Scheduled 270MW 209MW (↓) 173MW (↓) 440MW SI FIR Scheduled 110MW 54MW 65MW (↑) 110MW (↑) 51MW (↓) Forward Sharing Quantity (Received) None 50MW 61MW 97MW Reverse Sharing Quantity (Received) 45MW 59MW NI FIR Price NI $TR5 SI $TR2 adjusted by the losses and effectiveness factor NI $TR2 SI FIR Price SI $TR4 SI $TR2 SI $TR3

S7 – NMIR High DCS High DCS 520MW Received MW 534MW Sent MW DCS=534

S7 – NMIR High DCS 26 NI Price $ NI Offered MW NI Cleared MW TR1 130 90 17 TR3 TR4 TR5 225 Total 445 147 NI 6s ACCE Risk 265MW NI FIR scheduled 147MW NI scheduled = NI Risk – Reverse Shared NI FIR Price NI $TR2 High DCS 534MW Sent MW SI DCCE 6s 24MW SI DCECE 6s 140MW SI Price $ SI Offered MW SI Cleared MW TR1 TR2 60 TR3 10 TR4 45 TR5 30 25 Total 145 140 SI 6s ACCE Risk 110MW SI FIR scheduled 140MW Cleared 140MW in SI due to DCECE risk SI FIR Price SI $TR5 26

Summary of scenarios comparison NMIR Parameters Island Based NMIR S1 - Medium DCN (545MW) S2 - Medium DCN S3 - Low DCN (121MW) S4 - No Reverse Sharing DCN (51MW) S5 - RP DCN (11MW) S6 - High DCN (980MW) S7 - High DCS (543MW) FIR Forward Sharing Limit N/A 220MW 190MW FIR Reverse Sharing Limit 56MW 0MW NI FIR Scheduled 270MW 209MW (↓) 173MW (↓) 440MW 147MW SI FIR Scheduled 110MW 54MW 65MW (↑) 110MW (↑) 51MW (↓) 140MW Forward Sharing Quantity (Received) None 50MW 61MW 97MW Reverse Sharing Quantity (Received) 45MW 59MW 118MW NI FIR Price NI $TR5 SI $TR2 adjusted by the losses and effectiveness factor NI $TR2 SI FIR Price SI $TR4 SI $TR2 SI $TR3 SI $TR5

The key points Reserves are procured from the receiving island only for DCCE/DCECE Multiple Binding Risks scenario is more likely to happen under national IR market than current Sharing Constraints FIR Sharing Procured Limit = HVDC Control Band – MR – SharedNFR SIR Sharing Procured Limit = HVDC Control Band – MR Forward Sharing is also constrained by HVDCmax – MR Reverse Sharing is also constrained by Pmin + MR Forward Sharing ≤ 60 when the Pole with lower rating in Reduced Voltage No sharing at low DC transfer when RP Off Losses/Effectiveness Factor affect both Scheduled Reserve Quantity and Island Reserve Price