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Overview of the North American and Canadian Markets 2008 APEX Conference in Sydney, Australia October 13, 2008 Hung-po Chao Director, Market Strategy and.

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Presentation on theme: "Overview of the North American and Canadian Markets 2008 APEX Conference in Sydney, Australia October 13, 2008 Hung-po Chao Director, Market Strategy and."— Presentation transcript:

1 Overview of the North American and Canadian Markets 2008 APEX Conference in Sydney, Australia October 13, 2008 Hung-po Chao Director, Market Strategy and Analysis

2 2

3 Key Industry Issues in North America Infrastructure investments: generation and transmission Renewable resources and green power Demand response, energy efficiency and advanced metering infrastructure Wholesale and retail market developments © 2005 ISO New England Inc.

4 Wind Power Needs Transmission and Storage 4

5 California ISO Peak Load 50,270 MWs Zonal energy market with redispatch to manage congestion within zones Comprehensive market redesign – expect to move to nodal pricing in 2009 No capacity market

6 6 Alberta Electric System Operator  Peak load 9,710 MWh  Wholesale generation market opened in 1996  Retail competition opened in 2001  Wholesale real time energy market with a single market clearing price

7 7 SPP Peak Load ~48,000 MWs Full nodal energy imbalance energy market operational in Feb 2007 Transmission Services market with physical transmission rights No retail open access in footprint Cost/Benefit study underway for Day-Ahead Market with Unit Commitment and Ancillary Service Markets

8 8 ERCOT Peak Load 61,080 MWs 85% of Texas; Not subject to FERC; 3 DC Ties Generation capacity: 77,000+ MW 37,000 miles of Transmission Centralized registry for 5.9 million retail choice customers Competitive wholesale markets with nodal pricing No capacity market Demand response policy and deployment of advanced metering technology

9 9 Midwest ISO RTO Peak load 116,000 MWs Full nodal real-time and day-ahead energy markets No capacity market Territory encompasses fifteen states and one Canadian province

10 10 Ontario at a Glance (year-end 2007) Installed Capacity31,000 MW Record Summer Peak 27,005 MW (August 1, 2006) Record Winter Peak24,979 MW (December 20, 2004) Total Annual Energy Consumed 152 TWh Customers4.5 million Ontario Import Capability 4,000 MW Transmission Lines30,000 km (18,600 miles) Average Price (2008 to date) 5.23¢/kWh

11 11 Ontario’s Electricity Market $$ BillingPayments Dispatch Offers/ Schedules Bids Suppliers Generators 45 (e.g. Shell, Constellation) Wholesale Sellers 68 (e.g. Shell, Constellation) Consumers Local Distribution Companies 78 (e.g. Toronto Hydro, Hydro Ottawa, Hydro One) Wholesale Consumers 98 (e.g. Dofasco, Norampac, De Beers) Transmitters (Hydro One, Great Lakes Power, Canadian Niagara Power, Five Nations Energy) Tariffs$ Contracted/Regulated Prices $ Electricity Direction

12 12 Fixed or Capped Prices in Ontario More than 75 percent of the generation in Ontario has a contract or fixed price for example: –Non utility generator (NUG) contracts –Contracts for new (selected under RFP) and existing plants based on market price –Fixed rates for ‘heritage’ generation owned by the monopoly generator (nuclear and 85% of baseload hydro) –85% of coal and peaking hydro output from monopoly generator pays a rebate if market price exceeds a set rate –Fixed rates for renewable generation – Standard Offer Program for small- scale renewable In addition, Ontario is initiating a large volume of conservation and demand response contracts All Ontario consumers pay an adjustment to the Hourly Ontario Energy Price to cover these contracts –Adjustment fluctuates between a credit and debit depending on the market price

13 13 Major Initiatives in the Ontario Market Government RFP for new nuclear Smart Meters for all Ontarians by 2010 (4 million customers) –1.3 million installed to date –27,000 customers now billed on time-of-use rates Day-ahead mechanisms planned for 2010 –Assessing an energy forward market Day-ahead price forecast implemented this summer Ontario’s target for renewables is over 10,400 MW by 2010 Coal replacement strategy being implemented, with shutdown complete in 2014 Significant conservation and demand response programs launched and under development –Target 6,300 MW reduction through CDM by 2025

14 14 PJM Peak load = 144,796 MW Generation Capacity = 167,303 MW 1307 Generating Units 52,650 miles of transmission lines Annual energy delivery = 729 Million MWh 600+ member companies Annual Market Settlements exceed $31 Billion (US) Market covers 14 state jurisdictions

15 15 PJM Energy Markets - Full nodal (real-time & day-ahead), operated as a single control area Ancillary Services Markets – Regulation, Synchronized Reserve (10 min) and Scheduling reserve (30 min) Financial Transmission Rights markets (monthly, quarterly, annual and three year) Capacity market – three year forward

16 16 New York ISO Peak Load 34,000 MWs Full nodal pricing with real time and day- ahead energy markets Ancillary services fully co-optimized with energy markets in real-time and day-ahead Locational Installed capacity market with a demand curve Financial hedges for congestion (Transmission Congestion Contracts)

17 17 ISO New England Peak Load 28,130 MW Implemented wholesale markets in 1999 Implemented nodal pricing in 2003 Local Forward and real-time reserve markets New forward capacity market auction in February 2008 for capacity in June 2010 More than $1.0 billion in transmission investment made for reliability since 2002; another $4.0 to $7.0 billion planned over the next 10 years

18 18 North American Markets Peak LoadNodal pricingRetail Markets Capacity market California ISO50,2701 yr+YesNo Grid West (NWPP Area)58,0003 yrs +No Alberta Electric System Operator 9,710NoYesNo SPP48,0002007No ERCOT61,000Yes No MISO110,0002005PartialNo Ontario Market Operator27,005NoYesNo PJM144,7961998Yes NYISO34,0001999Yes ISO-NE28,0002003Yes

19 Questions?

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