Enhanced Commitment for SPP Market Monitoring - Improving Market Efficiency
Enhance market flexibility, improve resource commitments, and increase efficiency in SPP's market through the initiative of Enhanced Commitment Market Monitoring. This initiative aims to address market inefficiencies, optimize resource utilization, and improve reliability while reducing production costs. Learn about the potential system impacts and risks associated with this strategic enhancement.
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Presentation Transcript
SIR9 ENHANCED COMMITMENT SPP MARKET MONITOR MARCH 18, 2020 Helping our members work together to keep the lights on... today and in the future. SPPorg southwest-power-pool SouthwestPowerPool
SIR9 ENHANCED COMMITMENT MARKET MONITORING What will the initiative do for SPP s Market: Increased market flexibility Ensure resources with required operating attributes to meet market conditions are on-line Ensure resources are only on-line when needed to meet market conditions Address market inefficiencies related to resource commitments Improve what resources are committed and when they receive actual start orders Improve the duration of initial commitment and subsequent extensions of the commitment Address economic de-commitment of resources before actual start order and after minimum runtime 2
SIR9 ENHANCED COMMITMENT MARKET MONITORING How is SPP s market improved by implementing the initiative: Realize similar benefits gained by PJM through the implementation of their CT logic related to resource commitment and potentially improve on those benefits Increased market flexibility increases market efficiency Reduce make-whole payments by ensuring only the resources needed to meet market conditions are on-line and/or available Reduce production cost and increase supplier surplus by valuing and efficiently utilizing the flexibility of resources Increase prices and reduce make-whole payments by having fewer resources at minimum energy not setting price Increased market flexibility increases market reliability Avoid scarcity and min-gen scenarios through clearing and committing resources with best operating attributes to meet market conditions and market uncertainty 3
SIR9 ENHANCED COMMITMENT MARKET MONITORING Potential System Impacts: DA, MCE, RUC, Settlements, RTBM Potential MCE Performance Impact: Medium Medium Potential Complexity: Design: High Implementation: Medium 4
SIR9 ENHANCED COMMITMENT MARKET MONITORING Potential Risks: Performance of resources that receive a start order based on their offer parameters Market anomalies that require resources to buy back a day-ahead position Currently exists in integrated market with all operating reserves Risk is mitigated through increased producer surplus Market Philosophy Impacts: Price Formation, Price Convergence, Market Efficiency, Market Transparency, Market Reliability All 5
SIR9 ENHANCED COMMITMENT MARKET MONITORING Example/Research/Analysis Information: The MMU first published recommendation to enhance de-commitments in 2018: 2017 Annual State of the Market report: https://www.spp.org/documents/57928/spp_mmu_asom_2017.pdf Presented and discussed at MWG meeting, July 2018 The MMU expanded their recommendation to include enhanced commitments in 2019: 2018 MMU Annual State of the Market report: https://www.spp.org/documents/59861/2018%20annual%20state%20of%20the%20 market%20report.pdf Presented and discussed at MWG meeting, May 2019 6
