ancillary services & their treatment in the nem
TRANSCRIPT
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Queensland Power and Gas ConferenceWorkshop on Network Services and Ancillary Services
25 February 2004
Ancillary services & their treatment in the NEM
Hugh OuthredSchool of Electrical Engineering and Telecommunications
The University of New South WalesSydney, Australia
Tel: +61 2 9385 4035; Fax: +61 2 9385 5993; Email: [email protected]
www.sergo.ee.unsw.edu.au
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Ancillary services & their treatment in the NEM © H Outhred 2political climate & priorities
Physical electricity industry
Ancillaryservices
Engineering models
Main commercial markets
Economic models
Externalities
Trading in electricity:-an abstraction from reality
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A model of electricity trading
• Spot market energy traded as a commodity:– Energy (that meets QOS criteria) traded during
each (short) spot market interval• Financial instruments:
– Related to future spot market prices:• Convey expectations of future spot market behaviour• Allow risk management
• Ancillary services:– To manage availability & quality of supply
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Managing quality of supply
• ‘Quality of Supply’ (QOS) attributes:– Voltage, frequency, waveform purity, phase
balance, supply availability at each node• Managed by:
– ‘Ancillary services’ (AS) in the short term:• Appropriate resources under automatic control
– Projections of future supply-demand balance– Investments in new resources as required
• Via appropriate commercial arrangements
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Timeline for electricity trading(requires active demand-side participation)
Financial instrument (FI)trading &
spot market projections
ancillary service“actuation markets”
for period tforward-lookingancillary service(AS) “acquisition
markets”
ancillary service“actuation markets”
for period t+1
Spot marketfor period t
Spot marketfor period t+1
time
spotperiod t
spotperiod t+1Interactions
& constraints
increasing uncertainty
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AS acquisition & actuation markets
Providers of services
Acquisitionmarkets
Acceptedoffers
Actuationmarkets
Offers to provideancillaryservices
Triggers,rewards,penalties
Forecasts of system operation
and market conditions
Outcomes from the technical forward &
spot markets
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AS Acquisition market design
• Offer to provide a service:– Capability statement, e.g:
• max, min & rate of change limits• required lead time (starting time)• Minimum running time• dependence on acceptance of spot offer
– ‘Willingness to provide’ functions:• for readiness• for actuation
– Valid time period of offer
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AS Actuation market design
• Mainly by automatic control functions, e.g :– Governor, voltage regulator, AGC, economic
dispatch, transformer tap changers• Same market interval as spot market• Requirement determined by evolving system
operation:– Notify market participants of evolving conditions
in real time to enhance responsiveness
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AS Actuation market design
• Initialised by outcomes of AS acquisition & spot markets:– Determine parameters & set points for control
systems– Accepted spot market quantities provide a basis
for assessing participants’ AS activity• Financial outcome resolved after the
relevant spot market closes
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Potential for commercial trading
• Voltage, frequency, short term availability:√ Competition to provide services
(technical efficiency)√ Willingness to pay for services
(allocative efficiency)√ Transition to a spot market solution if need is
prolonged• Power system security:
? Market valuation of security? Competition to provide services
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Potential for commercial trading• Waveform purity & phase balance:
– Potential for competition in provision in service– Standards likely to define target outcome– Payment likely to be by regulated cost allocation
• Potential reduction in QOS requirements:– Short-term QOS excursions often acceptable:
• 1% voltage reduction causes ~ 1% load reduction• 1% frequency reduction causes ~ 2% load reduction
– Consumers may find cost effective alternatives:• uninterruptible power supplies, insurance
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Physical vs financial risk management
• Ancillary services are physical means for risk management
• ‘Financial instrument’ alternatives, e.g:– Insurance against damage caused by loss of QOS– Call options used to finance rapid start generators:
• could operate in both spot & ancillary service markets
• Such alternatives enhance contestability in the provision of ancillary services
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NEM definition of ancillary services(a wholesale market approach)
• Those services that provide for:– Power system security– Quality of supply– Enhanced spot trading benefits:
• Where not provided on the basis of spot prices alone
• NEM categories of ancillary service:– Frequency control ancillary services (FCAS)– Network control ancillary services (NCAS)– System restart ancillary services (SRAS)
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Network Control Ancillary Services(NCAS)
• Voltage control - continuous: – NEC requires tap changers
• Voltage control - contingency:– Reactive power resources for planned worst
case conditions– Emergency schemes for plausible multiple
contingencies• Stability control
– NEC requires generators to install stabilisers• To enhance small & large disturbance stability
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Network Control Ancillary Services (continued)
• Network loading contingency control:– To control transmission line flows– To permit full utilisation of transmission lines
System Re-start Ancillary Services• Power station self-start capability• Early restoration of supply to major cities
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NEM frequency control ancillary services
• Frequency management - small deviations:– Maintain frequency within normal band & control
time error– Two markets (raise & lower regulation) from 10/01
• Frequency management - large deviations:– Large step changes in demand– Loss of largest single generator– Multiple contingencies– Six markets from 10/01: 6 sec; 60 sec; 5 min raise
& lower
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FCAS cost comparison before & after 10/01(Performance of the ancillary service markets, NECA May 2003)
FCAS ancillary services around 50% of total AS cost since 10/01
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FCAS cost 10/01-3/03: sourced globally (top) & by region (bottom)(Performance of the ancillary service markets, NECA May 2003)
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Current situation with NEM FCAS
• ACCC determination on Regional Pricing of Ancillary Services, 17/9/03:– Participants in each region will bear costs when
prices set by region– NECA to undertake a broader review
• Theoretical underpinnings of current FCAS arrangements appear to be weak
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Relationship between main commercial markets & physical reality
Main commercial marketsSpot & FI markets:• Set commodity targets
for ancillary services• Manage persistent
physical disturbances• Manage commercial disturbances
Physical realityAncillary services:• Direct physical behaviour
towards future energy targets• Reject physical disturbances• Sufficient for expected tasks
Spot marketenergytargets
Commercialdisturbances
Physicaldisturbances
Unresolvedphysical
disturbances
Projectedcost of
meetingfuturetargets
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frequency control & �NEM 5-30 minute spot market
Generator withspeed governor
Generator withspeed governor
Frequency-sensitive load
Short-lived (<10 sec) power imbalances controlled by decentralised governors (local speed/frequency control)
Medium term (10sec - 5 min) power imbalancescontrolled by centralised AGC
frequencyerror
Automatic generation controlalgorithm distributes raise/lower
signals to AGC participants
Powersetpoints
Long term (>5 min) power imbalancesresolved by hybrid 5-30 minute spot market
Offers to sell & bids to buywith ramp-rate limits
Market clearing price &accepted quantitiesfor each participant
Unresolved disturbances
Unresolved disturbances
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A generator responding to dispatch & small disturbance frequency control
energytarget for nextspot market
linear rampfrom previous
ave power level
∑
frequencyerror
timeerror
AGCprocessing
&filtering
∑generator
powerset-point
+
shaftspeed
(frequency)errors
-
actualgeneration
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A generator tracking five-minute dispatch targets with AGC raise/lower bounds
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Finite horizon ramping control example(S Samuelsen, 2001)
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Large disturance frequency control:loss of NSW 660 MW Generator
(source: NEMMCO)
Frequency control capability requirement = R
Maintain frequency in tolerance band > 49.5 Hzby local governor action
50.0 Hz
49.9 Hz
49.5 Hz
Maximum Power Input = 630 MW (nett of unit auxiliary load)
Load relief is 200 MW for a typical minimum load of 10 GW
R6s (raise) = 430 MW
R5m (raise) = 630 MW less any load shedding included in 6 sec response which has not been restored
Return to normal frequency band >49.9 Hz within 5 min by AGC
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Indicative AS response to a unit outage
MW error 5 minutes
60 secondresponse
5 minutedispatchresponse
6 secondresponse
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NEM frequency tolerance bands
State Frequency band (Hz)
Normal 49.85 Ğ 50.15 (99% of time)49.75 Ğ 50.25 (1% of time)
Single generatorcontingency
49.5 Ğ 50.5
Other crediblecontingency
49.0 Ğ 51.0
Emergency 47.0 Ğ 52.0
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Distribution of frequency in the NEM, June 2003(Reliability Panel Annual Report, 2002-3)
0.00
5.00
10.00
15.00
20.00
25.00
49.90 49.92 49.94 49.96 49.98 50.00 50.02 50.04 50.06 50.08 50.10
Frequency (Hz)
Occurence (%)
Target frequency band (normal)
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Frequency events outside the normal operating band in the NEM due to contingencies, 2002-03
(Reliability Panel Annual Report, 2002-03)
0
4
8
12
16
20
<10 <20 <30 <40 <50 <60 <70 <80 <90 <100 <110<120<130 <140<150<250<300 >300
Duration outside normal operating band (seconds)
Number of events
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Projected surplus reserves NEM states(Medium growth + extreme (10% POE) weather, NEMMCO SOO, July 03)
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Advanced or publicly announced generation projectsby fuel type & compared to expected reserve deficit in 2008/09
0
500
1000
1500
2000
2500
Qld/NSW Vic/SA
Reserve deficitTotal projectsCoal projectsGas projectsHydro projects
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Conclusions• Ancillary services are an essential part of a
competitive electricity industry:– Required to maintain availability & quality of supply– Critical in determining the need for investment
• AS most important at consumer nodes:– Primarily distribution rather than transmission issue– AS presently dealt with at the wholesale level:
• Bias towards large participants
• Australian approach to AS is still evolving:– Unresolved issues include boundary problems