q2 2021 market issues and performance - caiso.com

CAISO PublicCAISO Public

2021 Q3 Report on Market Issues and Performance

December 14, 2021

Department of Market Monitoring, California ISO

Amelia Blanke, Ph.D., Manager of Monitoring and Reporting

http://www.caiso.com/Documents/2021-Third-Quarter-Report-on-Market-Issues-and-Performance-Dec-9-2021.pdf

http://www.caiso.com/Documents/Department-Market-Monitoring-Report-Dec-2021.pdf

http://www.caiso.com/Documents/2021-Third-Quarter-Report-on-Market-Issues-and-Performance-Oct-5-2021.pdf

http://www.caiso.com/Documents/2021-Third-Quarter-Report-on-Market-Issues-and-Performance-Oct-5-2021.pdf

CAISO Public

Highlights of Q3 2021 market performance

• Higher prices in ISO and EIM compared to Q3 2020

– lower ISO hydro

– higher gas prices

– higher ISO outage rates

• Special issues

– new market rules implemented in Q3

– wheels and ISO exports

– ISO resource adequacy performance and backstop capacity procurement

CAISO Public

Western Energy Imbalance Market highlights

• EIM Resource sufficiency tests

– expanded DMM role in monitoring and reporting on performance and

issues

– Reports and data for July – October available on DMM’s website:

http://www.caiso.com/market/Pages/MarketMonitoring/Default.aspx

– Test failure can have a significant impact on prices

– Mid-day transfer changes

http://www.caiso.com/market/Pages/MarketMonitoring/Default.aspx

CAISO Public

Settlement timeline changes prevent timely reporting on

market settlements – but DMM will monitor

http://www.caiso.com/Documents/Presentation-MarketSettlementsTimelineTransformationTraining.pdf

http://www.caiso.com/Documents/Presentation-MarketSettlementsTimelineTransformationTraining.pdf

CAISO Public

Prices were significantly higher than the same quarter of 2020

$0

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2020 2021

Pri

ce (

$/M

Wh)

Day-ahead 15-minute 5-minute

CAISO Public

Gas prices increase in all major gas trading hubs in the

west compared to Q3 2020

$0

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2019 2020 2021

Gas p

ric

e (

$/M

MB

tu)

Henry Hub

PG&E Citygate

SoCal Citygate

El Paso Permian

NW Sumas

Avg. Hub Price (Q3) 2020 2021

Henry Hub $1.97 $4.33

PG&E Citygate $3.02 $5.72

SoCal Citygate $2.94 $6.75

NW Sumas $1.95 $4.18

El Paso Permian $1.53 $4.03

CAISO Public

Higher gas prices in one region often result in higher

electricity prices across the ISO footprint

$0.00

$1.00

$2.00

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2020 2021

Day-ahead15-minute5-minuteSoCal Citygate gas price (right)

CAISO Public

During high load periods, bilateral market prices in some other

balancing areas were often significantly higher than ISO market prices

$0

$25

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$75

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2020 2021

Price

($

/MW

h)

Mid-Columbia (Peak) Palo Verde (Peak) Pacific Gas & Electric (ISO) Southern California Edison (ISO)

Average peak hour bilateral and ISO prices

CAISO Public

ISO load peaked at about 43,947 MW on September 8, well below any

peak load reported in the last decade

40,000

42,000

44,000

46,000

48,000

50,000

52,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Sys

tem

pea

k l

oa

d (

MW

)

1-in-10 year peak forecast

1-in-2 year peak forecast

Actual peak

CAISO Public

Average hourly generation by fuel type (Q3 2021)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Avera

ge H

ourly G

enera

tion (

MW

)

Hours

Other Nuclear Bio Geothermal Wind Hydro Natural Gas Imports Solar

CAISO Public

Lower hydro-electric production in California contributes to

higher costs

0

1,000

2,000

3,000

4,000

5,000

6,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

MW

2015 2019 2020 2021

Monthly average hydro-electric production in CAISO

CAISO Public

Average hourly net interchange decreases in all hours

CAISO Public

Resource adequacy import bids decrease in price and volume

CAISO Public

Generation outages increase relative to Q3 in prior years

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2019 2020 2021

Gen

era

tio

n o

uta

ge

s (

MW

)

Other forced outages Forced maint. and plant trouble

Other planned outages Planned maintenance

CAISO Public

Generation outages increase relative to Q3 in prior years, by fuel

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3

2020 2021

Gen

era

tio

n o

uta

ges (

MW

)

Hydro Natural Gas Nuclear Solar Wind Biogas-biomass Geothermal Other

CAISO Public

CAISO market was more structurally competitive than Q3 2020

Lowest 500 residual supply index with largest one, two, or three suppliers excluded

0

25

50

75

100

125

150

175

200

225

250

275

300

325

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2016 2017 2018 2019 2020 2021

Num

ber

of

hours

RS

I le

ss than o

ne

One pivotal supplier test (RSI1)

Two pivotal supplier test (RSI2)

Three pivotal supplier test (RSI3)

CAISO Public

Average prices up – with highest average prices in net load

peak hours, particularly day-ahead

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Avera

ge n

et

loa

d (

MW

)

Pri

ce (

$/M

Wh)

Hour ending

Day-ahead 15-minute 5-minute Average net load

CAISO Public

Imbalance conformance adjustments continue to increase

-400

-200

0

200

400

600

800

1,000

1,200

1,400

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Megaw

atts

2021 Hour-ahead market2021 15-minute market2021 5-minute market2020 Hour-ahead market2020 15-minute market2020 5-minute market

CAISO Public

Monthly frequency of positive system or ISO flexible

ramping shadow price (15-minute market)

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

22%

24%

Jul

Aug

Sep

Oct

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Dec

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b

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Dec

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2019 2020 2021

Fre

quency o

f positiv

e s

yste

m p

rice

Upward ramping (system) Downward ramping (system)

Upward ramping (ISO) Downward ramping (ISO)

CAISO Public

Congestion decreased relative to Q3 2020

-$8

-$6

-$4

-$2

$0

$2

$4

$6

Q1 Q2 Q3 Q4 Q1 Q2 Q3

2020 2021

Imp

act

to p

rice

s ($

/MW

h)

PG&E SCE SDG&E

$166 million day-ahead congestion rent less than Q3 2020 ($220 million)

CAISO Public

Congestion revenue rights auction revenues are estimated to be

$10 million less than payments made to non-load-serving entities, about

6% of day-ahead congestion rent, well below average of 28% (2016-2018)

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$120

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2017 2018 2019 2020 2021

$ m

illio

n

Auction revenues received by ratepayers

Payments to auctioned CRRs

Total ratepayer losses

CAISO Public

Real-time offset costs increased to $72 million in Q3, more than total

ancillary services ($51 million) and bid cost recovery ($26 million)

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$0

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$140

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2019 2020 2021

Imb

ala

nce o

ffset

ch

arg

e (

$ m

illio

n)

RT loss imbalance offset chargeRT congestion imbalance offset chargeRT imbalance energy offset charge

Total charges ($ millions)

2019 2020 21'Q1-Q3

Energy $8 $64 $25

Congestion $97 $117 $129

Loss -$0 -$3 $2

Total $105 $177 $156

CAISO Public

California ISO – EIM average hourly 15-minute market transfer

0.00

0.10

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0.40

0.50

0.60

0.70

0.80

0.90

1.00

-2,000

-1,500

-1,000

-500

0

500

1,000

1,500

2,000

2,500

3,000

Avera

ge tra

nsfe

r (M

W)

California ISO ↔ NV Energy California ISO ↔ Arizona Public ServiceCalifornia ISO ↔ PacifiCorp West California ISO ↔ Portland GECalifornia ISO ↔ Powerex California ISO ↔ BANCCalifornia ISO ↔ Salt River Project California ISO ↔ Turlock Irrig. DistrictCalifornia ISO ↔ Los Angeles DWP California ISO net transfer

Import

s into

C

alif

orn

ia I

SO

Export

s fro

m C

alif

orn

ia

ISO

Hour 1 to 24

(Q3-2020)

Hour 1 to 24

(Q4-2020)

Hour 1 to 24

(Q1-2021)*

Hour 1 to 24

(Q2-2021)*

Hour 1 to 24

(Q3-2021)

CAISO Public

Peak prices in Northern CA exceeded the rest of the system

Average hourly 15-minute market pieces

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$120Ja

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2019 2020 2021

Price

($

/MW

h)

Arizona Public Service NV EnergyPacifiCorp East and Idaho Power Northwestern EIM EntitiesPowerex Salt River ProjectBalancing Authority of Northern California Turlock Irrigation DistrictLos Angeles Dept. of Water and Power Public Service Company of New MexicoNorthWestern Energy Pacific Gas and Electric (ISO)

CAISO Public

Prices and transfers reflect differences in regional supply

conditions and transfer limitations

Impact of congestion and greenhouse gas on 15-minute prices, Q3 2021

-$40

-$20

$0

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$100TI

DC

BA

NC

PG

AE

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E

SCE

LAD

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O

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MT

Ave

rage

co

st o

f LM

P c

om

po

nen

t

Systemwide energy price Transmission losses Congestion within CAISO

GHG component Congestion on EIM transfer limits Total LMP

CAISO Public

Hourly 15-minute market prices Q3

$0

$25

$50

$75

$100

$125

$150

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Avera

ge h

ou

rly p

rice (

$/M

Wh

)

Arizona Public ServiceNV EnergyPacifiCorp East and Idaho PowerNorthwestern EIM EntitiesPowerexSalt River ProjectBalancing Authority of Northern CaliforniaTurlock Irrigation DistrictLos Angeles Department of Water and PowerPublic Service Company of New MexicoNorthWestern EnergyPacific Gas and Electric (ISO)

CAISO Public

Salt River Project average 15-minute price by component

-$50

-$25

$0

$25

$50

$75

$100

$125

$150

$175

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10

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22

23

24

Ave

rage

co

st o

f LM

P c

om

po

nen

t

Hour Ending

System marginal energy price Transmission losses

Congestion within CAISO GHG component

Congestion on EIM transfer constraints Total LMP

CAISO Public

Expanded DMM role in monitoring and reporting on

EIM resource sufficiency test performance and issues

• Special monthly reporting beginning in September

– Aimed at providing quicker feedback on performance

– Additional information in quarterly reports:http://www.caiso.com/market/Pages/MarketMonitoring/MarketMonitoringReportsPresentations/Default.aspx#special

• DMM is working with stakeholders and CAISO on development of

reporting metrics and analysis

– Standardized metrics for all BAAs and CAISO

– Provision of detailed underling data to participants

– Analysis of potential changes in how requirement and available supply which are being

discussed in stakeholder process

• Enhanced informational reporting to Governing Body

http://www.caiso.com/market/Pages/MarketMonitoring/MarketMonitoringReportsPresentations/Default.aspx#special

CAISO Public

Upward capacity/sufficiency test failure intervals by incremental

import limit amount

0

30

60

90

120

150

180

210

240

270

300

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Num

ber

of

15

-min

ute

inte

rvals

Perc

ent

of fa

ilure

s

0 0 to 250 250 to 500 500 to 1,0001,000 to 2,000 2,000 to 3,000 3,000 to 4,000 Test failure intervals

CAISO Public

The ISO implemented several market enhancements designed to

address concerns raised following load curtailment event of August 2020

CAISO Public

Significant volumes of exports clearing the day-ahead market were

curtailed through residual unit commitment process on high load days

0

1,000

2,000

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5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

17181920211718192021171819202117181920211718192021171819202117181920211718192021

17-Jun 18-Jun 9-Jul 19-Jul 28-Jul 11-Aug 6-Sep 8-Sep

Export

s (

MW

h)

Economic export dropped in RUC

Self-scheduled exports not backed by non-RA resources dropped in RUC

Self-scheduled exports backed by non-RA resources dropped in RUC

Economic export cleared

Self-scheduled exports not backed by non-RA resources cleared (LPT)

Self-scheduled exports backed by non-RA resources cleared (PT)

CAISO Public

On these days, some exports rebid into the real-time market cleared,

ultimately meeting high demand in other regions

0

2,000

4,000

6,000

8,000

10,000

12,000

17181920211718192021171819202117181920211718192021171819202117181920211718192021

17-Jun 18-Jun 9-Jul 19-Jul 28-Jul 11-Aug 6-Sep 8-Sep

Export

s (

MW

h)

Economic bids, not clearedReal-time self-schedules, not clearedEconomic bids clearedReal-time self-schedules, clearedDay-ahead exports, cleared in RUC and real-time

CAISO Public

High priority exports and wheels

• Under August 4 tariff changes, exports clearing both the day-ahead market

and residual unit commitment process can be curtailed before internal load in

the real-time market.

• Exports are now required to demonstrate support from non-resource

adequacy capacity to have equal priority with native load if curtailment is

necessary. Thus far, no curtailment has been necessary.

• Under August 4 tariff changes, wheeling transactions are required to register

45 days in advance of the month and must demonstrate both a firm power

supply contract to serve the load of an external load serving entity and

monthly firm transmission to the CAISO border to qualify for prioritization

equal to or above native load. Thus far, no curtailment has been necessary.

CAISO Public

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1 2 3 4 5 6 7 8 91

01

11

21

31

41

51

61

71

81

92

02

12

22

32

42

52

62

72

82

93

03

1 1 2 3 4 5 6 7 8 91

01

11

21

31

41

51

61

71

81

92

02

12

22

32

42

52

62

72

82

93

03

1

August September

MW

August scheduled MW September scheduled MW

August high-priority registered MW September high-priority registered MW

High priority wheels were not scheduled in the market on most days

CAISO Public

The volume of wheeled energy increased significantly, compared to

the summer of 2020

-1,500

-1,000

-500

0

500

1,000

1,500

01-J

un

11-J

un

21-J

un

01-J

ul

11-J

ul

21-J

ul

31

-Ju

l

10-A

ug

20-A

ug

30-A

ug

09-S

ep

19-S

ep

29-S

ep

Import into NP26 Export from NP26

Import into SP26 Export from SP26

MW

Regional source and sink of day-ahead wheels excluding TORs and ETCs

(HE17-HE21 between June 1 and September 31)

CAISO Public

Source and sink of day-ahead wheels excluding TORs and ETCs

-1,500

-1,000

-500

0

500

1,000

1,50001-J

un

11

-Ju

n

21-J

un

01-J

ul

11-J

ul

21-J

ul

31-J

ul

10-A

ug

20-A

ug

30

-Au

g

09-S

ep

19-S

ep

29-S

ep

I_PVWEST I_MALIN500 I_NOB I_SYLMAR

I_CRAG I_MEAD230 I_TRCYCOTP I_CFEROA

I_MDWP I_CFETIJ E_MEAD230 E_PVWEST

E_WESTWING500 E_MCCULLOUG500 E_ELDORADO230 E_MALIN500

E_NOB E_MIR2 E_MDWP

MW

(HE17-HE21 between June 1 and September 31)

CAISO Public

In the real-time market, less than 90% of system resource adequacy

capacity was bid or self-scheduled during high load hours

MW% of total

RA Cap.MW

% of total

RA Cap.MW

% of total

RA Cap.MW

% of total

RA Cap.Must-Offer:

Gas-fired generators 19,388 17,751 92% 17,750 92% 17,417 90% 17,386 90%

Other generators 1,415 1,324 94% 1,324 94% 1,312 93% 1,311 93%

Subtotal 20,803 19,075 92% 19,074 92% 18,729 90% 18,697 90%

Other:

Imports 3,185 3,091 97% 3,041 95% 3,159 99% 2,886 91%

Imports - MSS 293 293 100% 236 81% 293 100% 240 82%

Use-limited gas units 8,581 8,264 96% 8,212 96% 8,249 96% 8,189 95%

Hydro generators 5,889 5,244 89% 4,901 83% 5,201 88% 4,870 83%

Nuclear generators 2,893 2,887 100% 2,868 99% 2,874 99% 2,856 99%

Solar generators 3,786 3,767 99% 2,702 71% 3,724 98% 2,697 71%

Wind generators 1,310 1,306 100% 964 74% 1,304 100% 1,013 77%

Qualifying facil ities 881 859 98% 822 93% 846 96% 804 91%

Demand response 261 261 100% 188 72% 259 99% 109 42%

Storage 1,166 1,071 92% 1,048 90% 1,057 91% 998 86%

Other non-dispatchable 362 344 95% 330 91% 333 92% 331 91%

Subtotal 28,607 27,387 96% 25,312 88% 27,299 95% 24,993 87%

Total 49,410 46,462 94% 44,386 90% 46,028 93% 43,690 88%

Resource type

Total

resource

adequacy

capacity

(MW)

Day-ahead market Real-time market

Adjusted for

outages

Bids and

self-schedules

Adjusted for

outages/availability

Bids and

self-schedules