CAISO Public Page 1
CAISO Public
Capacity Trading: The CAISO Experience
Session 4
Cross-border Energy and Capacity Trading
Mark Rothleder – VP Market Quality and Renewable Integration
August 20, 2018
CAISO Public Page 2
Today’s Electric Grid
CAISO Public Page 3
The balancing of supply and demand
Supply
Demand
Inter-Regional
Interchange Sales Purchases
Load
Losses
Power
Generated
Decrease Increase 60
Frequency
Supply
Demand
Inter-Regional
Interchange Sales Purchases
Load
Losses
Power
Generated
Decrease Increase 60
Frequency
CAISO Public Page 4
General Resource Adequacy Concepts
• System Capacity
– Capacity eligible to satisfy system planning reserve
margin including import capacity
• Local Capacity
– Resource capacity that is effective in relieving
constraint within defined transmission constrained
area
• Flexible Capacity
– Capacity of a resource that is operationally able to
respond to Dispatch Instructions to manage
variations in load and variable energy resource
output.
CAISO Public Page 5
Annual procurement & demonstration of generic RA
Local
regulatory
authority (LRA)
mandates
procurement of
90% of next
year’s peak
load forecast.
CPUC
LSE
LSE
Supplier
Supplier
CPUC CAISO
“You must procure”
Bi-lateral procurement activity
LSE penalties ($) CPM decision (MW)
Demonstrations
CAISO Public Page 6
Monthly procurement & demonstration of generic RA
CPUC
LSE
LSE
Supplier
Supplier
CPUC CAISO
“You must procure”
Bi-lateral procurement activity
LSE penalties ($)
Demonstrations
Outage replacement & CPM
Local
regulatory
authority (LRA)
mandates
procurement of
115% of next
month’s peak
load forecast.
CAISO Public Page 7
“Import Deliverability” is assigned every year to LSEs
• Assignment of RA import capability to LSEs –
Maximum import capability (MIC) on each intertie is available
to LSEs for procuring RA capacity from external resources; it is
not assigned directly to external resources.
• Process for allocating MIC to LSEs – Steps 2-13 in Tariff
Section 40.4.6.2.1, Available Import Capability Assignment
Process.
• Annual determination of MIC – MIC values for each
intertie is calculated annually for a one-year term.
CAISO Public Page 8
MIC Methodology - Step 1
• Historically Based
– Select 4 hours by choosing 2 in each one of the last two years
(and different days within the same year) with the highest total
net import level when peak load was at least 90% of the annual
system peak load.
– The average of net import schedules (0 MW is assigned when
net imports are negative) + the average of unused ETC
(adjusted for future year availability) technically should
represent the Maximum Import Capability (MIC) for each tie.
– In order to assure that all pre-RA import commitments (already
paid by ratepayers) are allowed to count for RA until they
expire, an uplift is added to the above established methodology
for certain branch groups and this higher number is published
and divided among LSEs as MIC.
CAISO Public Page 9
Forward-looking MIC – what motivated the change
• Low RA import capacity at certain interties limits ability
of external resources to provide RA capacity and their
ability to obtain project financing
– MIC is calculated on amount of energy ISO Balancing Authority
Area (“BAA”) imported historically during peak system load
hours
– Low MIC values at certain interties limited use of external
resources in those areas to meet RA requirements
– Inability to offer RA created a disadvantage for external
renewable resources seeking contracts with load-serving
entities within the ISO
– Project financing for new resources depends on sufficient and
stable long-term contractual revenue stream
CAISO Public Page 10
Expanding Resource Adequacy (“RA”) Import Capability
Solution consists of two components
• Expansion of RA import capability is an element of public policy
objective for Transmission Planning Process (“TPP”) to identify
needed transmission
– Based on amount of external resources in 33% RPS portfolios,
specify required or “target” Maximum Import Capability (“MIC”) MW
values for RA deliverability
– Determine whether additional network upgrades are needed to
support target MIC MW values
– Include these upgrades in Comprehensive Transmission Plan
• In annual MIC assessment, expand MIC values to target levels
as required in order to meet the public policy objectives
CAISO Public Page 11
Appendix
CAISO Public Page 12
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
26,000
28,000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
MW
Generation Breakdown --- 02/18/2018
Nuclear Geothermal/Biomass/Biogas Thermal Hydro
Net Interchange Wind Solar Curtailment
Total CAISO Load CAISO Net Load
Net Load = Load -Wind -SolarRenewablesCurtailment
On Sunday, February 18, 2018 the CAISO experienced a
minimum net-load of 7,149 MW @ 14:06 3-hr, 13,597 MW ramp met by:
- Import ~ 62%
- Gas – 28%
- Hydro – 10%
70.6% of the load
served by Renewable
Resources
CAISO Public Page 13
In 2017, the CAISO peak load was 50,116 MW and
occurred at 15:58:24 on Friday, September 1, 2017
15:58 to 18:44
• Net Load peaked 2
hours and 46
minutes after peak
demand
• Peak load
decreased by
2,148 MW
• Solar production
decreased by
7,199 MW
• Net Load increased
by 5,258 MW 0
4,000
8,000
12,000
16,000
20,000
24,000
28,000
32,000
36,000
40,000
44,000
48,000
52,000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Lo
ad
& N
et L
oad
(M
W)
Generation Breakdown --- 09/01/2017
Nuclear Geothermal/Biomass/Biogas
Thermal Hydro
Net Interchange Wind
Solar Curtailment
Total CAISO Load CAISO Net Load
Net Load = Load -Wind -Solar
Load