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Modeling Work Group

WECC - TEPPCTechnical Advisory Subcommittee Meeting

August 20, 2009

Tom MillerPacific Gas & Electric

Status and Outlook

Today’s Topics

Inter-Regional Wheeling Cost Modeling — Approval Item

Hydro Modeling Task Force UpdateReview of Data-Set Enhancements

for 2009 Study CycleModeling Needs for 2010 Study Cycle

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Inter-Regional Wheeling Cost Modeling

Approval Item

Background:Variable Wheeling Costs Proposal

MWG presented investigative studies results at TAS Meeting May 27th

Posted discussion paper and study results Received supporting comments and those

opposing now take “neutral” position MWG recommends implementation of

proposed Variable Inter-Regional Transmission Wheeling Cost Modeling

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Highlights: Inter-regional Wheeling Costs THE PROBLEM: Inter-regional variable wheeling costs are currently

modeled as “zero” cost in the TEPPC data set. From production simulation results performed for the 2008 Study Plan there is concern that Northwest imports into California may have been too high, which “zero” wheeling costs may have been a contributing factor.

ECONOMIC MARGINAL “HURDLE” RATE: Wheeling costs act as a marginal “hurdle” rate between regions to mimic economic realities of transporting economy power form region to region or across multiple regions.

IMPLEMENTATION: will be performed on the 2019 and 2029 cases currently being prepared for the 2009 Study Cycle

MODELING: Inter-regional Wheeling Costs Modeling: PROMOD models 11 pools across WECC Wheeling costs are fully incorporated into PROMODs economic dispatch

algorithm

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Proposed Inter-regional Wheeling Costs Modeling

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Study Year 2019 Study Year 2029Forward Reverse Forward Reverse

Region Connections $/MWh $/MWh $/MWh $/MWhAZNMN - RMPP 5.4$ 2.6$ 6.6$ 3.2$ NWPP - RMPP 7.3$ 2.8$ 8.9$ 3.4$ CANADA - NWPP 4.7$ 2.8$ 5.7$ 3.4$ BASIN - CALIF_NORTH 5.4$ 3.0$ 6.6$ 3.6$ BASIN - CALIF_SOUTH 2.3$ 2.3$ 2.8$ 2.8$ BASIN - RMPP 5.4$ 2.7$ 6.6$ 3.3$ BASIN - NWPP 5.4$ 2.7$ 6.6$ 3.3$ BASIN - AZNMNV 5.4$ 2.7$ 6.6$ 3.3$ CALIF_NORTH - CALIF_SOUTH -$ -$ -$ -$ CALIF_NORTH - NWPP 5.9$ 6.1$ 7.2$ 7.5$ NWPP - CALIF_SOUTH 5.9$ 7.7$ 7.2$ 9.4$ CALIF_SOUTH - AZNMNV 2.6$ 2.6$ 3.2$ 3.2$

• Wheeling rates derived from SSG-WI 2008 Base Case (2% Escalation)• Further calibration work is expected as simulations are performed

Motion to Approve Variable Inter-regional Wheeling Costs are

expected to improve economic dispatch and resulting power transfers between regions from PROMOD production simulations

Questions? Motion: TAS approves implementation of

variable inter-regional transmission wheeling costs using the methodology proposed by MWG starting with the 2019 and 2029 cases in the 2009 study program

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Hydro Modeling Task Force Update

Hydro Generation Modeling Methods

Historical Data Peak Shaving – shapes energy to peak loads Constant Generation – good for run of river Proportional Load Following – shapes monthly

energy proportional to load Hydro Thermal Coordination – adjusts PLF

results so more generation during high prices.

Canada All plants modeled

using PLF except Peace River which used peak shaving. Converting Peace River to HTC for 2019 case. ~4000 MW capacity. W A C Bennett Dam across the Peace River

Northwest

Methods in use. 7 % nonflexible 26 % historical 67 % PLF

The 2019 study may model 3 formerly PLF plants (11,859 MW capacity) using HTC to facilitate wind integration

Grand Coulee Dam across the Columbia River

California Most plants are modeled

using historical data aggregated to preserve confidentiality then disaggregated to plant level (Irina Green).

23% of 2003 generation uses PLF

We experimented with HTC for Big Creek with limited success. Will revisit HTC but most likely not for 2019 case.

O'Shaughnessy Dam across the Tuolumne River

Western-Lower Colorado

Historical data for all plants.

Plants don’t follow load (except Hoover) so we expect to stay with this approach.

Hoover Dam across the Colorado River

Review of Data-Set Enhancements for2009 Study Cycle

Expanding Needs Existing process:

Transmission congestion Variable costs Limited Scenarios

Expanding Process: Capital, On-going Fixed and Variable costs Renewable Integration Requirements and Costs Transmission and Distribution costs Transmission congestion and system reliability Data set for comprehensive load, resource and policy

scenarios

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Modeling Efforts2008 Study 2009 Study Cycle2017 Cases 2012 Near-Term 2019/2029 Cases

Operating Parameters Updated Updated UpdatedCombined Cycle Modeling Avg. Heat Rate Multi-Heat Rate Multi-Heat RateFuels-Sensitivities Yes Yes YesCO-2 Emissions Yes Yes YesMust-take partial partial Assess

2008 Study 2009 Study Cycle2017 Cases 2012 Near-Term 2019/2029 Cases

Canada Fixed/PLF Pk-S/Fixed/PLF Fixed/PLF/HTCNorthwest Fixed/PLF Fixed/PLF Fixed/PLF/HTCCalifornia Fixed Fixed/PLF Fixed/PLF/HTCWECC-Other Fixed Fixed FixedHydro Sensitivities na Yes Yes

2008 Study 2009 Study Cycle2017 Cases 2012 Near-Term 2019/2029 Cases

CA Demand Response na na UpdateWECC Demand Response na na UpdateVariable Wheeling na na Pending

THER

MAL

HYDR

OSY

STEM

Highlights of Modeling Hydro and Thermal Modeling enhancements improve

operational flexibility attributes Combined-cycle mid-range dispatch Hydro PLF allows shaping to load HTC allows “market” response to marginal costs, which helps

mitigate congestion Fuel and Hydro sensitivities reveal impacts to system across a

range of conditions

Demand Response Programs provide “peak shaving” Variable Wheeling Costs create “hurdle rate” for more

plausible inter-regional power transfer

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Collectively, these modeling improvements are expected to improve production simulations with better estimates of variable costs, congestion and CO-2 emissions

Modeling Needs for 2010 Study Cycle and

Beyond

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Modeling Frontiers

GHG

HydroDispatch

Renewables

TransmissionCongestion

Demand

TEPPC- CONGESTION AND ECONOMIC SCREENING STUDIES

Dynamic Hydro Modeling?

Hydro-Thermal Optimization?

How do we forecast congestion?

Improve Modeling to support congestion metrics

Load-Wind-Hydro Correlation?

Intermittency?Ancillary Services

Modeling?

Energy efficiency?Plug-in Hybrids?

Price Responsive DRP?

CHP?GHG

Adders?

Potential Modeling Frontiers

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Anticipate need for close coordination between TAS Work Groups , Sub-regional Planning Groups and PCC to strive for consistent data and modeling assumptions

2009 Study Cycle 2010 Study CycleLong-term Tools Task Force 2019/2029 Cases

Studies/Scenarios Support TBDScreening Model Support TBDResource and Transmission Costs Support TBD

Variable Generation Sub-CommitteeCoincidental Loads/Renewables Modeling Support TBDIntegration Tools Support TBDOperational Flexibility Support TBD

Ancillary Services Modeling Assess TBD

NEW

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Comments & Questions?

Please send any comments, concerns and/or questions to Tom Miller

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Reference Slides

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Wheeling Costs do Impact to Economic Dispatch

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Annual Energy Difference: PC5B 2012 M-HydroPLF vs. PC5B 2012 M-HydroPLF+VarWhl

(8,000)

(6,000)

(4,000)

(2,000)

0

2,000

4,000

6,000

8,000

10,000

12,000

CoalGas Oil

PCUra

nW

H

Convent

ional H

ydro

Pumpe

d Sto

rage

Small

Hyd

ro Bio Ref

Wood

Geoth

erm

al

Solar

Wind

Undefin

ed*

GWh

CANADA

NWPP

BASIN

RMPP

California

AZNMNV

California Native Generation Increases and Imports DecreaseNWPP and AZNWNV Generation Decreases

Southern California Imports

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EAST OF COLORADO RIVER (EOR)

(15,000)

(10,000)

(5,000)

0

5,000

10,000

15,000

PC5B-1 PC5B-3 2004 2005 2006 2007

WEST OF COLORADO RIVER (WOR)

(15,000)

(10,000)

(5,000)

0

5,000

10,000

15,000

PC5B-1 PC5B-3 2004 2005 2006 2007

Wheeling Cost Impacts: Imports into Southern California decrease closer to historical levels

Note: Scale much larger than COI and PDCI

Wheeling Costs Impacts Imports Flows PDCI

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PACIFIC DC INTERTIE (PDCI)

(4,000)

(3,000)

(2,000)

(1,000)

0

1,000

2,000

3,000

4,000

PC5B-1 PC5B-3 2004 2005 2006 2007

Wheeling Costs Impacts Imports Flows PACI

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COI

(5,000)

(4,000)

(3,000)

(2,000)

(1,000)

0

1,000

2,000

3,000

4,000

5,000

6,000

PC5B-1 PC5B-3 2004 2005 2006 2007

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EAST OF COLORADO RIVER (EOR)

(15,000)

(10,000)

(5,000)

0

5,000

10,000

15,000

PC5B-1 PC5B-3 2004 2005 2006 2007

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WEST OF COLORADO RIVER (WOR)

(15,000)

(10,000)

(5,000)

0

5,000

10,000

15,000

PC5B-1 PC5B-3 2004 2005 2006 2007

How “Hurdle” Rate WorksPROMOD Economic Dispatch PROMOD optimizes in two steps: First with each pool meeting its own load and then

with pool-to-pool interchange available

This two step algorithm is only for purposes of being able to measure which generators ramp up to provide exports and which generators back down to receive imports, within each area and pool.

The price used in solving the interchange is internal to the optimization (not a clearing price from the first step), basically the pool reference price.

If pool A has a reference price of 60 $/MWh and pool B has a reference price of 50 $/MWh, and interchange is enabled between the pools, pool-to-pool interchange will occur up to: the point where the reference prices balance, the point where the reference price difference is equal to the hurdle rate.

Since the pool-to-pool interchange is being solved within the security constrained economic dispatch, transmission constraints will also restrict the amount of pool-to-pool energy

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Proposal for DRP Modeling

Objective: to model DRP as supply resources based on forecasts reported to LRS for 2019 and 2029.

Proposed Modeling Methodology: “high” cost combustion turbine as proxy for DRP Limit dispatch to ≤ 100 hours per year

WECC Wide DRP amounts to be derived & consistent with sub-regional DRP programs reported to LRS

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2009 2019 2029MW MW MW

California 2800 4767 tbdNorthwest 500 900 tbdDesert SW 620 900 tbdOther 380 383 tbdWECC Total 4300 6950 tbd

Hydro Sensitivities

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High Medium Low StatusCanada 1999 2002 2003 Northwest 1999 2002 2003 East 1999 2002 2003 California 2005 2003 2002

HOLD SLIDES

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Our Challenge • Provide Economic intelligence needed by project developers: –demand

side services, new resources, or new transmission Key drivers & Uncertainties

• Purpose: Inform decision-making about feasibility of economic transmission expansion

Transmission Expansions Require Long-lead times (8-10 years)

• Assess benefits and costs of transmission expansion Expansion Plans run to Investigate effectiveness of transmission expansions for reducing congestion costs

• Analytical objectives Identify the critical few variables that really matter Identify potential interactions that drive results Scope full range of possible conditions

• Provide Economic intelligence needed by project developers: –demand side services, new resources, or new transmission

Key drivers & Uncertainties

• Purpose: Inform decision-making about feasibility of economic transmission expansion

Transmission Expansions Require Long-lead times (8-10 years)

• Assess benefits and costs of transmission expansion Expansion Plans run to Investigate effectiveness of transmission expansions for reducing congestion costs

• Analytical objectives Identify the critical few variables that really matter Identify potential interactions that drive results Scope full range of possible conditions

2009 Study

1. Near-term (2012) to investigate congestion sensitivity to gas prices and hydro conditions

2. Medium-term (2019) to investigate potential congestions under different incremental resource portfolios

3. Long-term (2029) to investigate transmission overlay options.

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Renewables

Re-Dispatch shared by thermal and hydro dispatchable resources

Deeper penetration of intermittent resources may require additional ancillary services Regulation Load Following Back-up reserves

Correlation between load and wind production important in peak periods

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Canada

0

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J F M A M J J A S O N D

aMW

Low Med High

East

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J F M A M J J A S O N D

aMW

Low Med High

California

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J F M A M J J A S O N D

aMW

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Water ConditionsLow Medium High

NW 2003 2002 1999East 2003 2002 1999Calif 2002 2003 2005Canada 72-73 52-53 47-48

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Future Work

Focus: MWG efforts aligned to WECC Expansion Transmissions Studies

Tool Assessment for Future Congestion and Economic Metrics Alignment of SWG and DWG efforts Study Planning Cycle

Advance Modeling Techniques Advance Data Requirements Advance Studies