J U L Y 8 - 1 0 , 2 0 1 4 | N E P O O L M A R K E T S C O M M I T T E E

Matt BrewsterM A R K E T D E V E L O P M E N T

4 1 3 . 5 4 0 . 4 5 4 7 | M B R E W S T E R @ I S O - N E . C O M

Reliability requirements for capacity zones

FCM Local Sloped Demand Curves

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ISO intends to use existing reliability requirements to design capacity zones demand curves

• ISO-NE is not proposing to change how the locational resource requirements (i.e., LSR, TSA, LRA, MCL) are determined as part of the demand curve project– Current requirements for capacity zones will be used to establish curve

shape and performance criteria (as was done for the system curve)

• Several questions submitted by stakeholders pertained to methods used to establish capacity zone requirements

• The concepts and methodologies are fully-described in the annual report of ICR-related values (2017/18 report) and Section III.12 of Market Rule 1– This presentation highlights the relevant points about resource

requirement determinations for capacity zones

IMPORT-CONSTRAINED CAPACITY ZONESResource requirements: LSR, LRA, TSA

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For import-constrained capacity zones, the requirements define a minimum capacity amount

• Import-constrained zones are areas that, due to transmission constraints, are close to the threshold where local resources and transmission import capability may not be enough to reliably serve local demand

• The Local Sourcing Requirement (LSR) is the minimum amount of capacity that must be located within an import-constrained zone to satisfy resource adequacy and transmission security requirements

• LSR is set at the higher of:– Local Resource Adequacy (LRA) – slide 5– Transmission Security Analysis (TSA) – slide 6

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Local Resource Adequacy (LRA)

• Minimum amount capacity that must be located in an import-constrained zone to meet system 0.1 days/year LOLE criteria

• Probabilistic analysis which models the transmission interface limit between the zone under study and the rest of the system

• Import zone target LOLE is 0.105 days/year– 0.105 days/year LOLE is the point at which resources available within

the zone are insufficient; further reduction in local capacity would cause the system LOLE to increase above the 0.1 days/year criteria

– Allowance for transmission-related LOLE of 0.005 days/year

• Market Rule 1 Section III.12.2.1.1

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Transmission Security Analysis (TSA)

• Deterministic reliability screen using operable capacity analysis to develop a resource requirement for import-constrained zones which is sufficient to allow the system to operate through stressed conditions

• Analysis models first contingency (N-1) and second contingency (N-1-1) conditions for the zone

• Due to deterministic and transmission-security nature of TSA, some assumptions differ from those used to establish ICR

• Market Rule 1 Section III.12.2.1.2

EXPORT-CONSTRAINED CAPACITY ZONESResource requirement: MCL

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For export-constrained capacity zones, the requirement defines a maximum capacity amount

• Export-constrained zones are areas that, due to transmission export constraints, could have locked-in resources that cannot be used to reliably serve the demand in the rest of the system

• The Maximum Capacity Limit (MCL) is the maximum amount of capacity that can be procured from an export-constrained zone to meet the ICR

• MCL = ICR New England – LRA Rest of New England (outside export zone)

– ICR New England is the total amount capacity needed for the system – LRA Rest of New England is the minimum amount of capacity required outside the

export-constrained zone to meet 0.1 days/year LOLE

• Market Rule 1 Section III.12.2.2