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Performance-based Regulation Market in PJM
www.pjm.com
based Regulation Market in PJM
PJM©2014
Eric Hsia
Manager, Performance Compliance
NJ Energy Storage Working Group
July 29, 2014
• October 2011 – FERC Order 755 issued
• March 2012 – PJM Original filing w/ Benefits Factor
• May 2012 – Acceptance Order, subject to additional compliance filing
• October 2012 – PJM “go live” of PBR, but without incentive payment structure
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• October 2012 – PJM “go live” of PBR, but without incentive payment structure
• November 2012 – Acceptance Order, subject to additional compliance filing
• January 2013 – PJM Compliance Filing w/ Mileage Ratio
• July 2013 – Acceptance Order, subject to additional compliance filing
• October 2013 – Final Acceptance Order
www.pjm.com
FERC Process
FERC Order 755 issued
PJM Original filing w/ Benefits Factor
Acceptance Order, subject to additional compliance filing
PJM “go live” of PBR, but without incentive payment structure
PJM©20142
PJM “go live” of PBR, but without incentive payment structure
Acceptance Order, subject to additional compliance filing
PJM Compliance Filing w/ Mileage Ratio
Acceptance Order, subject to additional compliance filing
Final Acceptance Order
5 MAJOR COMPONENTS OF
PERFORMANCE-BASED REGULATION
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PERFORMANCE-BASED REGULATION
5 MAJOR COMPONENTS OF
BASED REGULATION
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BASED REGULATION
1. TWO REGULATION SIGNALS
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1. TWO REGULATION SIGNALS
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Dynamic Signal (RegD):More ‘zero’ crossings“Energy neutral” over operating hourStrong correlation with system frequency
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Traditional Signal (RegA):Greater time constant, more staying power
Slower rampingStrong correlation with system ACE
Sample RegA Test Signal (MW)
Dynamic Signal (RegD):More ‘zero’ crossings“Energy neutral” over operating hourStrong correlation with system frequency
Two Signals, Complimentary to System Control
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-1.100
-0.600
-0.100
0.400
0.900
00:00 07:12 14:24 21:36 28:48 36:00
No
rma
lize
d R
eg
A S
ign
al
Time (MM:SS)
Sample RegA Test Signal (MW)
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Two Signals, Complimentary to System Control:5 Hour sample of production signal
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• What is the relative impact on
system control with fast vs.
traditional resources?
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• What is an optimal mix of fast vs.
traditional resources, and how does
that impact the Regulation
Requirement?
www.pjm.com
KEMA Report (2011)
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2. CALCULATING MILEAGE
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. CALCULATING MILEAGE
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• Mileage is the absolute sum of movement of the regulation signal in a given
time period (∆MW/MW)
• Resources following the dynamic signal will move much more than those on
traditional signal
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Historical Jan-Jun 2012 Signal Mileage
Traditional
Mileage
Mileage is the absolute sum of movement of the regulation signal in a given
Resources following the dynamic signal will move much more than those on
March 7, 2014
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15 16 17 18 19 20 21 22 23 24 25 26 27 28
Jun 2012 Signal Mileage
Traditional Dynamic
March 7, 2014Dynamic Mileage = 16.5Traditional Mileage = 6.4
3. CALCULATING PERFORMANCE
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. CALCULATING PERFORMANCE
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Accuracy – the correlation or degree of relationship between control signal and regulating unit’s response
Delay – the time delay between control signal and point of highest correlation (from A).
Precision – Difference between the areas under the curve for the control signal and the regulating unit’s response.
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Composite Performance Score = A [ScoreC] + B [ScoreD] + C [Score
– A, B, C are scalars from [0..1], total to 1 – Produces a weighted average of component scores
Performance Score – 3 pieces
the correlation or degree of relationship between control signal and regulating unit’s response
the time delay between control signal and point of highest correlation (from A).
Difference between the areas under the curve for the control signal and the regulating unit’s response.
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] + C [ScoreP]
Produces a weighted average of component scores
Performance Score
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Performance Score – Example, Combine Cycle
Accuracy = 0.95
Delay = 0.66
Precision = 0.74
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Total Score = 0.78
1/6 1/11 1/16 1/21 1/26 1/31
Steam
Average Performance Scores by Resource Type (Jan ‘13)
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Pe
rfo
rma
nce
Sco
re
1/6 1/11 1/16 1/21 1/26 1/31
Battery
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1/1 1/6 1/11 1/16 1/21 1/26
Pe
rfo
rma
nce
Sco
re
Hydro
Average Performance Scores by Resource Type (Jan ‘13)
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0.4
0.5
0.6
0.7
0.8
0.9
1.0
1/1 1/6 1/11 1/16 1/21 1/26
Pe
rfo
rma
nce
Sco
re
Demand-side Resources
4. EFFECTIVE MEGAWATTS (THE BENEFITS FACTOR)
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. EFFECTIVE MEGAWATTS (THE BENEFITS FACTOR)
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• Benefits factor provides a sliding scale that makes dynamic resources more
desirable until the optimal resource mix of dynamic and traditional resources is
reached.
Benefits Factor of First Resource
Benefits Factor of Second Resource
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Benefits Factor of Second Resource
Point when RegD resource is equivalent to RegA resource
Benefits Factor
Benefits factor provides a sliding scale that makes dynamic resources more
desirable until the optimal resource mix of dynamic and traditional resources is
Benefits Factor of Second Resource
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Benefits Factor of Second Resource
Point when RegD resource is equivalent to RegA resource
Point of Diminished Returns
5. TWO PART OFFER, TWO PART SETTLEMENT
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5. TWO PART OFFER, TWO PART SETTLEMENT - EFFECTED BY 1-4
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Regulation Offer
CostUp to limits described in as
described in M11, Section 3.2.1 and Manual 15,Section 2.8
Performance
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• The $/∆MW will be multiplied by the ratio of ∆convert to ($/MW)
Capability ($/MW)
Reservation Cost for MW which
includes the Fuel Cost increase and $12 Margin Adder
Performance ($/∆MW)
Is the incremental cost of MW movement
which includes Cost Increase due to Heat Rate Increase during
non-steady state operation and Cost Increase in VOM
Regulation Offer
PriceUp to 100 $/MWH As described in
M11, Section 3.2.1
Regulation Offers – Cost and Price
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MW will be multiplied by the ratio of ∆MW/MW for the signal that resource follows to
Capability ($/MW)
the price to reserve MWs for regulation
Performance ($/∆MW)
the price to provide regulation movement
The Capability Offer is adjusted as follows:
Resource owner’s Offer for reserving MW’s
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Benefits factor translates a Dynamic resource’s MWs into traditional MWs to estimate Effective MWs. For Traditional
resources, this value is “1”.
The Capability Offer is adjusted as follows:
Qualified Regulation MW’s
Resource owner’s Offer for
Adjusted Capability Offer
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Average of last 100 hours of performance scores
Benefits factor translates a Dynamic resource’s MWs into traditional MWs to estimate Effective MWs. For Traditional
resources, this value is “1”.
30 day average of historical
The Performance Offer is adjusted as follows:
Resource owner’s Offer for MW’s movement
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Benefits factor translates a Dynamic resource’s MWs into traditional MWs to estimate Effective MWs. For Traditional
resources, this value is “1”.
30 day average of historical mileage
The Performance Offer is adjusted as follows:
Qualified Regulation MW’s
Adjusted Performance Offer
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Average of last 100 hours of performance scores
1 YEAR+ --
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-- RESULTS
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Pricing
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Milford Control Center:
Solar + Storage
Milford Control Center:
Solar + Storage
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Laurel Mountain, West Virginia (AES Energy Storage)
Largest Li-ion battery in the world
32 MW, 8 MWh
Provides fast-response Frequency Regulation in PJM’s Wholesale Markets
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Laurel Mountain, West Virginia (AES Energy Storage)
response Frequency Regulation in PJM’s Wholesale Markets
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Ecoult and Deka Ultrabattery ®
3 MW (<3 MWh)
Regulation Service, from behind the meter
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Viridity Energy and Axion PowerCube™
500 kW
Regulation Service, from behind the meter
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Viridity Energy and Axion PowerCube™
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VCharge, Inc
4-5 kW (aggregated to >100 kW)
Regulation Service, from behind the meter at multiple locations
PJM©201426
from behind the meter at multiple locations
Market Test
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Credit: Tim Shaffer for The New York Times
Market Test – Electric Vehicles and Ancillary Services
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