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Market Insights – Spring Report

Providing Asset and Operations Performance Management and Remote Operations software solutions to leading Power Generators across the globe

Learn more at:www.ge.com/digital/applications/remote-operations

The changing Midwest gridDr. Renuka Chatterjee, MISO

MISO’s regional portfolio evolution will have a direct impact on planning processes, markets and operational tools

6

47%27%

15%

3%8%

2030 Generation Mix (% MWH)


27%

28%9%

4%

32%

Renewables

2030 projection compiled from IRPs, investor reports and other sources

76%

7%13%

4%0%


Other Nuclear Gas Coal

Generator Interconnection requests reinforce the expectation of a resource portfolio shift

• Resource interconnection queue consists of 70 GW

• Renewables (solar and wind) account for over 56 GW of these requests

• Significant amounts of renewable projects are expected to continue to enter into the queue

• From 2018 to 2019, solar requests increased from 34.4 GW to 51.2 GW

7

.

As of 4/16/20

Meanwhile, the controllable resources that have historically been used to balance the system are retiring

8

2005200620072008200920102011201220132014201520162017201820192020

Generation Retirement Trend by Fuel Type(Capacity in MW)

Coal Gas Nuclear Oil Diesel Other

13 7 242 98 234

786 1081 1024 880 931

1929

7001

953

4410 4575

170

73%22%

2%2% 0% 1%

Total Approved Retirements since 2005 (24.3 GW)

2,999

Future announced retirements of select

members, through 2030

515

4,231

9

As the composition of the resource fleet shifts, the reliability needs of the system change…

January 17, 2018 September 15, 2018 January 31, 2019

Cold weather in South

Region, excess generation

in the North/Central

Regions unable to move

south due to transmission

limitation.

Unseasonably warm

temperatures in the South

Region resulted in higher

load than anticipated; forced

outages impacted

generation availability.

Historic cold in the North

and Central Regions drove

high load conditions; excess

generation in the South

Region unable to move

north due to transmission

limitation

$300-$1000

$100-$300

$60-$100

$40-$60

$20-$40

$(10)-$20

$(1000)-$(10)

$/MWh

…creating a reliability imperative for change

10

Transitional and transformational enhancements must be made today to planning, operations and markets

to ensure continued reliable and efficient operations

• )Industry trends are

accentuating existing reliability challenges

Policy and resource planning decisions are being made now (IRPs,

retirements, investments)

The pace and scope of change is accelerating

with increased diversity across member fleets

11

Member A Member C Member DMember B

Renewables CoalGas NuclearOther

Additionally, MISO must account for and leverage diversity among members and their individual fleets

Figures show utilities’ total energy generated by fuel type, in megawatt-hours. Current figures compiled by S&P Global Market Intelligence. 2030 projections compiled from IRPs, investor reports and other sources.

Cur

rent

G

ener

atio

n M

ixA

nnou

nced

203

0 G

ener

atio

n M

ix

12

The evolving resource mix creates three primary areas of need: Availability, Flexibility and Visibility

Our 2020 focus is on near-term steps that will address both current and longer-term needs

13

Operating HorizonPlanning Horizon Identify Reliability Needs

Importance

2020 Focus

Stakeholders require better information to inform planning and investment decisions

Market prices must better reflect underlying system conditions

Define system reliability needs and capabilities

Develop sub-annual planning + PRA reform

Enhance resource accreditation

Propose scarcity pricing reforms

Annual LOLE does not address 24/7 risk with portfolio evolution

LOLE = Loss of Load Expectation

PRA = Planning Resource Auction

Needs

Define planning constructs that complement state and member roles in Resource Adequacy

Improve pricing for existing productsDevelop necessary new processes, tools and products

Develop analytic methods to define reliability criteria Identify needed attributes in addition to peak hour MWs

13

Base 10% 20% 30% 40% 50%

Rene

wab

le In

tegr

atio

n Co

mpl

exity

Renewable Energy Penetration Levels

Resource Adequacy

Energy Adequacy (Hourly)

Operating Reliability (Steady State)

Operating Reliability (Dynamics)

Total Traditional Reliability Issues

14

The Renewable Integration Impact Analysis (RIIA) indicates system and operational risks increase sharply beyond 30% renewable penetration

Inflection point

Resource Unavailability

Traditional Congestion Issues / Resource Inflexibility

Grid Instability

ERCOT: Current Outlook and Future Developments

Kenan ӦgelmanVP Commercial OperationsERCOT

Electric Power Conference and ExhibitionMay 12, 2020

PUBLIC

Capacity, Demand and Reserves (CDR) Report: Longer-Term Outlook

• Despite COVID-19 impacts, ERCOT region is still forecasted to experience load growth

• Planning reserve margin for summer 2020 increased to 10.6 % as reported in the December CDR; load forecast will be adjusted to reflect COVID-19 impact

• Peak load forecast for summer 2020 may exceed the record set in August 2019

• Majority of new generation projects are renewable and small, flexible gas-fired resources

16

PUBLIC

Natural Gas

53.8%

Coal16.4%

Nuclear5.2%

Wind21.3%

Solar1.0%

Storage0.1%

Other2.1%

Forecasted Summer Installed Resource Capacity in ERCOT

17

• Summer installed generation capacity information provided by December CDR Reports for 2017, 2018, and 2019.

• Reflects operational installed capacity ― excludes units designated as indefinitely mothballed or under extended outage, and accounts for rating changes reported by resource owners.

• Other category includes hydro, biomass-fired units, and DC tie capacity.

2018 Generating Capacity

Capacity available:94,693 MW



Natural Gas

53.6%

Coal15.2%

Nuclear5.1%

Wind22.3%

Sola…Storage0.1%

Other2.1%

Natural Gas

52.8%

Coal14.5%

Nuclear5.1%

Wind23.3%

Solar2.2%

Storage0.1%

Other2.0%



PUBLIC

Looking Ahead: Planned Project Resource Mix

Other planned

resources

CDR-eligibleplanned

resources

18

85.5 GW24.9 GW

• Installed capacity data from November 2019 GIS report.

• *Other includes DC tie capacity, hydro, biomass, petroleum coke (pet coke), hydroelectric, fuel oil, geothermal energy, other miscellaneous fuels reported by developers, and fuel cells that use fuels other than natural gas.

Gas0.8 GW

Wind14.3 GW

Solar9.5 GW

Storage0.3 GW

Gas5.1 GW

Wind17.9 GW

Solar55.2 GW

Storage7.0 GW

Other0.4 GW

PUBLIC

Closer Look at Aug. 12 – Peak Day

19

-1,000

4,000

9,000

14,000

-10,000

10,000

30,000

50,000

70,000

90,000

1 3 5 7 9 11 13 15 17 19 21 23

G, H

, and

I (M

W)

A, B

, C,

D, E

and

F (M

W)

Hour Ending

Hourly Average Demand, Capacity, and Reserves on 8/12/2019

A: Outages B: Quick-Start ResourcesC: Off-Line D: Renewable HSLE: Non-renewable HSL F: Load

PUBLIC

Battery Energy Storage in ERCOT

• Expect an increasing number of Energy Storage Resources (ESRs) to be built

• ERCOT goals for integrating ESRs include:– Increase system awareness of storage device operation and limitations in the control room

– Identify and reduce barriers to energy and ancillary service markets

– Adapt ERCOT system models to facilitate the integration of storage technologies

• The development of operational and market design policies to include ESRs is being considered in the Battery Energy Storage Task Force (BESTF)– Will be implemented in the short term under a “combination model” structure

– Developing rules to use a “single model” structure long-term

20

PUBLIC

ERCOT Goals for Managing Distributed Energy Resources (DERs) on the Grid

21

• Improved reporting

• Mapping of larger DERs to the transmission grid

– Requires cooperation among TSPs, DSPs, REs and the ISO

– Will improve situational awareness

– Underway now

• Nodal pricing for larger DERs

– Registered DGs (>1 MW) are currently paid Load Zone price

– Local price signals would enhance reliability and would align DER behavior with overall market design.

PUBLIC

Impacts of COVID-19 on Peak Demand and Energy Usage

• ERCOT is performing a weekly COVID-19 load impact analysis; results are varied, and easing of some state bans may change results going forward

• Daily peaks have seen no impact on some days and decreased between 2 and 5% on other days

• Weekly energy use has generally decreased between 2 and 5%

22

PUBLIC

ERCOT Communication Channels

23

ERCOT website – www.ercot.com• Today’s Outlook and grid conditions• Daily and seasonal weather• Market information, prices and more

Social media – join us!• Twitter: @ERCOT_ISO• Facebook: Electric Reliability Council of Texas• LinkedIn: ERCOT

ERCOT mobile app • Real-time updates• Wholesale pricing• Information sharing

©COPYRIGHT NYISO 2020. ALL RIGHTS RESERVED

Emilie NelsonEXECUTIVE VICE PRESIDENT

May 12, 2020

Market Insights:Spring Report

©COPYRIGHT NYISO 2020. ALL RIGHTS RESERVED 25

The Mission of the New York Independent System Operator, in collaboration with its stakeholders, is to serve the public interest and provide benefits to consumers by:

• Maintaining and enhancing regional reliability

• Operating open, fair and competitive wholesale electricity markets

• Planning the power system for the future

• Providing factual information to policymakers, stakeholders and investors in the bulk power system

www.nyiso.com

2


NYISO Markets

26

§ The NYISO supports reliability through three complementary markets for energy, ancillary services, and capacity. • Each addresses distinct reliability

needs through competitive market pricing that benefit New York consumers while reducing costs.

• Together, energy, ancillary services, and capacity market revenues provide economic signals for new investment, retirement decisions, and participation by demand response providers.


Tale of Two Grids

28

2018 Regional Energy Production Profiles

UPSTATE

DOWNSTATE


Peak Demand vs. Average LoadPeak vs. Average Load in New York State: 2000-2018

2000-2018• The Bulk Power System

must be capable of reliably meeting peak demand, which occurs in the summer months in NYS

• On average, demand on the Bulk Power System is significantly below peak levels


Electric Vehicle Energy & Peak Impacts Forecast

2019-2039• EV adoption rates

are expected to increase annual energy use on the grid by 4.2 million MWh by 2030

• Summer 2030 demand impact 410 MW

• Winter 2030 demand impact 650 MW


A Grid in Transition - Reliability Considerations

31

§ New York’s decarbonizationpolicies are creating new challenges to meet NYISO’s mission to support a reliable and economically efficient electric system.

Reliability Challenges§ Balance Supply & Demand§ Maintain Ten-Minute Operating

Reserves§ Maintain Total Thirty-Minute

Operating Reserves§ Manage Daily Energy Needs§ Secure Transmission Operations

with Congestion Management§ Coordinate System Restoration

and Black Start§ Manage Voltage Support§ Maintain Frequency Response§ Maintain Resource Adequacy§ Coordinate Supply Outages


New York State’s clean energy goals: A Grid in Transition

32


A Grid in Transition – Path Forward

33

§ The NYISO’s wholesale markets can serve as an effective platform for achieving New York State environmental objectives.• Through active engagement with stakeholders and policymakers,

the NYISO is developing design improvements to meet the future challenges expected to arise with high levels of intermittent renewable and distributed energy resources.

§ The plan includes a set of market design enhancements that work together coherently and efficiently to satisfy New York’s changing grid reliability needs.• Nine areas of market design opportunities across three main

points of focus (discussed on the next slide) require immediate attention and are recommended for implementation in the next five years, through 2024.

NYISO’s Wholesale

Market Platform

Maintaining Grid

Reliability

Enabling Climate Policy

Lowering Costs


Energy Markets for a Grid In Transition§ Integrating Carbon Pricing into the markets as the most efficient, immediate and effective

means to pursue the state’s public policy goals for clean energy production detailed in the CLCPA.

§ Energy and ancillary services design enhancements to promote system flexibility.

§ Improving the resource adequacy model to better align compensation with performance given the changing power grid.

§ Comprehensive Mitigation Review: the NYISO is actively engaging stakeholders to conduct a comprehensive review of NYISO market rules aimed at maintaining competitive market structures that will continue to support reliability, efficiency, and the transitioning grid.


NYISO Pandemic Preparedness

35

§ The NYISO has long had Pandemic Response and Business Continuity plans in place.

§ NYISO is engaged with New York asset owners on a daily basis§ Due to the unprecedented spread of the coronavirus, particularly in and

around New York State, NYISO senior leadership determined additional steps were needed to ensure the health and safety of NYISO employees and grid reliability. • A 37-person team of volunteers agreed to enter the sequestration program on March 23rd with

teams located at our two facilities.• Effective May 4th the sequestration program continued with a 19-person team of volunteers

located at a single site.• The broader NYISO employee base has been working productively from home.


NYISO Pandemic Observations

36

§ Demand remains lower than typically-expected levels across the New York Control Area (NYCA).

§ Notable trends during the fourth week of April include:• New York City hourly demand for the period of April 20 – April 24, ranged from 5% to about 20%

below typical levels.• For weekdays, reductions in electric consumption in New York City averaged 20% below expected

levels during the 8 a.m. hour.

§ NYCA-wide peaks averaged 7-8% below expected for the week.• NYCA-wide reductions in electric consumption compared to typical demand levels ranged from

about 3% during the 12 a.m. hour to just under 14% during the 7 a.m. hour.

§ The NYISO’s forecast team has observed that the reduction in electric demand from commercial customers is a leading driver of overall reduced electricity consumption. • We are also observing an increase in residential energy use, especially during the midday.

Philip BruichSPP, Director of Market Administration

SPP RTO and West RC Footprints39

34.9%

27.5%

26.0%

6.0%5.2%

0.2% 0.1%

Coal (34.8%)

Wind (27.4%)

Natural Gas (25.9%)

Nuclear (6.0%)

Hydro (5.6%)

Solar (0.2%)

Other (0.1%)

2019 Energy Productionby Fuel Type: 271,330 GWh total

41.1%

26.0%

24.9%

3.7%

2.… 1.7% 0.2% 0.1%

Natural Gas (40.9%)Coal (25.9%)Wind (24.8%)Hydro (3.7%)Nuclear (2.3%)Fuel Oil (1.7%)Solar (0.2%)Other (0.1%)

GENERATING Capacity* by Fuel Type: 90,446 MW total

* nameplate capacity as of 1/10/20

• Maximum wind output: 18,259 MW (1/8/20)

• Minimum wind output (last 12 mos.):

374 MW (8/4/19 @ 10:31)

• Maximum wind penetration: 73.2% (4/27/20 01:24)

• Maximum renewable penetration: 78.2% (4/27/20 01:24)

• Average wind penetration (2019): 28.7%

• Max wind swing in one day: >16 GW on Dec. 11-12, 2019

(17.9 GW to 1.7 GW in 21 hours)

• Max 1-hour ramp: 3,700 MW

WIND PENETRATION IN THE SPP SYSTEM

On Dec. 11, 2019, 17.9 GW of wind power served 51% of our load. Less than 21 hours later, wind shrank to 6% of our generation mix, and other sources like coal and gas ramped up to serve load. This illustrates the value of a diverse fuel mix able to accommodate a wide variety of operational circumstances!

Dec. 11@ 20:10

Approx.21 hours laterWind

51%

Coal23%

Gas16%

Nuclear6%

Hydro4% Wind

6%

Coal46%

Gas35%

Nuclear7%

Hydro6%

Western Energy Services• SPP will administer the Western Energy Imbalance

Service(WEIS) market beginning February 1, 2021.

• Eight utilities have signed contracts as market participants.

• RTO membership is not required for participation in the market.

• SPP administered an EIS market from 2007 to 2014 prior to implementing the Integrated Marketplace.

COVID-19 Impacts

• ~4,000 Webex Meetings• 15% using External Webex

tools• 85% using Internal Webex tools

• Nearly 32,000 attendees!• Over 170 days!

46

Scheduled Generation outages (Jan-May)

Scheduled Generation outages (Jun-Dec)

Cancelled generation outages (Jan-Jun)

Historical load comparison to First full week of covid-19 shutdowns in spp footprint

Questions

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