The New Jersey Clean Energy Conference September 26 ...©2005 PJM©2003 PJM 1 The New Jersey Clean...
Transcript of The New Jersey Clean Energy Conference September 26 ...©2005 PJM©2003 PJM 1 The New Jersey Clean...
©2003 PJM©2005 PJM 1
The New Jersey Clean Energy ConferenceSeptember 26, 2005
PJM Overview
Kenneth W. LaughlinVP Markets Coordination
PJM
©2003 PJM©2005 PJM 2
PJM as Part of the Eastern Interconnection
KEY STATISTICSPJM member companies 350+millions of people served 51peak load in megawatts 131,330MWs of generating capacity 165,738miles of transmission lines 56,070GWh of annual energy 700,000generation sources 1,082square miles of territory 164,260area served 13 states + DC
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Real Time
Real Information
Real Requirements
Owners, Users (i.e. the public)
Government
Physics
Real Relationships
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The Economics Of Power In Balance
Meet the Demand
By Supply side
Meet the Demand at Any Price
Supply and Demand Respond to Price
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Providing Data to the Market
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Interface Prices
• On average, PJM and MISO interface prices are tracking very closely.
• Correlation of interface prices has been increasing month-to-month.
• Day-ahead prices have been more highly correlated than Real-time.
• Off-peak prices have been more highly correlated than on-peak.
PJM/MISO Real -T ime Inter face Pr ices Average for 4 /01 - 8 /28, 2005
-20
-10
0
1 0
2 0
3 0
4 0
5 0
6 0
7 0
8 0
0 1 2 3 4 5 6 7 8 9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
H o u r E n d i n g
LM
P (
$)
PJM's In ter face for MISO-RT MISO's In ter face for PJM-RT Hr. Di f f . Average-RT
P J M / M I S O D a y - A h e a d I n t e r f a c e P r i c e s A v e r a g e f o r 4 / 0 1 - 8 / 2 8 , 2 0 0 5
- 2 0
- 1 0
0
1 0
2 0
3 0
4 0
5 0
6 0
7 0
8 0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
H o u r E n d i n g
LM
P ($
)
P J M ' s I n t e r f a c e f o r M I S O - D A M I S O ' s I n t e r f a c e f o r P J M - D A H r . D i f f . A v e r a g e
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Retail Price Change (1995-2004) RTO and Non-RTO
Eastern Interconnection, US
7.1%
14.1%
8.9%
10.5%
7.7%
10.4%
3.0%
9.4%10.4%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
Residential Commercial IndustrialRTO Average Non-RTO Average Average
*DOE Energy Information AdministrationElectric Power Monthly (April 1996, March 2005)
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PJM’s Operational Markets
• Day-Ahead Energy Market
• Real-Time Energy Market
• Capacity
• Financial Transmission Rights
• Ancillary Services Markets– Regulation– Spinning Reserve Market– Black Start Services– Reactive Services
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NYMEX Natural Gas Futures Near-Month Contract Settlement Price, West Texas Intermediate Crude Oil Spot Price, and
Henry Hub Natural Gas Spot Price
6/28/2005 7/27/2005 8/29/2005$0
$2
$4
$6
$8
$10
$12
$14
$16
5/27
/200
5
6/3/
2005
6/10
/200
5
6/17
/200
5
6/24
/200
5
7/1/
2005
7/8/
2005
7/15
/200
5
7/22
/200
5
7/29
/200
5
8/5/
2005
8/12
/200
5
8/19
/200
5
8/26
/200
5
9/2/
2005
9/9/
2005
9/16
/200
5
Dol
lars
per
Mill
ion
Btu
NYMEX Natural Gas Settlement PriceWTI Spot PriceHenry Hub Spot Price
Note:The West Texas Intermediate crude oil price, in dollars per barrel, is converted to $/MMBtuusing a conversion factor of 5.80 MMBtu per barrel. The dates marked by vertical lines are theNYMEX near-month contract settlement dates. Source: NGI's Daily Gas Price Index (http://Intelligencepress.com)
Nymex Closing Dates
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NYMEX Forward Contract Prices (September 22, 2005)
$-
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
Sep-0
5
Nov-05
Jan-0
6
Mar-06
May-06
Jul-0
6
Sep-0
6
Nov-06
Jan-0
7Mar-
07
May-07
Jul-0
7
Sep-0
7
Nov-07
Jan-0
8
Mar-08
May-08
Jul-0
8
Sep-0
8
Nov-08
Forward Month
PJM NYISO-A NYISO G NYISO-J
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NYMEX PJM Western Hub Contract Open Interest Value
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
4/11/2
003
4/25/2
003
5/9/20
03
5/23/2
003
6/6/20
03
6/20/2
003
7/4/20
03
7/18/2
003
8/1/20
03
8/15/2
003
8/29/2
003
9/12/2
003
9/26/2
003
10/10
/2003
10/24
/2003
11/7/2
003
11/21
/2003
12/5/
2003
12/19
/2003
1/2/20
04
1/16/2
004
1/30/2
004
2/13/2
004
2/27/2
004
3/12/2
004
3/26/2
004
4/9/20
04
4/23/2
004
5/7/20
04
5/21/2
004
6/4/20
04
6/18/2
004
Mill
ion
$
Using Average value of $35/MWH
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CoalGas
NuclearOil
HydroOther
Capacity
Energy0%
10%
20%
30%
40%
50%
60%
PJM Fuel Sources (2004)
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PJM Installed Reserve Requirement
22.0%
15.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
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Figure 4-13 - Trends in PJM equivalent demand forced outage rate (EFORd):
Calendar years 1994 to 2004
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PJM Generation Additions
0
1,000
2,000
3,000
4,000
5,000
6,000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
MW
0
5,000
10,000
15,000
20,000
25,000
Cu
mu
lativ
e M
W
GASWindOilWaste CoalTotal
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Liquidity at U.S. Hubs2004
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
PJM-W
Hub**
Mid Colu
mbia*
Palo
Verde
*
Cinergy
*CO
B*
Four
Corners
*
Mead/M
arketp
lace*
GW
H
* Dow Jones Electricity Index** PJM Settlements Data
January 2005
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CoalGas
NuclearOil
HydroOther
Capacity
Energy-
50,000
100,000
150,000
200,000
250,000
Cap
acit
y (M
W),
En
erg
y (G
WH
)
PJM Fuel Sources (2004)
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2004 PJM Energy Market
Self-Supplied4%
Net Imports5%
Spot Market38%
Bilateral Transactions
53%
Capacity by Fuel Type
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NYMEX Forward Contract Prices (September 17, 2005)
$-
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
$160.00
$180.00
$200.00
Sep-0
5
Nov-05
Jan-0
6
Mar-06
May-06
Jul-0
6
Sep-0
6
Nov-06
Jan-0
7
Mar-07
May-07
Jul-0
7
Sep-0
7
Nov-07
Jan-0
8
Mar-08
May-08
Jul-0
8
Sep-0
8
Nov-08
Forward Month
PJM NYISO A NYISO G NYISO J
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Generation By Fuel Source 2003(312,000 GWH)
Coal53%
Gas9%
Hydro2%
Nuclear33%
Oil2%
Solid Waste1%
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PJM generation by fuel source (GWh): Calendar year 2004
Nuclear, 165,128 ,
36.9%
Gas, 31,411 , 7.0% Oil, 4,738 ,
1.1%
Wind, 379 , 0.1%
Hydro, 10,303 , 2.3%
Solid Waste, 2,781 , 0.6%
Coal, 233,217 , 52.1%
©2003 PJM©2005 PJM 27
Joint and Common Market Initiatives
Cross Border FTRs in the allocations
$4,000,000
Cross border FTRs in auctions $8,000,000
2Price Rationalization and
Convergence at the Border
PJM implementation of marginal losses
(Note: All PJM costs) $600,000 Alternative Border Pricing Point
Calculation $200,000
3 Reduce Hurdle Rate
Alignment of PJM Operating Reserves and MISO Revenue
Sufficiency Guarantee(Note: All MISO cost)
$600,000
Depancaking of PTP ancillary services (Control Area Services, T.O. Control
Center Services, Reactive, Black Start) $400,000
Existing MISO & PJM Websites Linking of sites $500,000
Standard Data Exchange (Web Services) LMPs, Contingencies, Loads, Dispatch
Signals, Outages, Emergency Event/Notifications
$3,000,000
Implementation of single MISO & PJM Website
(Websites for individual RTOs go away)
$750,000
Common Search Capabilities Data Available at Both Sites (LMPs, Tie Flows, Loads)
$200,000
New Joint Websiteto Host Joint meeting and Events Calendar, Joint Documents and
Reports
$600,000
5 Increased Market Opportunities Moving JOUs between markets $100,000 Shared Regulation Market $8,000,000
Common Long Term Transmission Queue $200,000
Common Time Zones (Note: All PJM cost) $5,000,000
Single Resource Adequacy Solution $8,000,000
MISO Ramp Viewer(under way)
Central location to view both ramp viewers $100,000 Common Ramp Portal $750,000
Alignment of OASIS Business Practices
$500,000 Reserve Sharing $8,000,000
Coordinated OASIS $1,200,000
Single OASIS $8,000,000
7 Single MarketYear 1 - Rule Alignment & Market
Portal Design $15,000,000Year 2 - Initial Market Portal
Implementation $40,000,000Year 3-5 - Implementation of
Single Market $50,000,000
1 Emergency Energy Agreement
Alignment of Agreements and Practices $100,000
Pla
n
1Joint Expansion Planning
and Common Deliverability Studies
Alignment of Agreements and Practices $120,000
2006 $4,320,000 2007 $600,000 2008 $750,000
2008
Broader Price Transparency and
Common Reporting
Rel
iabi
lity
FTR Market Convergence1
Standard Data Visualization and Reporting Portal
Create a single MISO & PJM Data and Report Portal
$8,500,000
Common Treatment of Dynamic Schedules/Pseudo-Ties $200,000
Black Start and Restoration2 Alignment of Agreements and Practices $500,000
Total
4
2006 2007C
omm
erci
al
Operational Consistancy6
Alignment of FTR Timelines and Products
(Note: All MISO cost)$600,000
©2003 PJM©2005 PJM 28
Supported by Thriving Wholesale
Markets
§ Regional Scope
§ Many Buyers and Sellers
§ Participant Choices:
§ Futures Contract
§ Financial Hedge
§ Self-Schedule Resources
§ Long Term Contracts
§ Day Ahead Market
§ Real-Time Market
§ Retail Adjustments
Consumer Goals
§ Reliable Supply of Power
§ Fair Price for Electricity
§ Customer Choice
Enabled by PJM
§ Reliability Assurance
§ Collaborative Stakeholder Process for Improvement
§ Independence and Neutrality
§ Infrastructure for Business
§11 eTools
Retail Market Wholesale Market Market Information
Public Benefits of PJM