Ancillary Services Fundamentals and Market Dynamics

Ancillary Services Fundamentals and Market Dynamics

August 25-26, 2021 | Online :: Central Time

“This is my third event, apart from content I appreciate the diversity of attendee’s. Lawyers, economists, ISO, FERC, generators, marketers, traders, back of the house support, grad students – all provide a different perspective of a single topic.” Sr. Data Architect, Aquilon

The emergence of renewable and variable energy resources has drawn attention to the supplemental services — beyond the basics of energy, generating capacity, and power delivery — that bulk-power systems and balancing areas require to ensure grid stability.  Some of these ancillary services (such as regulation and reactive power) are required during normal operations to maintain the necessary balance between generation and load in real-time and maintain voltages within the required ranges.  Other ancillary services (such as contingency reserves) provide insurance to prevent minor problems from becoming full-scale catastrophes or to restore the bulk-power system to normal operations after a major outage occurs.

This course will explain the functions performed by each ancillary service with a focus on the real-power services.  It will also provide an in-depth treatment of several features of ancillary services, regulation and reserve market design: 

  1. Co-optimization in the scheduling and dispatch of energy and ancillary services
  2. The theory and practice of reserve and regulation shortage pricing
  3. The pricing and scheduling of demand side ancillary services
  4. Market design approaches to scheduling, pricing and bidding these services
  5. Comparison of ancillary services, regulation and reserve products across the various North American independent system operators (ISOs)
  6. Value and cost components that inform market participant ancillary services, regulation and reserve products bidding opportunities

Learning Outcomes

  • Identify what ancillary services are and why the power system needs them
  • Discuss what is required to provide ancillary services, regulation and reserve products
  • Examine what the cost drivers are for ancillary services, regulation and reserve products
  • Assess the reasons that co-optimization of energy and ancillary services is becoming a standard feature of wholesale power markets and how they function
  • Examine the relationship between ramp constraints, regulation shortage prices, price variability, and the returns to being on dispatch
  • Identify the options of faster ramp and more accurate provision of regulation
  • Identify how the increasing penetration of renewable energy, storage and distributed energy resources influence the need and provision of ancillary services, regulation and reserve products
  • Interpret FERC Orders and other actions that affect ancillary services, regulation and reserve markets
  • Address participation challenges in the ancillary services, regulation markets and reserve markets
  • Evaluate ancillary services, regulation and reserve products’ cost, value and bidding approaches
  • Examine the need for inertia, virtual trading and other new ancillary services, regulation and reserve products, services and pricing models
  • Analyze and understand how the development of demand ancillary services regulation and reserve products is related to the level of price caps and the introduction of meaningful shortage pricing

 

Agenda

Wednesday, August 25, 2021 : Central Time

8:45 – 9:00 a.m.
Log In and Welcome

12:15 – 1:00 p.m.
Lunch Break

9:00 a.m. – 4:30 p.m.
Course Timing

9:00 – 9:15 a.m. :: Overview & Introductions

9:15 – 10:00 a.m. :: Context for Emergence & Importance of Ancillary Services

  • Shift from centralized to distributed power system
  • Accelerating penetration of intermittent and variable renewable energy resources
  • Prosumerism and user preference for green energy
    • Customer
    • Commercial
    • Government
  • Policy drivers
    • Renewable portfolio standards
    • De-carbonization
  • Economic drivers
    • LCOE reductions in renewable energy
    • Shift in marginal cost of energy in market regimes
    • Retirement of baseload power

Matthew Lind, Director – Resource Planning & Market Assessments, 1898 & Co (Part of Burns & McDonnell)

10:00 – 10:20 a.m. :: Introductions

10:20 – 10:35 a.m. :: Morning Break

10:35 a.m. – 12:15 p.m. :: Program

  • Background / Who is in control
  • What Are Ancillary Services (AS)?
  • Reliability Performance Requirements
  • Normal Conditions
    • Frequency Regulation
    • Load Following
    • Energy Imbalance
  • Contingency Conditions
    • Frequency Response
    • Supplemental Reserves
  • Other Ancillary Services
    • Voltage Control and Reactive Supply
    • Black Start
    • Scheduling, System Control and Dispatch
  • Impact of FERC Orders

Dr. Erik Ela, Principal Technical Leader, Electric Power Research Institute (EPRI)

12:15 – 1:00 p.m. :: Lunch Break

1:00 – 2:45 p.m. :: Program

  • Sources of Ancillary Services
    • Generation
    • Energy Storage
    • Demand Response
    • Synthetic
  • Comparison of Ancillary Services Across All ISOs
    • California ISO
    • ERCOT
    • ISO New England
    • Midcontinent ISO
    • New York ISO
    • PJM Interconnection
    • Southwest Power Pool

Dr. Robin Broder Hytowitz, Senior Project Engineer – Grid Operations & Planning, Electric Power Research Institute (EPRI)

2:45 – 3:00 p.m. :: Afternoon Break

3:00 – 4:45 p.m. :: Program

  • Trends in Ancillary Services
    • Impact of FERC orders
    • Impact of State Initiatives (New York, California)
    • Texas and ERCOT-specific AS conditions, initiative and outcome
    • Impact of Variable Energy Resources (wind and solar)
    • Aggregated supply from Distributed Energy Resources
    • Shifts in resource ownership and offerings
  • Multiple services possibilities and practicalities

Dr. Nikita G. Singhal, Senior Engineer Scientist – Grid Operations & Planning, Electric Power Research Institute (EPRI)

4:45 pm :: Program Adjourns for Day


Thursday, August 26, 2021 : Central Time

8:45 – 9:00 a.m.
Log In

9:00 a.m. – 12:30 p.m.
Course Timing

9:00 a.m. 12:30 p.m. :: Overview of Ancillary Services, Regulation and Reserve Products in Wholesale Markets

  • Co-optimization of energy and ancillary services
    • Why is co-optimization needed for economic efficiency?
    • How does co-optimization work?
  • Reserve and regulation shortage pricing
    • Overview of alternative scarcity pricing mechanisms
    • The advantages of reserve shortage pricing
    • How does reserve shortage pricing work
      • Determining energy prices in markets with reserves shortage pricing and co-optimized energy and ancillary service markets
    • ERCOT’s operating reserve demand curve
    • Ramp constraints, price spikes and regulation shortage values
    • The role of scarcity pricing in markets with capacity requirements
  • Ramping products
    • Evolving need for ramping products
    • CAISO flexible ramping product
    • MISO ramp capability model
  • Storage and demand side ancillary services
    • Overview of current storage and demand side ancillary service ISO products
    • Economics of storage and demand side ancillary services for provision of ISO products
    • Expected evolution of energy storage products and likelihood of broader valuation of multiple uses
  • Comparison of ancillary services, regulation and reserve market values across all ISOs

Joseph Cavicchi, Vice President, The Analysis Group

12:30 p.m. :: Program Adjournment

Instructors

Dr. Robin Broder Hytowitz, Senior Project Engineer – Grid Operations & Planning, Electric Power Research Institute (EPRI)

Robin Broder Hytowitz is a senior project engineer in Grid Operations and Planning at EPRI, focusing on wholesale market design and operations, supply resilience, and renewable integration. Prior to EPRI, she completed a PhD at the Johns Hopkins University in Baltimore, MD, where her dissertation developed a new energy pricing method, analyzed integration of carbon pricing into wholesale markets and suggested improvements to European reserve products considering high wind penetration. During her studies she also worked part-time in the Office of Energy Policy and Innovation at FERC, primarily researching current and proposed pricing models for wholesale electricity. Robin received her master’s degree in electrical engineering from Arizona State University, a bachelor’s degree from Barnard College, Columbia University, and was a Fulbright Fellow studying wind power integration in Denmark.


Joe Cavicchi, Vice President, The Analysis Group

Joe Cavicchi is a Vice President with The Analysis Group and is based in Boston, Massachusetts. Hisexpertise is conducting economic analyses of US electricity markets. In particular, he advises clients in Federal Energy Regulatory Commission matters, state regulatory proceedings, and arbitration and court proceedings. He files testimony, affidavits and expert reports supported by economic analyses. Mr. Cavicchi’s work focuses extensively on analyzing the U.S. wholesale electricity markets and developing an in-depth understanding of the operations of the wholesale markets. His work involves conducting economic analyses of wholesale power markets and related regulatory policy to support a wide variety of testimony, presentations and papers. He analyzes power market designs and market power mitigation frameworks; assesses the competitive impact of mergers and acquisitions; evaluates power and fuel contract dispute analysis; assists with power procurement designs; and, oversees the application of complex analytical modeling to assess electricity system operations. He also runs workshops and seminars on power market design features. He has been actively involved in the electricity industry both before and after its restructuring for a total of more than 20 years. Prior to joining The Analysis Group, Mr. Cavicchi was Executive Vice President at Compass Lexecon. Before that he was a staff mechanical engineer and a project manager at the Massachusetts Institute of Technology, overseeing the development, permitting, engineering, construction, and start-up of a $40 million, 20 megawatt gas turbine-based cogeneration facility at the Cambridge campus. Mr. Cavicchi holds an S.M. in technology policy from MIT, an S.M. in environmental engineering from Tufts University and a B.S. in mechanical engineering from the University of Connecticut.


Dr. Erik Ela, Principal Technical Leader, Electric Power Research Institute (EPRI)

Erik Ela is the Principal Technical Leader at the Electric Power Research Institute (EPRI). In his role, he provides technical leadership in several areas including electricity market design, electricity market operations, renewable energy integration, emerging technology integration, bulk power system operations, frequency control and essential reliability services, and generation planning. At EPRI, Dr. Ela facilitates the R&D collaborative group of technical experts of North America’s Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs) to discuss research needs in technical areas facing the industry and leads innovative projects on how utilities and ISOs can operate the power system more efficiently and reliably. He has led several high profile research projects for government organizations and utilities across the world and spoke on these topics in over 100 venues/conferences across the world. Prior to joining EPRI in 2014, he worked for several years with the National Renewable Energy Laboratory (NREL) as a senior research engineer and before that for the New York Independent System Operator (NYISO). He has been involved in several working groups as a senior member of the IEEE Power and Energy Society, CIGRE, NERC, and elsewhere, including as an associate editor for the IEEE Transactions on Power Systems and currently secretary of the Power System Economics Subcommittee. Dr. Ela received his BS, MS, and PhD degrees in Electrical Engineering.


Matthew Lind, Director – Resource Planning & Market Assessments, 1898 & Co.

Matthew Lind is the director of resource planning and market assessments at 1898 & Co., part of Burns & McDonnell.  He has worked as a professional consultant in the utility and energy sector since 2004.  Mr. Lind specializes in system planning and market congestion studies driven by strategic, economic and regulatory considerations for generation or transmission development in markets across North America. He has a Bachelor of Science in industrial engineering from Iowa State University and a Master of Business Administration from the University of Missouri-Kansas City.


Dr. Nikita G. Singhal, Senior Engineer Scientist – Grid Operations & Planning, Electric Power Research Institute (EPRI)

Dr. Nikita G. Singhal is a Senior Engineer Scientist in Grid Operations and Planning at the Electric Power Research Institute (EPRI), focusing on emerging technology integration into operations and wholesale electricity market design and operations. At EPRI, Dr. Singhal leads an ISO/RTO energy storage market modeling technical working group, and provides technical support for bulk power system operation and planning simulation, including production cost modeling, dynamic operating reserve determination, and storage integration, and advanced software tool development for the power system industry. She received the B.E. degree in electrical and electronics engineering from the PES Institute of Technology (India) and the M.S. and Ph.D. degrees in electrical engineering from Arizona State University (ASU). Her research interests include power system economics and operations research applied to power systems.

Online Delivery

We will be using Microsoft Teams to facilitate your participation in the upcoming event. You do not need to have an existing Teams account in order to participate in the broadcast – the course will play in your browser and you will have the option of using a microphone to speak with the room and ask questions, or type any questions in via the chat window and our on-site representative will relay your question to the instructor.

  • You will receive a meeting invitation will include a link to join the meeting.
  • Separate meeting invitations will be sent for the morning and afternoon sessions of the course.
    • You will need to join the appropriate meeting at the appropriate time.
  • If you are using a microphone, please ensure that it is muted until such time as you need to ask a question.
  • The remote meeting connection will be open approximately 30 minutes before the start of the course. We encourage you to connect as early as possible in case you experience any unforeseen problems.

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EUCI has been accredited as an Authorized Provider by the International Association for Continuing Education and Training (IACET).  In obtaining this accreditation, EUCI has demonstrated that it  complies with the ANSI/IACET Standard which is recognized internationally as a standard of good practice. As a result of their Authorized Provider status, EUCI is authorized to offer IACET CEUs for its programs that qualify under the ANSI/IACET Standard.

EUCI is authorized by IACET to offer 1.0 CEUs for this event.

 

Requirements For Successful Completion Of Program

Participants must sign in/out each day and be in attendance for the entirety of the conference to be eligible for continuing education credit.

Instructional Methods

PowerPoint presentations and case studies will be used in program

Who Should Attend

Power industry personnel who need to have a better understanding of what Ancillary Services are, how they are competitively procured, how they are scheduled, and how and when they are called upon:

  • Portfolio managers and traders responsible for formulating bidding strategies for ancillary services
  • Power-plant and systems operations engineers who would like to understand the impact of ancillary services on their plant profitability
  • Genco and DR executives who need a good understanding of the potential impacts and opportunities of ancillary services markets on their operations
  • Personnel of Independent System Operators (ISOs), attorneys, and regulators who need to understand the function of ancillary services, co-optimization measures, and reliability implications in various markets
  • Power marketing professionals responsible for optimizing their fleet utilization and profitability
  • Demand side, demand response and aggregation services that must capitalize on access opportunities across multiple AS markets

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