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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Locational Based Marginal PricingGina CraanManager, Market Training, NYISO
Market Overview CourseMarch 8, 2018Rensselaer, NY 12144
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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Locational Based Marginal Pricing Attendees will be able to
• Explain the Basics Behind LBMP• Complete Simple LBMP Examples• Identify the Impacts of Congestion
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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
LBMP – The Basics
LBMP is
Cost to provide the Next MW of Load at a Specific Location in the grid
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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
LBMP – The Basics LBMP is established for the Day Ahead Market and the Real Time
Market• Day Ahead Market
• Security Constrained Unit Commitment (SCUC)• Hourly Prices
• Real Time Market• Real Time Dispatch (RTD)• 5 Minute Interval Prices
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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
CO-OPTIMIZATION FOR LOWEST TOTAL
PRODUCTION COST$
LBMP: Co-Optimized Based on Bids and Offers
NYISO ForecastLoad BidsGenerator OffersTransactionsAncillary ServicesVirtualsDemand ResponseConstraints
INPUT-BIDS AND OFFERS OUTPUT-
SCHEDULES
PRICES
NYISOSCUC/RTD
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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
LBMP – The Basics LBMP is made up of three components:
• Marginal Energy Price • Basic Component of LBMP, calculated at Marcy
• Marginal Loss Price• Captures Losses along path to Load
– Transmission Losses
• Marginal Congestion Price• Costlier units Dispatched to avoid exceeding Transmission Limits
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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
LBMP-Three Components, An Analogy
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Delivery
Associated Cost $ AmountCapital –Zone F
$ AmountNYC – Zone J
Similar to
Base price to make Billboard(cost to manufacture sign)
$40 $40 Energy Price Component(cost to produce power)
Shipping and Handling(cost to deliver the billboard)
$1 $1 Loss Price Component(cost to get energy to
destination)
Potential for added cost(cost to purchase/rent a location)
$40 $100 Congestion Price Component(cost to ensure load need is
met)
Total Cost for Product $81 $141 LBMP
FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Generators – Gen Bus LBMP LBMP for Generators
• Based on Generator Bus• LBMP calculated at Bus where Generator injects power
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Gen Bus
NYSTransmission
System
FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Load Serving Entity – Zonal LBMP LBMP for Load
• Based on Zone where Load is Located• One Zonal LBMP for entire Zone• Load Weighted Average IESO
Zone O
HQZone M
ISO-NEZone N
PJMZone P
NYCA Load ZonesA- West E- Mohawk Valley I- DunwoodieB- Genesee F- Capital J- NYCC- Central G- Hudson Valley K- Long IslandD- North H- Millwood
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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Example 1: Energy OnlyNo Losses and No Congestion
Total Load = 150 MW10
FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Gen ‘Power Up’100 MW, Bid @$20/MW
East ZoneLoad B
120 MW
West ZoneLoad A30 MW
Gen ‘Full Steam’ 150 MW, Bid @$35/MW
Gen ‘Energy’ 100 MW, Bid @$30MW
Gen ‘Lights On’ 200 MW, Bid @$40/MW
Total Load150 MW
Limit150 MW
Example 1: Energy Only
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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Gen ‘Power Up’100 MW, Bid @$20/MW
East ZoneLoad B
120 MW
West ZoneLoad A30 MW
Gen ‘Full Steam’ 150 MW, Bid @$35/MW
Gen ‘Energy’ 100 MW, Bid @$30MW
Gen ‘Lights On’ 200 MW, Bid @$40/MW
Total Load150 MW
Limit150 MW
Example 1: Energy Only
100 MW
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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Gen ‘Power Up’100 MW, Bid @$20/MW
East ZoneLoad B
120 MW
West ZoneLoad A30 MW
Gen ‘Full Steam’ 150 MW, Bid @$35/MW
Gen ‘Energy’ 100 MW, Bid @$30MW
Gen ‘Lights On’ 200 MW, Bid @$40/MW
Total Load150 MW
Limit150 MW
Example 1: Energy Only
100 MW
50 MW
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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Gen ‘Power Up’100 MW, Bid @$20/MW
East ZoneLoad B
120 MW
West ZoneLoad A30 MW
Gen ‘Full Steam’ 150 MW, Bid @$35/MW
Gen ‘Energy’ 100 MW, Bid @$30MW
Gen ‘Lights On’ 200 MW, Bid @$40/MW
Total Load150 MW
Limit150 MW
Example 1: Energy Only
100 MW
50 MW
30 MW
70 MW
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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Gen ‘Power Up’100 MW, Bid @$20/MW
East ZoneLoad B
120 MW
West ZoneLoad A30 MW
Gen ‘Full Steam’ 150 MW, Bid @$35/MW
Gen ‘Energy’ 100 MW, Bid @$30MW
Gen ‘Lights On’ 200 MW, Bid @$40/MW
Total Load150 MW
Limit150 MW
Example 1: Energy Only - Results
West Zone LBMP $30.00 East Zone LBMP $30.0015
FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Gen ‘Power Up’ ,100 MW Bid $20, Paid $20
East ZoneWest Zone
Gen ‘Full Steam’ ,150 MWBid $35, Paid $0
Gen ‘Energy’ ,100 MW Bid $30, Paid $30
Gen ‘Lights On’, 200 MW Bid $40, Paid $0
Example 1: Energy Only - Results
Generators receive $30/MW (LBMP)16
FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Example 1: Energy Only - Results
Loads Charged $30/MW (LBMP)
East ZoneLoad B
120 MW
West ZoneLoad A30 MW
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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Congestion Congestion occurs when the Power flow reaches the Transmission Limit
At Limit Congestion
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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Congestion To maintain efficient and reliable Transmission system
• Transmission limits cannot be exceeded• When Transmission limits reached, generators from different
buses are dispatched to meet load When there is congestion, LBMPs can differ between buses
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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Example 2: Energy and Congestion No Losses
Total Load400 MW
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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Gen ‘Power Up’310 MW, Bid @$30/MW
East ZoneLoad B
360 MW
West ZoneLoad A40 MW
Gen ‘Energy’ 350 MW, Bid @$40/MW
Gen ‘Lights On’ 100 MW, Bid @$25/MW
Gen ‘Full Steam’ 350 MW, Bid @$35/MW
Total Load400 MW
Limit150 MW
Example 2: Energy and Congestion
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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Gen ‘Power Up’310 MW, Bid @$30/MW
East ZoneLoad B
360 MW
West ZoneLoad A40 MW
Gen ‘Energy’ 350 MW, Bid @$40/MW
Gen ‘Lights On’ 100 MW, Bid @$25/MW
Gen ‘Full Steam’ 350 MW, Bid @$35/MW
Total Load400 MW
Limit150 MW
Example 2: Energy and Congestion
100 MW
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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Gen ‘Power Up’310 MW, Bid @$30/MW
East ZoneLoad B
360 MW
West ZoneLoad A40 MW
Gen ‘Energy’ 350 MW, Bid @$40/MW
Gen ‘Lights On’ 100 MW, Bid @$25/MW
Gen ‘Full Steam’ 350 MW, Bid @$35/MW
Total Load400 MW
Limit150 MW
Example 2: Energy and Congestion
100 MW300 MW
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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Gen ‘Power Up’310 MW, Bid @$30/MW
East ZoneLoad B
360 MW
West ZoneLoad A40 MW
Gen ‘Energy’ 350 MW, Bid @$40/MW
Gen ‘Lights On’ 100 MW, Bid @$25/MW
Gen ‘Full Steam’ 350 MW, Bid @$35/MW
Total Load400 MW
Limit150 MW
Example 2: Energy and Congestion
100 MW300 MW
40 MW260 MW
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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Gen ‘Power Up’310 MW, Bid @$30/MW
East ZoneLoad B
360 MW
West ZoneLoad A40 MW
Gen ‘Energy’ 350 MW, Bid @$40/MW
Gen ‘Lights On’ 100 MW, Bid @$25/MW
Gen ‘Full Steam’ 350 MW, Bid @$35/MW
Total Load400 MW
Limit150 MW
Example 2: Energy and Congestion
100 MW190 MW
40 MW150 MW
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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Gen ‘Power Up’310 MW, Bid @$30/MW
East ZoneLoad B
360 MW
West ZoneLoad A40 MW
Gen ‘Energy’ 350 MW, Bid @$40/MW
Gen ‘Lights On’ 100 MW, Bid @$25/MW
Gen ‘Full Steam’ 350 MW, Bid @$35/MW
Total Load400 MW
Limit150 MW
Example 2: Energy and Congestion
100 MW190 MW
40 MW150 MW
110 MW
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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Gen ‘Power Up’310 MW, Bid @$30/MW
East ZoneLoad B
360 MW
West ZoneLoad A40 MW
Gen ‘Energy’ 350 MW, Bid @$40/MW
Gen ‘Lights On’ 100 MW, Bid @$25/MW
Gen ‘Full Steam’ 350 MW, Bid @$35/MW
Total Load400 MW
Limit150 MW
Example 2: Energy and Congestion- Results
West Zone LBMP =$30 East Zone LBMP =$3527
FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Gen ‘Power Up’ ,310 MW Bid $30, Paid $30
East ZoneWest Zone
Gen ‘Energy’ ,350 MWBid $40, Paid $0
Gen ‘Lights On’ ,100 MW Bid $25, Paid $35
Gen ‘Full Steam’, 350 MW Bid $35, Paid $35
Example 2: Energy and Congestion - Results
Generators West of interface receive $30/MW (LBMP)Generators East of interface receive $35/MW (LBMP)
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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Example 2: Energy and Congestion - Results
Loads in West ZoneCharged $30/MW (LBMP)
East ZoneLoad B
360 MW
West ZoneLoad A40 MW
Loads in East ZoneCharged $35/MW (LBMP)
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© COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED. FOR TRAINING PURPOSES ONLY
Let’s ReviewLBMP is the cost to provide the:
a) Last MW of Load at a specific location in gridb) Next MW of Load at a specific location in grid
LBMP is established through:a) Economic Dispatch Processb) Random Generation Selection Process
LBMP is comprised of:a) One Single Price Componentb) Three Separate Price Components
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© COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED. FOR TRAINING PURPOSES ONLY
Let’s ReviewLBMP for Load is
a) Established at each LSE’s locationb) Established at a Zonal level
LBMP for Generator isa) Established at a Zonal levelb) Established at the Generator Bus
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FOR TRAINING PURPOSES ONLY©COPYRIGHT NYISO 2018. ALL RIGHTS RESERVED
Tariffs - OATT & MST
Day Ahead Scheduling Manual
Transmission and Dispatching Operations Manual
Market Participant User’s Guide
Technical Bulletins
Additional Resources
** Images provided by Google Images @ https://www.google.com , February 7, 2017
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