UNSW Energy Seminar Series, 27 March 2003 Electricity Industry Restructuring - Beyond the Parer Report www.energymarketreview.org Hugh Outhred School of Electrical Engineering & Telecommunications University of New South Wales Tel: +61 2 9385 4035; Email: [email protected]www.ergo.ee.unsw.edu.au
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UNSW Energy Seminar Series, 27 March 2003
Electricity Industry Restructuring -Beyond the Parer Report
www.energymarketreview.org
Hugh OuthredSchool of Electrical Engineering & Telecommunications
University of New South WalesTel: +61 2 9385 4035; Email: [email protected]
States participating in theNational Electricity Market
• Queensland• New South Wales & ACT• Victoria• South Australia• Tasmania (on connection
to the mainland)
NEM regions are indicated, and theirboundaries need not be on state borders
(e.g. two regions in NSW)
Queensland was originally expected to have 3 NEM regions
7
Trading in electricity:-an abstraction from reality
Policies & prioritiesPhysical electricity industry
Ancillaryservices
Engineering models
Main commercial markets
Economic models
Externalities
8electrical continuum subject to flow constraints
Transmission(220-500 kV)
Sub-transmission(33-132 kV)
Distribution(11-33kV)
Reticulation(240/415 V)
Inter-connectorto another region
Transmissionsubstation
SmallConsumers
LargeGenerators
100-700 MVA
DistributedGenerators≤ ~30 MVA
LargeConsumers
RetailMarket(s)Zone
substation
Wholesalemarket
Overlay of wholesale & retail marketson an electricity industry
9
NEM processes for managing supply-demand balance
Power system reliability & security standards
Market information:•SOO 10 yr forecast•NSP annual plans•MTPASA•STPASA•Predispatch•Market notices
NEMMCO:•Participant bid/offers•Network data•Demand forecast•Reserve threshold•Security constraints•Reliability safety net
Dispatch (spot)& FCASMarkets
DerivativeMarkets
10
Timeline for electricity trading in NEM
Derivative markets &spot market projections
Frequency-relatedancillary service
markets for period tFCAS
forward markets& PASA, SOO
FCAS marketsfor period t+1
Spot marketfor period t
Spot marketfor period t+1
time
spotperiod t
spotperiod t+1
increasing uncertainty
Physical issues
Commercial issues
11
Electricity industry structure in SE Australia
Gen 1
Gen 2
Gen X
GenerationSector:-
largegenerators
Gen 3
TransmissionSector
NSWVictoria
South Aust.Queensland& possiblyTasmania
TransmissionSector
NSWVictoria
South Aust.Queensland& possiblyTasmania
Electricity
Financial instrument& REC (emission) trading
Distributor 1
Distributor 2
Distributor Y
Distributionsector
Electricity
Multi-regionNational
ElectricityMarket
(spot & AS)
Intentionsoffers &
paymentsRetailer Z
Retailer 2
Retailer 1
Retailsector
Intentionsbids &
payments
Tx networkpricing
Tx networkpricing
Networkaccess End-use
Equipment&
DistributedresourcesElectricity
End-usesector
Contestablecustomers
Franchisecustomers
RetailMarkets
Embeddedgenerators
12
Summary of EI restructuring issues
• Non-storable flows of electrical energy:– Stochastic, inter-dependent services:
• Generators, network elements, loads
• Individual and group decision making by all industry participants:– Technical, social & environmental links
• Important abstractions in restructuring:– Technical, commercial & policy processes– Market-based & centralised decision making
13
Electricity industry behaviour that is difficult to commercialise
• Continuous, shared energy flow from power stations to end-use equipment via network:– Instantaneously variable with time & location
• Availability & quality can degrade rapidly
• Shared accountability for availability & quality– High-value end-uses have high commercial risks– Managed collectively by ancillary servicesancillary services (AS):