Market Based Transmission Planning: Chilean

Market Based Transmission Planning:
Chilean Experience
Juan Carlos Araneda
System Development Manager
Workshop on Transmission Network Security Standards
Imperial College London, March 9th, 2009
1
Overview
SING
• Chilean Energy Market
• Transmission Regulation in Chile
Segments
Trunk Expansion
• Security and Quality of Service
• Investment Evaluation Cases
Chile
• Conclusions
2
Evolution of the Chilean Electricity Market
1982: The Electricity Law was enacted
– Economic efficiency in operation and planning
– Separation of generation and distribution activities
– Competition in generation
1985: Creation of CDEC (System Operator)
1986: Privatization of distribution companies started
1988: Privatization of generation companies started
1993: Creation of Transelec (main transmission company)
1996: Chilean electricity companies invested in South America
1998: Chilean electricity companies owned by international agents
2004: Short Law I was enacted
– Improved transmission business (pricing and investment)
2005: Short Law II was enacted
– Improved regulated pricing (generators-distributors) with long term contracts
3
Main Chilean Interconnected Systems
SING
NORTHERN INTERCONNECTED SYSTEM (SING)
Average load growth 1999-2008
Expected annual load growth
Inst. capacity / Max. Dem.
Regulated/ Non Reg. Customers
Hydro / Thermal
Length
Population
7.2 %
5.3 %
3,610/ 1,700 MW
10% / 90%
1% / 99%
600 km
6%
SIC
CENTRAL INTERCONNECTED SYSTEM (SIC)
Average load growth 1999-2008
Expected annual load growth
Inst. capacity / Max. Dem.
Regulated/ Non Reg. Customers
Hydro / Thermal
Length
Population
Figures: December 2008
5.1 %
5.3 %
9,538/ 6,150 MW
65% / 35%
60% / 40%
1,800 km
93%
4
Generation Market Share
SING
NORTHERN INTERCONNECTED SYSTEM (SING)
Endesa
27%
Suez
48%
AES
26%
SIC
CENTRAL INTERCONNECTED SYSTEM (SIC)
Other
14%
Endesa
48%
Colbun
22%
AES
16%
Figures: December 2008
5
Transmission System
SING
Transelec is the largest electricity transmission
company in Chile, concentrated on the highest
voltage levels: 500 kV, 220 kV and 154 kV
Transelec owns 959 kilometers of transmission
lines and 4 substations in the Northern
Interconnected System (SING)
SIC
Transelec owns 7,244 kilometers of transmission
lines and 44 substations in the Central
Interconnected System (SIC)
Transelec is a private company owned by
Brookfield Consortium, Canada.
There are other transmission companies: CTNC,
CGE-T, STS and Transemel.
6
Chilean Energy Market Situation: Historical
GDP, SIC and SING Energy Growth, 1996-2005
GWh
50,000
SIC Demand
SING Demand
GDP
3.2%
6.6%
45,000
40,000
35,000
30,000
25,000
7.5%
8.0%
6.1%
4.5%
-0.8%
8.5%
5.3%
3.4%
5.7%
2.2%
4.1%
billion Ch$
50,000
7.0%
45,000
3.3%
5.8%
7.6%
3.7%
35,000
30,000
25,000
20,000
20,000
15,000
15,000
10,000
5,000
15.4%
15.1%
SING
40,000
3.4%
22.7%
7.1%
5.5%
10.5%
7.2%
2.9%
10,000
5,000
0
0
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
SIC
SIC GENERATION INSTALLED CAPACITY
4859 MW
4%
0%
1996
2008
9538 MW
1%
6%
Hydro
3%
Hydro
Coal
Coal
Gas
19%
Gas
Diesel
Diesel
Other
Other
25%
57%
75%
9%
7
Chilean Energy Market Situation: Future
Installed capacity vs. Demand
20,000
18,000
Installed Capacity [MW]
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2008
Hydro
2009
2010
Other
2011
Coal
2012
2013
Gas
2014
Diesel
2015
2016
2017
Average Demand
2018
2019
2020
Maximum demand
Diesel GT
Cogeneration
Coal
LNG/NG
Hydro
Onshore Wind
8
Chilean Energy Market Model
G
Cost based economic dispatch (determined by the system operator CDEC)
Generator revenue: In-feed valued at Locational Marginal Prices (LMP)
Firm Capacity valued at Capacity Price
p1 f1
T
f2 p2
Transmission LMP = p2•f2 - p1•f1
Transmission Toll = AVI + COMA – Transmission LMP (ex-ante)
Transmission revenue = AVI + COMA
Generators have contracts with Customers
Generator cost: Demand withdraw valued at LMP
Peak demand withdraw valued at Capacity Price
D
Contracts generators – customers:
Regulated prices: Nodal Prices (P< 2 MW)
Non Regulated Prices (P> 2 MW)
Distribution customers (regulated): Nodal Price + TCh + Distr.Losses + DAV
9
Transmission Regulation
Generators
ADDITIONAL
ADDITIONAL
Trunk System: are the economically
efficient and necessary facilities to supply
overall system demand.
TRUNK SYSTEM
SUBTRANSMISSION
SUBTRANSMISSION
ADDITIONAL
ADDITIONAL
Distributors
Customers
Additional Systems: in-feed lines of
generators and lines used exclusively by
non-regulated customers.
Subtransmission System: are the
facilities used by groups of customers
(regulated or non regulated price)
located in distribution concession zones.
Distributors
Customers
10
Trunk System
The valuation and expansion of the trunk system is determined every 4 years through a
Trunk System Study prepared by an external consultant.
All agents participate in the study via a consultation process. The study is coordinated
by a team (Ministry of Economy, CNE, SIC and SING gencos, SIC and SING trunk
transcos, discos and large consumers).
The study determines the VI, COMA, Economic Life and Indexation Formula.
Tolls= AVI + COMA – Transm.LMP, are allocated on G and D.
A 4-years Referential Expansion Plan is determined. The expansion plan is revised by
CDEC every year and CNE defines the definitive plan.
The trunk system projects maybe upgrades of the existing system or new projects:
–
Upgrades of the existing system are assigned directly to the facility owner (awarded to the
contractor with minimum VI, with a cap VI+15%)
–
New projects are awarded through a competitive tender process called by CDEC (winner is the
company that offers the minimum AVI+COMA, valid for 20 years)
There is open access and CDEC manages the reliable and economic dispatch.
11
Trunk Transmission Expansion Plan
TECHNICAL NORM
SQS
DEMAND
FORECASTING
GENERATION
INDICATIVE PLAN
USE OF TRANSMISSION SYSTEM
STUDIES - SDDP
USERS
TO CONNECT
TRANSMISSION CAPACITY
FUEL COSTS FORECASTING
IDENTIFY SECTIONS WITH
CONGESTION
TECHNICAL STUDIES:
- Load Flow AC
- Transient Stability
- Shortcircuit
- Special Studies
DETERMINE ALTERNATIVES
FOR SYSTEM EXPANSION
VALUE OF INVESTMENT AND O&M COST
ENVIRONMENTAL IMPACT ANALYSIS
ECONOMIC EVALUATION
Minimize: Investment + Operation + Unsupplied Energy Costs
RECOMMEND TRUNK
TRANSMISSION INVESTMENT
12
Technical Norm of Security and Quality of Service
(Enacted in May 2005)
Reliability:
•
Characteristic of the power system jointly determined by the
adequacy, security and quality of service.
ADEQUACY
Attribute of the power system whose installations are
sufficient to supply its demand.
SECURITY OF
SERVICE
Ability of the power system, or part of it, to respond to
disturbances and to minimize the loss of load, through
back up and ancillary services.
QUALITY OF
SERVICE
Attribute of the power system jointly determined by the
quality of the product, the quality of supply and the
quality of the commercial service, delivered to the
different users and customers.
13
Technical Norm of Security and Quality of Service
Main Security of Service Standards for planning:
Planning and operation must keep the operational margins and reserves
to guarantee that a single contingency does not affect other facilities or
provoke their uncontrolled disconnection.
– Unsupplied energy may arise as a solution if it is optimum for the system
In the Trunk Transmission Study, the expansion projects must comply
with the N-1 criteria. The economic evaluation of the N-1 criteria can
include EDAC (demand shedding) or EDAG (intertripping), but CDEC
must assure its optimum operation for the system.
N-2 criteria is not efficient in Chile.
14
Today
Expansion Plan 2007-08
N
Cardones
N
Maitencillo
N-1
P. Azúcar
Security
level
in the SIC
Trunk
System
N-1 r
Quillota
N-1
Polpaico
N-1 r
A.Jahuel
N
N
N-1
154 kV
500 kV
Ancoa-Itahue
N-1
Charrúa
N
OK
Temuco
Security risk
Adequacy risk
N
P.Montt
15
Congestion levels in the SIC Trunk System (2005-2009)
2005
2006
2007
2008
2009
2010
Cardones
Maitencillo
P. Azúcar
Quillota
Polpaico
Alto Jahuel
Itahue - Ancoa
Charrúa
Temuco
Puerto Montt
Congestion level:
percentage of time
when peak flows reach
transmission capacity
= 0%
0% - 10%
10% - 20%
20% - 30%
30% - 40%
> 40%
16
Security Criteria of SIC’s Main Transmission Lines
2004
2008
10%
21%
19%
7%
72%
71%
17
Security Criteria of SIC’s Trunk System Busbars
2004
2008
15%
20%
15%
10%
70%
70%
18
Investment Evaluation Cases
1) Automatic Load Shedding Scheme (EDAC) for Specific
Contingencies
2) Upgrade current limits of the 500 kV Trunk System
3) Security Criteria in the operation and investment
planning: example in the South Trunk System
19
Investment Evaluation Case 1
1) Automatic Load Shedding Scheme (EDAC) for Specific
Contingencies
2) Upgrade current limits of the 500 kV Trunk System
3) Security Criteria in the operation and investment
planning: example in the South Trunk System
20
21
22
10 MW
23
10 MW
24
Studies in 2008 Revision of the Trunk System Expansion Plan
Problem:
Voltage Stability
Options:
Dispatch of Northern Plants
–
It is very expensive for the system
Do not dispatch plants but add
EDAC
–
Lower Security and Quality of Service
but cheaper
Install an SVC
–
It solves the Voltage Stability problem
but requires 24 months to
commissioning
Images by ABB
25
Economic evaluation of options
Operational and unsupplied energy costs of the
system:
Taltal Diesel
Taltal Gas
Automatic Load Shedding
Squeme (EDAC)
US$ 22,486,500
/yr
US$ 7,362,700/yr
US$ 7,031,100/yr
NOTE: EDAC considers CUE (Cost of Unsupplied Energy) and
additional generation of diesel turbines at D. de Almagro
Expansion cost of installing an
SVC:
Investment Cost
US$ 13,000,000
Annual Value of Investment
US$ 1,770,000/yr
26
Case 1: In summary
SING
• N-1 criteria was relaxed to N by CDEC due to the expensive
cost of generation in the SIC north zone.
• For the future, investing in SVC is cheaper, thus N-1 criteria
is met and congestion is fully avoided.
27
Investment Evaluation Case 2
1) Automatic Load Shedding Scheme (EDAC) for Specific
Contingencies
2) Upgrade current limits of the 500 kV Trunk System
3) Security Criteria in the operation and investment
planning: example in the South Trunk System
28
200 km
SPS in the 500 kV system:
Automatic control of reactors (MAIS)
SPS in Santiago area:
Under-frequency load
shedding scheme (EDAC)
29
200 km
30
200 km
31
200 km
32
Upgrade of the 500 kV Trunk System
2000
2009
2000
2010
2000
2011
2012
2000
2000
1500
1500
1500
1500
1500
1000
1000
1000
1000
1000
500
500
500
500
500
0
0
0
0
0
2013
1600
MW
Oct. 2010
Ancoa
Charrú
Charrúa
Hydro
Plants
1400
MW
250
km
75 km
130
200 km
km
Gas
Plants
SVC
Polpaic
o
A.
Jahuel
New Coal Plants by
2010
Cerro Navia
New Installed
Capacity: 700 MW
STATCOM
Hydro
Plants
33
Case 2: In summary
SING
• N-1 criteria is kept by the importance of the 500 kV system
on the SIC security of service.
• Investing in additional reactive power compensation is the
solution while a third 500 kV line is constructed.
• LMP signals moved the generators affected by congestion in
order to study and negotiate an expansion project with the
transmission company.
34
Investment Evaluation Case 3
1) Automatic Load Shedding Scheme (EDAC) for Specific
Contingencies
2) Upgrade current limits of the 500 kV Trunk System
3) Security Criteria in the operation and investment
planning: example in the South Trunk System
35
South Trunk System
Security Criteria for today’s operation
South Trunk System
(All lines and busbars are 220 kV)
Diesel
Turbines 100
MW
SIC
Dam Hydro Plant
170 MW
SVC
Barro Blanco
CDEC
operational limits
Puerto Montt
Valdivia
Cautín
N
(290 MVA)
N
(290 MVA)
THERMAL CAPACITY LIMITS
Why N criteria instead of N-1?
36
South Trunk System
Security Criteria for today’s operation
SIC’s economic operation in 2010
with Cautin-Valdivia operating N-1 (145 MW)
Wet condition
Diesel
Turbines 100
MW
100 MW
SIC
Dry condition
Dam Hydro
Plant 170 MW
170 MW
N-1 reached
Diesel
Turbines 100
MW
85 MW
145 MW
SIC
40 MW
Barro Blanco
Cautín
Valdivia
60 MW
70 MW
Dam Hydro
Plant 170 MW
Barro Blanco
Puerto Montt
Cautín
Valdivia
140 MW
60 MW
N-1
N-1
(145 MVA)
(145 MVA)
70 MW
Puerto Montt
140 MW
Normal operation in this zone depends strongly on
the expected hydrological condition for each year
37
South Trunk System
Security Criteria for today’s operation
If N-1 criteria is used:
•
•
For dry conditions, diesel turbines (200 US$/MWh) are dispatched in order to
supply the local peak demand
As a result the generation costs are higher compared to the N-operation case
On the other hand, the line can be N-operated using EDAC.
CUE is valued with a Short-Term Cost of Unsupplied Energy of 2000 US$/MWh
Present value of
annual costs
MMUS$
Operational Economic Evaluation
N with EDAC is preferred
EDAC
Operate N-1
Operate N with EDAC
Option
Generation
costs
Cost of
unsupplied
energy with
EDAC
38
South Trunk System
Security Criteria for future expansion
South Trunk System investment planning
New line 1 x 220 kV Cautín – Valdivia
Diesel
Turbines 100
MW
Dam Hydro Plant
170 MW
SIC
Barro Blanco
Cautín
Planning limits
with expansion
435 MVA
Puerto Montt
Valdivia
290 MVA
What option is cheaper for the system?
Invest in order to reduce operational costs, but paying higher tolls
Postpone the expansion assuming a probability to have congestion
and unsupplied energy costs
39
South Trunk System
Security Criteria for future expansion
Option 1:
Invest to increase transfer limits
Diesel
Turbines 100
MW
Option 2:
Continue operation within current limits
assuming the higher costs
Dam Hydro
Plant 170 MW
Diesel
Turbines 100
MW
Dam Hydro
Plant 170 MW
SIC
SIC
Barro Blanco
Barro Blanco
Cautín
Valdivia
Puerto Montt
Cautín
Valdivia
Puerto Montt
40
South Trunk System
Security Criteria for future expansion
Present value of
annual costs
MMUS$
Planning Economic Evaluation
Investment cost
Generation
costs
Long term unsupplied energy
costs
Short term unsupplied energy costs
Invest
Postpone
Option
Key input data for the evaluation: - Line outage rate
- Duration of outage and recovery time
- Long-term cost of unsupplied energy (552 US$/MWh)
- Short-term cost of unsupplied energy (2000 US$/MWh)
- Investment and O&M costs
- Operation costs (generation)
41
Case 3: In summary
SING
• N-1 criteria is relaxed to N due to the lower cost of
unsupplied energy compared to the cost of generation in the
SIC south zone.
• Expanding the capacity of the link in order to improve the
security levels and reducing the generation costs is not an
efficient solution.
• Using N criteria is the efficient operation and investment
policy in this case.
42
HVDC Transmission
Project –under
Additional
System Expansion
HVDCStudy
Study
CHILE
Transelec Transmission
Santiago
SIC
Project:
HVDC Line, 2000 km
1000 km
HVDC converter stations
Puerto Montt
HidroAysén Power Plants:
2013 Baker 1
1000 km
– 660 MW
2015 Pascua 2.2 – 500 MW
Cochrane
2017 Pascua 2.1 – 770 MW
2019 Pascua 1
– 460 MW
2021 Baker 2
– 360 MW
TOTAL
2750 MW
43
Conclusions 1/2
SING
• The transmission system has grown permanently according
to the energy market development.
• Chilean energy market situation is evolving to a new scenario
dominated by coal fired and hydro power plants. Renewable
energies are expected to have a lower participation in the
energy matrix.
• Changes to transmission regulation in Chile since 2004 have
been positive, allowing transmission investment to grow up,
particularly in the trunk system with a co-operative planning
scheme
44
Conclusions 2/2
SING
• Transmission expansion planning is performed following a
market-based economic evaluation and following probabilistic
reliability criteria.
• Open access to the transmission system has been in tuning
with the connection of growing demand and generation,
providing a clear and fair value of transmission for users.
• Short and long term economic evaluation are always present,
with LMP providing the right signals for the system operation
(congestion management) and planning (trade off between
congestion and investment).
45
Interconnecting Chile with energy
www.transelec.cl
46
Biographical note:
Juan C. Araneda is an Electrical Engineer graduated from Universidad Técnica Federico Santa
María, Chile (1983) and Master of Philosophy from University of Manchester Institute of Science
and Technology, UMIST, UK (2002).
He worked in the distribution company Chilquinta (1984-1989), the generation company Colbún
(1989-1994) and the transmission company Transelec (1994 to date). Currently he holds the
position of System Development Manager in Transelec.
He has participated as invited lecturer in several universities in Chile.
He is a member of CIGRÉ (SC B4) and Senior Member of IEEE.
Email: jcaraneda@transelec.cl
47