Changing Market Dispatch Ken Rutter Evolution of Dispatch
- Slides: 10
Changing Market Dispatch Ken Rutter
Evolution of Dispatch OLD DISPATCH • Baseload • Regulation Load Following • Reliability CURRENT DISPATCH • Emphasis on Lowest Price Dispatch • Tax Subsidy Influence • Diverse Generation Mix • Reliability 2
What is Baseload Generation? It use to be that the efficiency of coal resulted in units running at maximum output. Their operation profile looked like a block volume. Coal was baseload. Other units followed load. Now wind is “cheaper”, and some view it as being first dispatched. Is “baseload” even a relevant term any longer? 3
Wind Tax Subsidies Were a Game Changer SPP Total Load SPP Wind Generation SPP hit a new wind to load record on 12/4 56. 25% Tax benefit up to $25 -$30/MWh 4
Basin Focuses on Economic Dispatch of Our Assets Basin’s members benefit by dispatching our assets based on market economics or by purchasing lower cost energy from the market – Lower fuel costs – Purchases below generation costs (negative prices at times) – At times our assets are cheaper than others and can add value through surplus sales 5
Basin September Wind Generation • Basin currently has 1400 MW of wind generation available • Basin’s average September load was 2322 MW at our load zone 6
Basin September Coal Dispatch • Coal backed down to unit minimums when uneconomic • Challenges at times with operating at minimums with financial losses • More and more, short-term economic shutdowns are becoming common 7
Basin September Natural Gas Dispatch • Basin currently has 1500 MW of natural gas generation available • Gas dispatch for reliability and sometime for regulation value • Maintenance costs for natural gas are considered in dispatch decisions 8
Challenges Ahead • Operation of coal assets in this type of market: – Unit minimums – Operational risks (fuel in bunkers) – Ability to do short-term shutdowns – Wear and tear from ramping • Operation of natural gas assets in this type of market: – Maintenance engineered previously based on unit starts – What is the true cost of maintenance? • Operation of wind assets – Negative market prices vs. penalties in power purchase agreements – Market saturation and capability to handle wind vs. load levels 9
Thank You