2009 State of the Market Report
flexibly to setpoint instructions. The dispatch range of these units will change hourly based on the prevailing wind forecast. This is expected to be implemented on June 1, 2011.
Market Conclusions and Recommendations
Overall, the Midwest ISO’s real-time markets performed efficiently in 2009. The nodal market accurately reflected the value of congestion in the Midwest ISO and the introduction of ASM went smoothly and operated as expected. The ASM markets have led to increased dispatch flexibility and contributed to lower real-time price volatility.
As expected, prices in the real-time market were substantially more volatile than in the day- ahead market, although this volatility has declined since the introduction of ASM in January
The performance of the real-time market is compromised by at least four factors:
Reduced dispatch flexibility offered by many generators, which can make congestion more difficult to manage – this has improved substantially in 2009 but remains an issue;
The absence of a real-time model that optimizes the commitment and de-commitment of peaking resources;
Prices that do not always reflect the costs of peaking or DR resources when they are the marginal source of energy; and
Difficulties faced in integrating wind resources into the Midwest ISO markets.
To further improve the performance of the real-time market, we recommend the Midwest ISO consider the following changes (we provide recommendations regarding congestion management and external transactions in subsequent sections).
Develop real-time software and market provisions that allow gas turbines running at their EcoMin or EcoMax to set prices.
Develop provisions that allow non-dispatchable demand response (or interruptible load) to set energy prices in the real-time market when they are called upon in a shortage.
Improve the integration of wind resources into the Midwest ISO system by allowing them to be curtailable at a specified offer price and be eligible to set prices in the energy market.