2009 State of the Market Report
The figure shows the change in the dispatchable range for online generators in 2008 and 2009 as well as the “commercial flexibility”, which reflects the maximum dispatchable range they could offer physically according to the data they provide to the Midwest ISO. The vast majority of the Midwest ISO’s flexibility is provided by steam turbines. Although flexibility increased significantly in 2009, it remains considerably lower than the full physical flexibility that many generators could provide. This is important because losses in flexibility limit the Midwest ISO’s redispatch options for managing congestion.
The figure shows that flexibility increased substantially across all unit types in 2009. The introduction of the ASM markets contributed to the improved flexibility in several ways. First, the quantity of ASM products that a participant can offer is limited by the dispatchable range, as well as ramp rates. Second, the introduction of the Day-Ahead Margin Assurance Payment (“DAMAP”) makes generators whole if they are harmed by responding flexibly in periods when prices are volatile. Third, output ranges previously held out of the real-time market to provide ancillary services are now available and co-optimized with energy. In other words, suppliers no longer offer exclusively energy or ancillary services, but can offer both.
The next analysis evaluates changes in the availability of generation after the day-ahead market because they can compel the Midwest ISO to commit additional capacity in real time. These changes in supply between the day-ahead market and real-time market are shown in Figure 39.
On average, 3.2 GW (6 percent) of capacity scheduled in the day-ahead was unavailable for the real-time market dispatch in 2009. This is an increase of almost 10 percent from 2008, which was primarily attributable to:
De-commitments or deratings after the day ahead; and
Decisions by suppliers scheduled day-ahead to not start and buy back energy at the real-
time price instead.