Energy Market Management Booklet - Siemens

Market Operations -Balancing the Interestof the Public and MarketParticipantsOperating an energy market requires balancing the complex interestsof the public, market participants and the market operator.Siemens helps market operators meet this challenge through itsSpectrum Power Energy Market Management (EMM) system thatincorporates the latest market clearing technology in a set ofmodular, high performance components and engines.Public interests include reliability of the electric energy supplyand the macroeconomic interest for the lowest market-clearingprice for electric energy.Market participants need to optimize investments, increaseoperational efficiency and have timely access to highly accurateinformation.Market operators need to be highly efficient in running complexoperations, flexible in adjusting market rules and proficient incoordinating grid security while providing highly available marketoperations.Spectrum Power EMM meets these needs and more with ahighly modular solution that lowers market prices, optimizesbusiness processes and increases grid reliability for LMP-basedcentralized markets. The components of the Spectrum PowerEMM are best deployed as an integrated solution; however, eachcan be individually applied to an existing market managementsystem to preserve investments already made into legacy systems.Alternatively, market operators can get the benefits of the keycomponents by subscribing to Application Hosting Servicesprovided by Siemens.EMM is highly adaptable and configurable to meet a wide range ofmarket designs - from a simple Economic Dispatch-based market toa complex Security Constrained Unit Commitment market. It alsoprovides a very high degree of flexibility to adapt to changes inmarket rules within any chosen market structure.Spectrum Power HistoricalInformation System: ahigh performance datawarehousing system forarchiving of all market dataand related operationaldata including revenueinformation from metersDataWarehouseIntegratiAn integration platformthat uses a service-orientedarchitecture with XMLformattedmessages (basedon the CIM Market Extensions)and a message-orientedmiddlewareScalable to Process Very Large ModelsThe hardware architecture is designed to meet thetough performance requirements for very large size ofnetwork models. During the security assessment phaseof the Security Constraint Unit Commitment, it is necessaryto perform complete studies for all 24 hours of thenext day’s schedule to ensure that the system is withinthe n-1 contingency requirement. The security assessmentcan be independently performed on multipleapplications servers for each study period. The numberof servers required is purely a function of the size of themodel.Cutting Model Maintenance CostThe Spectrum Power Information Model Manager (IMM)is a powerful desktop data modeling, data maintenanceand data exchange tool specially designed for electricpower applications, network management and marketoperations. It helps to reduce cost and improve modelInfrastructure and Tools forHigh Performance and Easequality by providing graphical topology verificationcapability and extensive import and export facilities,compliant with the EPRI CIM standards. The XMLbasedimport function enables the market operator toeasily merge model information provided by marketparticipants, transmission service providers and loads.The IMM can automatically produce the graphicrepresentation of the model which is used in theMarket User Interface to display pricing down to thebus level.Limiting the Risk of Exposure to Legal ClaimsSaving the Market Data and documenting the PowerSystem State for later review and to mitigate possibleMarket Participant claims is of utmost importance tothe Market Operator. The Spectrum Power HistoricalInformation System is a high performance datawarehousing system designed for the scalabilityand availability requirements of market operators.The information can be easily retrieved using Webtechnology and imported in widely available officeand professional analysis tools.Meeting the Control Area OperationsRequirementsSiemens can provide all Control Area control andmonitoring functionality to meet the highestrequirements of Transmission Operators andGeneration providers. This functionality includesadvanced Grid Control and Monitoring, TransmissionGrid Security Applications for both real- time controland studies, Resource Scheduling support and realtimeUnit Control.

The MarketParticipant InterfaceThe Market Operator and Market Participants interact throughthe Market Participant Interface, a set of secure, web-basedUser Interface and Web Services presented in a web portal.Market Participants perform all day-to-day transactions suchas entering bids and bid extensions, and accessing currentand historical Market Prices, Schedules, Load Forecastsand Settlement information. This is carried out throughpersonalized views of the portal, which automates andoptimizes all interactions with the market.The highest transparency levels of the state of the market areachieved through the integration of notification and instantmessaging capabilities and the presentation and availabilityof data. This is done within a secure, Public Key Infrastructure(PKI)-based environment.User InterfaceThe Market Participant User Interface is a set of web-based,dynamic pages that presents data and information in tabularand graphical forms including scalable displays for networkinformation. It requires no software installation other than astandard web browser and standard Scalable Vector Graphics)SVG viewer and Java® plug-ins. All pages that are generatedare pure HTML and Javascript®, with the scalable displays inthe SVG XML format. Dynamic data updates in these displays,as well as dynamic messaging, alarms and notifications areenabled by the use of a Java applet.SecurityA modern, n-tier architecture is used for security with distinctweb, application and database tiers. Use of either an existingcorporate Public Key Infrastructure (PKI), B2B-enabled PKIor a separate market-dedicated PKI allows the utilization ofdigital certificates or biometric devices for authentication andauthorization, ensuring non-repudiation for all transactions.Adapt to Changing Market RulesThe Market Participant Interface incorporates a business rulesengine component, which allows immediate validation of inputdata from the Market Participant. Data submissions from theMarket Participant can be immediately verified for complianceto market rules, and feedback is provided instantly.The Market Operator has the flexibility to rapidly adapt toregulatory changes and evolving market rules by using a visualdevelopment environment for creating, editing and testingbusiness and market rules. New or modified rules can bedeployed without requiring software changes or downtime.Optimizing Processes and FlexibilityManage Workflow and Automate ProcessesA workflow controller component manages the workflowbetween the Market Operator and Market Participants. Fromenforcing the market timeline to sequencing intervention thatmay be required of the Market Operator, the workflow controllerorchestrates the processes that are required in the market,providing a combination of automated process logic, humanworkflow and robust exception management that weavessystems, people and organizations into an integral efficientprocess for successful completion of each transaction.Web Services, defined using the Web Services DefinitionLanguage (WSDL) and published to a Universal Description,Discovery and Integration (UDDI) directory, allow forflexible automation of processes such as bid submission andmodification, upload and download of data and other tasks. Thishelps that the day-to-day activities of trading and responding tothe changing signals in an energy market are coordinated andefficient.Market Results including Locational Marginal Prices canbe dispalyed by bus in dynamic one-line diagramsExtensive Bidinformationavailable,includingtabulardisplays andchartsSpectrum PowerTransmission SecurityAssessment Engine utilizinga full AC network modelincluding transmissionconstraints that guaranteessatisfaction of reliabilitycriteria during marketoperationTransmissionSecurityAssessmenttion PlatformInformationModelManagerSpectrum PowerInformation ModelManger: an efficient, EPRICIM-compliant modelcreation and maintenancetool that includesincremental mergingof models provided bymarket participants andtransmission serviceprovidersA Market Rules Engineas an integral part ofthe Market ParticipantInterface that enablesan implementationindependent, flexiblemeans to define complexbid validation rules and toenforce compliance by allmarket participantsMarketRulesEngineControlAreaOperationsSpectrum Power EnergyManagement System providingcontrol and monitoringfunctionality for singleand multiple Control AreaoperationsA Market ParticipantsInterface: a highly automatedbid processing andnotification infrastructurefor efficient bid collection,validation and posting ofmarket clearing resultsMarketParticpantInterfaceMarketInformationRepostitoryMarketClearingEngineA Market Clearing Enginefor clearing and schedulingof day-ahead, hour-aheadand real-time marketsA Market Information Repositorythat strictly adheres to a standardizeddata model resultingfrom a collaborative effort bykey stakeholders to expand theCommon Interface Model toinclude Market OperationsBilling andSettlementA Settlement PreprocessingEngine for managingLocational Marginal Pricingfor ex-ante and ex-postsettlements, includingCongestion Revenue RightsprocessingSiemens’ Spectrum Power EMM is built on a modern n-tierarchitecture utilizing best practices from similar wellestablished e-businesses. The system is composed of clearlyidentified functional modules and related standardizedinterfaces. The technology platform of the EMM systemincludes leading third-party standard and de-facto standardtechnologies for database services, communications, securityand user interface/web services. The use of industry standardsenables deployment of the EMM system on Unix, Linux orMicrosoft Windows platforms, offering choices that best fitthe specific IT strategy of individual enterprises. Heavy relianceon industry standards and de-facto standards in hardwareand software platforms enhances long-term IT investmentprotection.

Next Day Day 24 24 First SettlementThe Market Clearing EngineThe Market Clearing Engine is the core of SpectrumPower Energy Market Management and is based onthe Security Constrained Unit Commitment (SCUC)software. For the first time ever, the Market ClearingEngine does not impose artificial limitations on thedesign of centralized electric energy markets. Itis now possible to include all relevant production,load and network constraints when clearing thecentral spot market simultaneously for energy andancillary services. This solution approach, knownas co-optimization of energy and ancillary services,produces the lowest overall clearing prices whilemeeting all physical constraints and grid securityobjectives.Superior Technology - Optimal SolutionThe Siemens technology utilizes advanced MixedInteger Programming (MIP) techniques combined witha Separable Quadratic Interior Point Method to obtainthe optimal SCUC solution. The MIP-based SCUCrepresents the next step when compared to thetraditional Lagrange Relaxation-based SCUC.The Siemens MIP-based SCUC implementation reachesthe optimal solution without manual interaction orarbitrary relaxation of constraints. It produces theoptimal solution consistently and independent ofthe operator.Improving Reliability - Achieving the Lowest PricesThese breakthrough technologies enable marketdesigns based on a full AC network model, allowingMarket Operators to manage congestion wellbefore it gets to real-time. This may be inherentlymore complex, but the Siemens technology is capableof managing that complexity and actually makesday-to-day interactions between Market Operatorsand Participants simpler and more transparent.The handling of a large number of transmissionconstraints is one of the most important aspects inachieving feasible schedules and avoiding the highcost of congestion management in real-time, whenavailable resources may be scarce and expensive.Day-Ahead Market InputsPerformanceTracking DataWeather andHistorical LoadDataReserveMarginsDay LoadForecastTransactionRequestsGenerationOffersAncillaryServices OffersEnergyPurchase BidsOutage DataOne Engine for Multiple Markets – AchievingFlexibilityHour-Ahead Market InputsDay-AheadMarketThe Market Clearing Engine is designed for easyactivation/de-activation of variables, variousobjective functions and constraints, enabling easyswitching between the different runs such as a fullSecurity Constrained Unit Commitment, a ReliabilityCommitment, a Security Constrained DynamicDispatch or a Security Constrained Economic Dispatch.This built-in flexibility enables the use of the samemarket-clearing engine in multiple market structuressuch as a Day-Ahead Market or a Real-Time Market.The speed necessary to facilitate the flexibility ofsolving the different optimization problems usingthe same engine is achieved by applying Siemens’domain knowledge, the superior MIP technology andinnovative computing platforms.TransactionRequestsGenerationOffersAncillaryServices OffersUpdated LoadForecastGenerationCommitmentand ScheduleLoad Contractsand AdjustedForecastTransationSchedulesLMPs andTransmissionUsage ChargesAncillaryServices MarketClearing PricesDay-Ahead and Real-TimeMarket Process FlowHour-AheadMarket30 Min Priorto HourReal-TimeLoadHourly ModifiedGeneration andTransactionSchedulesTransmitted inReal-TimeReal-TimeDispatchPosted Afterthe FactUnit ControlSetPointsUnitBasepointsLMPsAncillaryServices MarketClearing PricesPerformanceResultsEase of Day-to-Day OperationsComparison of Siemens' Market Clearing Engine Capability with theTraditional Lagrange Based MethodsAt the core of the Market Clearing for centralizedmarkets is the Security Constrained UnitCommitment and Economic Dispatch, a complexoptimization problem.The chosen optimization algorithm must beable to produce a solution within minutesto support all coordination efforts necessarybetween market operators and participants.A traditional way to meet the time requirementshas been to relax the optimization problemand not include all real-life parameters andconstraints, risking real-time congestion andunpredictable market clearing prices.Posted Afterthe FactTraditionalFunctionSiemensMIP LagrangeKnown distance from optimal solution Yes NoModeling of large number of coupling constraints Yes NoRamp rate as function of unit loading Yes NoModeling of forbidden regions with crossing rules Yes NoHeuristics or manual intervention required to achieve a No Yesfeasible solutionOptimal discrete relaxation of infeasible constraints Yes NoFlexibility for adding new constraints and models Yes NoSolving the Complexity the Day-Ahead