Issue 27 - System Operator Newsletter

Frequency keeping costs

The System Operator meets its frequency PPO by contracting with certain generators to manage the frequency within the limits specified in the EGRs. Contracting is undertaken through the market and two approved generators in each island offer their service at prices and times selected by the offering party. The frequency keeper has the role of maintaining the system frequency between a normal operating range of 49.8 to 50.2 Hertz.

The System Operator uses a software application (Freqkemy) to select the lowest offer and that offering party is then scheduled (through the market tools) to provide the frequency keeping service. Frequency keeper selection is based on the required band power (e.g. 25MW, 50MW or 75MW) and price. Selection is made based on the lowest offer combination of band quantities and prices that make up the required frequency band (typically, a 50MW band). The rules do not specify how the frequency keeper is to be selected; the 'lowest offer' approach has been developed and adopted by the System Operator based on the offers received.

For a variety of complex reasons there is often a material difference between the cost of a frequency keeper's offer and the amounts paid for the service, the difference being related to additional compensations paid to constrain a provider on and off (in order for the selected provider to be generating at a level where the plant can deliver the contracted service).

There has been increasing concern expressed in industry circles regarding the cost of frequency keeping. We thought it would be useful to show how these costs have changed over the last couple of years and to also consider how the costs of frequency keeping relate to energy prices.

The Electricity Commission has recently asked us to amend the frequency keeper selection methodology to better take into account the likely cost (as distinct from the market offers). We are evaluating how and when such changes can be introduced.

National Winter Group 2008

Many of you will be aware of the continuing industry work intended to better assure a security of supply in the forthcoming winter. Reports from the working group have been published.

The System Operator is developing a new Special Winter Schedule (SWS).

The aim of the SWS is to assist participant decision making and ensure participants have adequate information to make generation or demand side response available at critical times.

The schedule is in the late stages of design and we have every expectation it will be published in early May 2008.

The SWS will use the inputs described in rule 1.3.2 of schedule G6 of part G and rules 92.1 and 92.2 of Schedule C4 of Part C.

The schedule will be produced every 2 hours from 14:00 each day and will contain information for the following trading periods:

• at any time prior to 14:00 on any day, the remaining trading periods of that day OR
• at any time from 14:00 on any day, the remaining trading periods of that day together with each trading period of the next day.

The following information will be published for each trading period:

a. Forecast prices for electricity at all grid injection points and grid exit points to all purchasers and generators.

b. Forecast prices for sustained instantaneous reserve and fast instantaneous reserve to all purchasers and generators.

c. Calculated quantities to each generator relating to their own offers.

d. Arc flows to all purchasers and generators.

e. Group constraint arc flows1 to all purchasers and generators.

f. Group constraint formulas to all purchasers and generators.

g. HVDC component flows to all purchasers and generators.

h. HVDC risk offsets to all purchasers and generators.

i. Disconnected nodes and infeasibility situations for all grid injection points and grid exit points.

j. The expected aggregate supply curve at the reference Benmore 220kV bus and the reference Haywards 220kV bus incorporating all offers from generators with prices adjusted for forecast marginal location factors.

k. Expected aggregate demand at the reference Benmore 220kV bus and the reference Haywards 220kV bus based on the demand forecast prepared by the System Operator.

The information in points a-i is of a type currently published from the Schedule of Dispatch Prices & Quantities (SDPQ). However, the information to be published in the SWS will extend out over a longer timeframe than the current SDPQ.

The information under point j is of a type currently published from the Pre-Dispatch Schedule (PDS). However, the SWS information will include offers made since the last PDS was run.

Please note: the information proposed under point k has not previously been published.

Update of HVDC and lower North Island system capabilities

We will shortly publish updated information regarding the transfer capabilities of the HVDC and lower North Island system, following the recent Transpower decision to return the Pole 1 to limited ‘emergency’ service. This will update the information published in 2006, previously made available on our website.

The updated information should be available by next week.

System Operator website

Responding to our customer survey results our website is about to have a make over.  Our site will have a similar look to the Transpower site which was changed recently.

We will be introducing the following:

• A new, improved search engine
• additional live data
• the ability to customise your own home page with information from our site that you frequently use.

The timing of the roll out of the new features on the site is likely to be in May or June of this year.

We have recently introduced a direct link to the System Operator site, which can now be accessed at: www.systemoperator.co.nz

Reserves management tool (RMT) training

We recently held our first RMT workshops, with participants coming from the industry (Contact and Meridian) and within System Operator. These workshops are targeted at those new to the industry or unfamiliar with the purpose and high level design and operation of RMT.

Further workshops are planned for later in the year, in both Wellington and Hamilton. Those who are interested in attending should email notifying their interest and indicating whether they wish to attend a Wellington or Hamilton workshop. Dates for these workshops will be confirmed by mid April.

Policy statement review for 2008

We recently applied for and have been granted exemption from filing a revised Policy Statement by 31 March, as required by the EGRs. We spoke to participants during February as part of our consultation for the review and found there was a marked lack of any issues people wanted us to include in the review. We ourselves had few matters and even those we regarded as ones we could live with until next year.

Consequently we decided to suspend the review and seek an exemption from having to complete it. The Electricity Commission agreed with our proposal. In the event any material change does become necessary we can seek a change to the Policy Statement at any time or depart from the Policy Statement (in which event we notify the departure and the reasons to the Commission).

Next year we do think there will be changes we wish to make. We have commenced our review of the security policy, as we mentioned in our last newsletter. We expect changes from that review may need to be reflected in the Policy Statement.

Market systems renewal project

Late last year we announced there would be a delay in our renewed market systems being brought into implementation. In December Transpower commenced a review of the project to ascertain what was required to be completed to allow implementation and to gain confidence on a revised delivery schedule. That review has taken longer than hoped but is now nearly complete.

We hope to be able to advise new delivery expectations during April, after which we will embark on a series of briefing sessions with industry to provide more detail of the rescheduled project.

TPIX – farewell old friend

For some years Transpower made industry data available to participants through an electronic system commonly known as TPIX. The system was a combination of a database (the Transpower Information Exchange - whence TPIX arises) and a delivery application. Many people both within Transpower and in the industry received data from this system.

For a while now the TPIX system has been operating using aging and unsupported software. No upgrade of the systems has occurred for many years. The time has arrived where, for cost and practicability reasons, the TPIX system will be discontinued. From 31 May 2008 Transpower will no longer provide access to TPIX and the application will be taken out of service shortly thereafter.

Transpower’s subsidiary EMS, has developed a replacement service, known as em6. This service uses modern software and design and, as well, provides additional capabilities to the data service represented by TPIX. Many users of the TPIX system have elected to take the em6 service in lieu of TPIX.

Anyone interested in the em6 service should contact Peter Law at EMS on 04 463 0865 or 021 707 463.

System Operator Customer Survey 2007

We undertook a new customer survey in October – December of 2007.  The survey sought to give us an updated perspective on how customers see us.  We asked participants about ten internationally recognised service factors (the same ones we asked about last time). 

The service factors asked about were:

• are we easy to get hold of
• are we  friendly
• are staff knowledgeable
• do we understand your needs
• are we prompt
• do we keep you informed
• do we keep their promises
• do we get things right first time
• are there no surprises
• do we follow up.

Each person surveyed was asked how important each service factor was to them and how the System Operator was performing against that expectation. The summarised results are set out below.

Overall performance
The following graph ranks our overall performance (excluding our real time
operations)

Trend of findings
The following graph shows how survey respondents rated change in our service levels (excluding our real time operations) over the six months prior to the survey.

What does this mean for System Operator?

Well, it means we have not yet reached our best and can continue to improve our service delivery experience. When we analysed the detailed information it was apparent that the number of people who participated in both the 06 survey and the 07 survey was less than 1/3rd of the people participating. The results from the group who have participated more than once showed a greater overall level of satisfaction than the newcomers. Further, the number of people participating was relatively small and an individual was able to influence the results more than possible in a larger survey.

However, we are pleased to have the results and have now asked our staff to consider ways that service can be improved, taking into account the comments we received.

As well as asking generally about our service we also polled people about individual matters such as our consultation procedures, access to our web site and so on. We received some valuable feedback and have commenced making some changes as a result.

We are grateful to those people who participated in the survey. Overwhelmingly you have indicated your belief that the survey is worthwhile and we should continue to carry this out.