California ISO Board of Governors Approves Convergence Bidding.FOLSOM, Calif. -- Today the California Independent System Operator Corporation (ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. ) Board of Governors unanimously approved adding convergence bidding in the ISO market in early 2011. Convergence bidding allows market participants The term market participant is used in United States constitutional law to describe a U.S. State which is acting as a producer or supplier of a marketable good or service. When a state is acting in such a role, it may permissibly discriminate against non-residents. to better manage price fluctuations that can occur between the day-ahead and real-time markets. It is used in most competitive energy markets in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. because it reduces risk and provides market liquidity. Reducing the price differential between market time frames provides a variety of benefits, including: * Increased liquidity which helps mitigate market power * Lower cost to serve load through a more efficient day-ahead unit commitment * Ability to hedge against real-time market exposure stemming from forced generation outages * Improved grid operations because the day-ahead market better reflects real-time conditions * May be used to account for anticipated intermittent generation in the day-ahead market Convergence bids are financial; they do not represent physical energy or load. If cleared in the day-ahead market, they are settled at day-ahead prices and then automatically liquidated DAMAGES, LIQUIDATED, contracts. When the parties to a contract stipulate for the payment of a certain sum, as a satisfaction fixed and agreed upon by them, for the not doing of certain things particularly mentioned in the agreement, the sum so fixed upon is called liquidated damages. (q.v. with the opposite position at real-time prices. For example, a virtual supply bid would be an offer to sell energy at the day-ahead price and buy the same amount back at the real-time price. A virtual demand bid would be just the opposite. Generators and utilities that are also bidding to buy and sell physical energy can use these strategies to reduce the risk of being caught on the wrong side of price fluctuations between the day ahead and real time. Market participants that do not represent physical load or generation can participate in convergence bidding as a way to potentially make a profit if they bid wisely. But they also assume some risk, relieving physical load and generation from some of their risk. The ISO proposal is the result of an extensive stakeholder stakeholder n. a person having in his/her possession (holding) money or property in which he/she has no interest, right or title, awaiting the outcome of a dispute between two or more claimants to the money or property. process. California ISO Media Hotline | 888.516.6397 151 Blue Ravine Road | Folsom, California Folsom is a city in California, United States. Folsom is most commonly known by its famous Folsom Prison, and is a thriving suburb of Sacramento. As of 2007, the State of California's estimate of Folsom's population is 70,835. 95630 | www.caiso.com Follow us on Twitter A Web site and service that lets users send short text messages from their cellphones to a group of friends. Launched in 2006, Twitter (www.twitter.com) was designed for people to broadcast their current activities and thoughts. | http://twitter.com/CalifornialSO The California ISO operates the state's wholesale transmission grid, providing open and non-discriminatory access supported by a competitive energy market and comprehensive planning "Comprehensive Plan" is a term used by land use planners to describe a set of goals and policies developed by a municipality to accommodate future growth. Typically the comprehensive plan will look at estimated growth within a specific time period, for example, 20 years. efforts. Partnering with more than 90 client organizations, the ISO is dedicated to the continual development and reliable operation of a modern grid that operates at the least cost to the benefit of consumers. The ISO bulk power market allocates space on transmission lines, maintains operating reserves and matches supply with demand. Recognizing the importance of global climate change, the ISO welcomes new, advanced technologies that will help meet the energy needs of 30 million Californians efficiently and cleanly clean·ly adj. clean·li·er, clean·li·est Habitually and carefully neat and clean. See Synonyms at clean. adv. In a clean manner. clean . The ISO is a nonprofit public benefit corporation. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion