FACTORS CONTRIBUTING TO DIFFERENCES BETWEEN DISPATCH AND PRE-DISPATCH OUTCOMES

PREPARED BY: DATE: Electricity Market Performance 7 February 2012

FACTORS CONTRIBUTING TO DIFFERENCES BETWEEN DISPATCH AND PREDISPATCH OUTCOMES

Contents
Disclaimer ..................................................................................................................... 3 Abbreviations and Symbols .......................................................................................... 3 1 2 3
3.1 3.2

Purpose of this Paper ....................................................................................... 4 The Functions of Dispatch and Pre-dispatch ................................................... 4 Monitoring of Pre-dispatch Performance .......................................................... 5
Regional Demand ...................................................................................................... 5 Constraint Equation RHS ........................................................................................... 5

4 5
5.1 5.2

Factors contributing to differences between Dispatch and Pre-dispatch .......... 6 Externalities...................................................................................................... 6

Unplanned Outages ................................................................................................... 6 Short-Notice Changes to Planned Outages ................................................................ 6

6
6.1 6.2 6.3 6.4 6.5 6.6
6.6.1 6.6.2

Market Design .................................................................................................. 6

5-Minute Dispatch versus 30-Minute Pre-dispatch Resolution ................................. 7 5-Minute Dispatch versus 30-Minute Pre-dispatch Frequency ................................. 7 Rebidding of Unit Offers for the Current Trading Interval ............................................ 7 Rebidding of Unit Ramp Rates for the Current Trading Interval .................................. 8 Reporting of Power System Security and Reliability Issues ........................................ 8 Non-Conformance with Dispatch Instructions ............................................................. 9
Use of Non-Conformance Constraint Equations ......................................................................... 9 Impact of Non-Conformance ....................................................................................................... 9

7
7.1
7.1.1 7.1.2 7.1.3 7.1.4 7.1.5 7.1.6

Implementation................................................................................................10
NEMDE Inputs ......................................................................................................... 10
Demand Forecasts .................................................................................................................... 10 Constraint Equation RHS Power System Quantities ............................................................. 10 Constraint Equation RHS Network Ratings ........................................................................... 11 Constraint Equations Pre-Ramping of Planned Network Outages ........................................ 11 Constraint Equations - Ramping of Negative Inter-Regional Settlement Residues .................. 12 Intermittent Unit Generation Forecasts ..................................................................................... 12

7.2
7.2.1 7.2.2 7.2.3 7.2.4

NEMDE Solver ......................................................................................................... 13

Basslink Interconnector No-Go Zone ........................................................................................ 13 Fast Start Unit Commitment and Dispatch Inflexibility Profiles ................................................. 13 Unit Daily Energy Limits ............................................................................................................ 14 Use of Telemetered AGC Limits in Unit Energy and FCAS Models ......................................... 14

7.3
7.3.1 7.3.2 7.3.3 7.3.4

NEMDE Outputs....................................................................................................... 15
Over-Constrained Dispatch Pricing ........................................................................................... 16 Market Price Cap Override Pricing ............................................................................................ 16 Administered Pricing ................................................................................................................. 16 Mandatory Load Restriction Pricing .......................................................................................... 17

7 February 2012

Page 2 of 17

FACTORS CONTRIBUTING TO DIFFERENCES BETWEEN DISPATCH AND PREDISPATCH OUTCOMES

Disclaimer
Purpose
This report has been prepared by the Australian Energy Market Operator Limited (AEMO) to provide information about the differences between Dispatch and Pre-Dispatch.

No reliance or warranty
This report contains data provided by third parties and might contain conclusions or forecasts and the like that rely on that data. This data might not be free from errors or omissions. While AEMO has used due care and skill, AEMO does not warrant or represent that the data, conclusions, forecasts or other information in this report are accurate, reliable, complete or current or that they are suitable for particular purposes. You should verify and check the accuracy, completeness, reliability and suitability of this report for any use to which you intend to put it, and seek independent expert advice before using it, or any information contained in it.

Limitation of liability
To the extent permitted by law, AEMO and its advisers, consultants and other contributors to this report (or their respective associated companies, businesses, partners, directors, officers or employees) shall not be liable for any errors, omissions, defects or misrepresentations in the information contained in this report, or for any loss or damage suffered by persons who use or rely on such information (including by reason of negligence, negligent misstatement or otherwise). If any law prohibits the exclusion of such liability, AEMOs liability is limited, at AEMOs option, to the re-supply of the information, provided that this limitation is permitted by law and is fair and reasonable. 2012 Australian Energy Market Operator Ltd. All rights reserved

Abbreviations and Symbols

Abbreviation AGC APC AWEFS DPRG EST FCAS MPC MW NEM NEMDE NER NRM OCD RHS SCADA TNSP Term Automatic Generation Control Administered Price Cap Australian Wind Energy Forecasting System Dispatch and Pricing Reference Group Eastern Standard Time Frequency Control Ancillary Service Market Price Cap Megawatt National Electricity Market NEM Dispatch Engine National Electricity Rules Negative Residue Management Over-Constrained Dispatch Right-hand side (of a constraint equation) Supervisory Control and Data Acquisition Transmission Network Service Provider

7 February 2012

Page 3 of 17

FACTORS CONTRIBUTING TO DIFFERENCES BETWEEN DISPATCH AND PREDISPATCH OUTCOMES

Purpose of this Paper

This paper summarises the various factors that can contribute to differences between Dispatch and Pre-dispatch outcomes, and hence affect the ability of Pre-dispatch to forecast actual Dispatch outcomes. The paper also describes the primary purpose of Dispatch and Pre-dispatch, and how AEMO monitors the performance of Pre-dispatch. The paper does not attempt to explain the relative contribution of the various factors to differences, the rationale behind the current design, nor the scope to improve Pre-dispatch to allow better alignment with Dispatch, all matters which are regularly discussed through AEMOs Dispatch and Pricing Reference Group (DPRG).

The Functions of Dispatch and Pre-dispatch

Dispatch and Pre-dispatch are automatic processes that use the NEM Dispatch Engine software (NEMDE)1. Dispatch covers the current 5-minute dispatch interval only, and is updated and published by AEMO every five minutes on or close to the start of the dispatch interval2. The functions of Dispatch are to provide: scheduled and semi-scheduled participants with energy dispatch instructions for the operation of their plant, including fast start commitment instructions, to be met by the end of the 5-minute dispatch interval ancillary service providers with ancillary service dispatch instructions for the operation of their plant, including frequency control ancillary service (FCAS) instructions, to be met in the relevant timeframe market participants with 5-minute energy market prices, used to set the half-hourly spot price (trading price) for wholesale settlement purposes ancillary service providers with 5-minute FCAS market prices, used for wholesale settlement purposes

Pre-dispatch is a schedule of indicative half-hourly (or trading interval) forecast information that covers from the current trading interval to the end of the current and (if after 1230 hrs EST) the next trading day3. Pre-dispatch is updated and published by AEMO every 30 minutes on or close to the start of the half hour4. In that timeframe AEMO also updates and publishes, using the Pre-

2 3

NEMDE is AEMOs market solver software that produces an optimal dispatch outcome, schedules of plant loading and market prices In accordance with clauses 3.8.21 (a1) and (b) of the National Electricity Rules (NER) In accordance with NER clause 3.8.20 (a), Pre-dispatch must cover from the next trading interval up to and including the final trading interval of the last trading day for which all valid dispatch bids and dispatch offers have been received. Once bids and offers for the next trading day become valid after 1230 hrs EST, Pre-dispatch extends to cover that trading day. For further details see the Pre-dispatch process description, at: http://www.aemo.com.au/electricityops/140-0033.html AEMO must, under NER clause 3.13.4 (i), update and publish Pre-dispatch at least every three hours
7 February 2012 Page 4 of 17

FACTORS CONTRIBUTING TO DIFFERENCES BETWEEN DISPATCH AND PREDISPATCH OUTCOMES

dispatch solver and base case inputs, a number of spot price and interconnector flow sensitivities to pre-defined changes (scenarios) around the Pre-dispatch forecast of scheduled demand5. The functions of Pre-dispatch are to provide: AEMO and market participants with information for them to make informed decisions about power system security and reliability issues, to encourage a market response to resolving those issues ahead of any market intervention by AEMO scheduled and semi-scheduled participants and ancillary service providers with indicative forecasts of unit loading, unit enabled frequency control ancillary services (FCAS) and regional energy and FCAS market pricing information for them to make informed decisions about the operation of their plant if required, a back-up to Dispatch if the market systems fail

Both Dispatch and Pre-dispatch provide market participants with spot market information, for them to make informed decisions about the management of financial risks in the market.

Monitoring of Pre-dispatch Performance

AEMO monitors and reports on certain aspects of the performance of Pre-dispatch forecasts.

3.1 Regional Demand

AEMO compares the 12-hour ahead Pre-dispatch forecast of operational demand for a particular trading interval against the actual operational demand for that trading interval, for all trading intervals within the reporting period. Performance is measured as Mean Absolute Percentage Error and is internally reported each month.

3.2 Constraint Equation RHS

AEMO compares the right-hand-side (RHS) of constraint equations used in both Dispatch and Predispatch, for all dispatch and trading intervals respectively within the reporting period. For each constraint equation, the RHS value reported in Dispatch for a particular dispatch interval is compared against the corresponding RHS value reported in the 4-hour ahead Pre-dispatch and the latest Pre-dispatch to include the relevant trading interval. Performance is measured as the maximum RHS per-unit difference6 for each constraint equation which bound in either Dispatch or Pre-dispatch, and is reported:
5

Quarterly, to AEMOs DPRG7 (Dispatch versus latest Pre-dispatch); and Monthly, to AEMOs website8 (Dispatch versus 4-hour ahead Pre-dispatch)
AEMO must, under NER clause 3.13.4 (h), publish details of the expected sensitivity of forecast spot prices to changes in forecast load or generating unit availability. For further details see the Pre-dispatch Spot Price Sensitivities Definitions paper, at: http://www.aemo.com.au/electricityops/140-0058.html Per-unit difference = absolute ( [ Dispatch RHS minus Pre-dispatch RHS ] divided by Dispatch RHS ) AEMO only reports on constraint equations where the maximum RHS per-unit difference exceeds 10% for more than 20 dispatch intervals AEMO Monthly Constraint Reports, at: http://www.aemo.com.au/electricityops/0100-0016.html
7 February 2012 Page 5 of 17

6 7

FACTORS CONTRIBUTING TO DIFFERENCES BETWEEN DISPATCH AND PREDISPATCH OUTCOMES

Factors contributing to differences between Dispatch and Predispatch

A number of factors can contribute to differences between Dispatch and Pre-dispatch outcomes and hence affect the ability of Pre-dispatch to be considered as a forecast of Dispatch outcomes. AEMOs ability to control those factors to improve alignment between Dispatch and Pre-dispatch depends on whether the factor relates to the market design, its implementation, or is an externality such as unplanned power system outages or short-notice changes to planned outages. Whilst AEMO can largely control how it implements a particular market design (subject to commercial considerations), it has lesser control over changes to the market design itself, and little or no control over externalities. The remaining sections of this paper describe how each factor grouped into externalities, market design or implementation can contribute to differences between Dispatch and Pre-dispatch outcomes.

Externalities

Externalities such as unforeseen power system events can occur at any time and can contribute to differences between Dispatch and Pre-dispatch outcomes that cannot be addressed through either improvements to implementation or changes to the market design. An unforeseen event can affect up to six Dispatch runs before being included in a Pre-dispatch run.

5.1 Unplanned Outages

Unplanned generation or network outages can significantly distort dispatch and pricing outcomes, particularly when these outages cause constraint equations to bind in Dispatch but are yet to affect Pre-dispatch.

5.2 Short-Notice Changes to Planned Outages

Short-notice changes to a planned outage can contribute to differences between Dispatch and Predispatch outcomes during the current trading interval if the outage start or end times: are brought-forward into the current trading interval, so that the affected outage or outage pre-ramping constraint equation binds in Dispatch but not in the latest Pre-dispatch for that trading interval; or are deferred from the current trading interval, so that the affected outage constraint equation no longer binds in Dispatch, but does in the latest Pre-dispatch for that trading interval

Market Design

The design of the Dispatch and Pre-dispatch processes is largely dictated by the requirements in chapters 3 and 4 of the NER, its related operating procedures, and by the spot market operations timetable.

7 February 2012

Page 6 of 17

FACTORS CONTRIBUTING TO DIFFERENCES BETWEEN DISPATCH AND PREDISPATCH OUTCOMES

6.1 5-Minute Dispatch versus 30-Minute Pre-dispatch Resolution

Under NER clauses 3.8.21 (a1) and 3.8.20 (b), Dispatch must be to a 5-minute dispatch interval resolution and Pre-dispatch must be to a 30-minute trading interval resolution. Further, the quantities in unit energy and FCAS offers must be defined to a trading interval resolution9. This can result in differences between Dispatch and Pre-dispatch because: Dispatch outcomes are based on instantaneous forecasts10 that apply at the end of the relevant 5-minute dispatch interval, whereas Pre-dispatch outcomes are average forecasts11 that apply over the relevant half-hourly trading interval Changes to unit energy and FCAS offer quantities between successive trading intervals are not ramped in when for Dispatch transitions into the relevant trading interval. If the change is large enough, Dispatch will be less likely to be able to resolve a large change than Predispatch. This means Dispatch tends to have greater price volatility than Pre-dispatch

Note that the average of the six 5-minute Dispatch outcomes over a trading interval (such as the trading price) could be expected to converge somewhat to the corresponding Pre-dispatch outcomes for that trading interval. However an inherent bias can still exist, as the Dispatch demand forecast is for the end of the 5-minute dispatch interval whereas the Pre-dispatch demand forecast is a half-hourly average over the trading interval. The different resolutions of Dispatch and Pre-dispatch can therefore result in differences in their outcomes.

6.2 5-Minute Dispatch versus 30-Minute Pre-dispatch Frequency

Dispatch is run and published every five minutes whereas Pre-dispatch is run and published every 30 minutes on the half-hour.12 Hence Pre-dispatch is unable to capture the transient outcomes, such as rebidding, that occur in Dispatch during a particular trading interval. The different update frequencies of Dispatch and Pre-dispatch can therefore result in differences in their outcomes.

6.3 Rebidding of Unit Offers for the Current Trading Interval

Under NER clause 3.8.22 (b), participants can change (or rebid) any quantities in their unit energy or FCAS offers at any time up to actual Dispatch, except for the prices in price bands which are locked in at 1230 hrs EST the day before. The rebiddable quantities are:
9 10 11

the capacity distribution across the ten price bands unit capacity in energy offers unit ramp rates in energy offers13

12

In accordance with NER clauses 3.8.4 (a), 3.8.6 (a) and (g), 3.8.6A (b), 3.8.7 (c) and 3.8.7A (c) Because dispatch instructions for energy are treated as targets to be met by the end of the interval Because the demand forecasts input to Pre-dispatch are primarily based on demand history which consists of half-hourly averages of 4-second actual demands As required by the spot market operations timetable, available at: http://www.aemo.com.au/electricityops/108-0029.html
7 February 2012 Page 7 of 17

FACTORS CONTRIBUTING TO DIFFERENCES BETWEEN DISPATCH AND PREDISPATCH OUTCOMES

fast start inflexibility profiles in energy offers for fast start units availability, enablement limits and response breakpoints in FCAS offers unit fixed loadings in energy offers (where offered) unit mandatory restriction capacity offers (where offered)

The NER does not allow a gate-closure14 for rebidding prior to actual Dispatch, hence any late rebidding of quantities for the current trading interval is often not captured in Pre-dispatch until its next run, up to 30 minutes later. This rebidding can potentially result in significant differences between Dispatch and the latest Predispatch outcome.

6.4 Rebidding of Unit Ramp Rates for the Current Trading Interval
There are often physical limits to how much a units loading can increase or decrease from its initial loading over a certain period, called its ramp rate. Unit ramp rates are treated as inviolable and assigned the highest dispatch priority in Dispatch and Pre-dispatch. Under NER clause 3.8.22 (b), participants can also rebid the ramp rates in unit energy offers at any time up to actual Dispatch. The offered ramp rate can be as low as the minimum of 3 MW per minute or 3% of the maximum capacity of the unit15. The offered ramp rates can be changed to 0 MW per minute under certain conditions. Rebidding to lower ramp rates within the current trading interval can minimise the change in a units energy dispatch from its initial loading, effectively overriding the action of other constraints and causing Dispatch outcomes to differ significantly from Pre-dispatch outcomes.

6.5 Reporting of Power System Security and Reliability Issues

Under NER clause 3.13.4 (f), Pre-dispatch must report, among other things, any forecast supply shortfall for each region including any trading intervals for which low reserve or lack of reserve conditions are forecast to apply. This is done to encourage a market response to resolving the underlying issue before any market intervention by AEMO. Under NER clause 4.2.6 (b)(1), AEMO must take all reasonable actions to return the power system to a secure operating state as soon as it is practical to do so, and, in any event, within 30 minutes. In Pre-dispatch, these objectives are implemented by assuming that a security constraint equation cannot be violated beyond a 30-minute trading interval and instead potentially resolving the underlying issue by forecasting a supply shortfall and load shedding in the relevant region16. However, load shedding to meet a supply shortfall caused by a security constraint is not practical in real time and Dispatch resolves these issues by violating the security constraint equation for up to 30 minutes while AEMO acts to resolve the issue. This can result in significant differences between Dispatch and Pre-dispatch outcomes prior to any corrective actions.

13 14

15 16

See also section 6.4 That is, a period where energy trading is stopped before real time. For example refer to Fundamentals of Power System Economics, D. Kirschen and G. Strbac, John Wiley and Sons, 2004 In accordance with NER clause 3.8.3A (b)(1) To achieve this in Pre-dispatch, the constraint violation priority for security constraint equations are set higher than the load shedding priority
7 February 2012 Page 8 of 17

FACTORS CONTRIBUTING TO DIFFERENCES BETWEEN DISPATCH AND PREDISPATCH OUTCOMES

6.6 Non-Conformance with Dispatch Instructions

AEMO may declare a unit as non-conforming if it is not following its energy dispatch instructions within a defined tolerance and time period17. When this occurs, AEMO applies a non-conformance constraint equation in Dispatch to set the units energy dispatch target to its actual measured loading captured at the start of the relevant dispatch interval from the Supervisory Control and Data Acquisition system (SCADA). Nonconformance constraint equations are not applied in Pre-dispatch. The management of non-conformance in Dispatch using constraint equations and the impact of the non-conformance itself may result in differences between Dispatch and Pre-dispatch outcomes.

6.6.1 Use of Non-Conformance Constraint Equations

For units declared as non-conforming, AEMO applies a non-conformance constraint equation in Dispatch that sets its energy dispatch target to its initial loading. This constraint equation aims to minimise the distortion to Dispatch outcomes caused by the nonconformance, by assuming that the unit will continue to non-conform and operate at its initial loading. However in Pre-dispatch these non-conformance constraint equations are not applied, as Predispatch assumes perfect conformance with energy dispatch targets. The use of non-conformance constraint equations in Dispatch only can result in differences between Dispatch and Pre-dispatch outcomes.

6.6.2 Impact of Non-Conformance

For both Dispatch and Pre-dispatch, FCAS offer trapezium constraints18 are applied to the dispatch of energy and the enablement of the relevant FCAS only if the units initial loading is within the offered enablement limits. In Dispatch and the first trading interval of Pre-dispatch, the initial loading is the actual measured loading from SCADA. In subsequent Pre-dispatch intervals, the initial loading is the forecast energy loading calculated in the previous Pre-dispatch interval, as Pre-dispatch assumes perfect energy dispatch conformance. In Pre-dispatch, if a unit is initially operating within its FCAS enablement limits then its forecast energy loading can become trapped19 at an FCAS enablement limit for subsequent Pre-dispatch intervals unless there is participant rebidding for those periods to widen the affected FCAS enablement limits. There is no automatic un-trapping in Pre-dispatch.

17 18

19

In accordance with NER clause 3.8.23 These are explained in Guide to Ancillary Services in the National Electricity Market , at: http://www.aemo.com.au/electricityops/160-0056.html A trapped unit is one that cannot reach its prospective energy dispatch target (based on the economics of its energy offer or otherwise) as its target is constrained at either the FCAS enablement maximum or minimum limit of one of more of its FCAS offers. A unit cannot deliver FCAS if operating beyond its FCAS enablement limits. For each FCAS offer, the NEMDE solver models the trade-off between energy dispatched and FCAS enabled by creating a pair of linear constraints with zero FCAS enabled when energy is dispatched at the relevant FCAS enablement limit. However, as these energy-based FCAS enablement limits are treated as relatively inviolable and the constraints are not relaxed in order to find optimal solutions beyond them, the unit can become energy trapped
7 February 2012 Page 9 of 17

FACTORS CONTRIBUTING TO DIFFERENCES BETWEEN DISPATCH AND PREDISPATCH OUTCOMES

In Dispatch, however, the relevant participant can un-trap its units dispatch without rebidding by non-conforming to its dispatch instruction and operating slightly outside the offered FCAS enablement limits. In other cases where the unit is actually operating outside its FCAS enablement limits the unit is stranded20 from being enabled for FCAS in Pre-dispatch, until either its forecast energy loading falls within those limits or the participant rebids to narrow the FCAS enablement limits. However, in Dispatch the relevant participant might un-strand its unit without rebidding by nonconforming to its dispatch instruction and operating slightly within its FCAS enablement limits. Hence this ability to un-trap or un-strand through dispatch non-conformance can result in significant differences between Dispatch and Pre-dispatch outcomes.

Implementation

Although the Dispatch and Pre-dispatch processes both use the NEMDE software, there are a number of modelling differences between the two in terms of the pre-processing and application of inputs to NEMDE, the solver algorithm itself, and the post-processing of NEMDE outputs.

7.1 NEMDE Inputs

7.1.1 Demand Forecasts
In Dispatch, the forecast of scheduled demand at the end of a dispatch interval is automatically calculated based on the actual measured demand at the start of the dispatch interval plus a forecast demand change over that interval. In Pre-dispatch, the forecast of scheduled demand for each trading interval is largely based on historical profiles of average actual demand, as adjusted by AEMO to suit forecast conditions. In November 2011 AEMO implemented a new automatic forecasting system for regional and key sub-regional demand forecast inputs to Pre-dispatch, which will improve alignment with Dispatch in terms of forecast scheduled demands and the forecast RHS of constraint equations. However there remain other demand forecasting issues relating to unscheduled loads which can significantly impact this alignment, including: large industrial loads that typically have a step change characteristic while the amount of load is often predictable, the exact timing of load changes is not demand-side reduction in response to forecast high market prices in Pre-dispatch or to mandatory load restrictions issues with both the timing and amount load restored following interruption issues with the timing and (to a lesser extent) the amount, noting this process is co-ordinated by AEMO

7.1.2 Constraint Equation RHS Power System Quantities

In Dispatch, constraint equations formulated with a power system quantity as a RHS input automatically use the actual measurement captured from SCADA at the start of a dispatch interval to represent the forecast for the end of that dispatch interval.
20

A stranded unit is one that cannot be enabled for FCAS, based on its FCAS offer, as it is initially operating beyond its FCAS enablement limits. In this case the NEMDE solver does not create the tradeoff constraints between energy dispatched and FCAS enabled.
7 February 2012 Page 10 of 17

FACTORS CONTRIBUTING TO DIFFERENCES BETWEEN DISPATCH AND PREDISPATCH OUTCOMES

In Pre-dispatch, if the power system quantity relates to a scheduled entity21 then the actual SCADA measurement is automatically used in the first trading interval, with subsequent trading intervals using the entitys solution from the previous trading interval. However if the power system quantity relates to a non-scheduled entity22 then, instead of using the actual SCADA measurement a forecast which gets progressively worse over the Pre-dispatch timeframe AEMO would, where possible, re-formulate the constraint equation so that the entity is mapped to a related scheduled entity, although that relationship itself may be highly non-linear and sensitive to forecasting errors. These formulation differences can result in significant differences between Dispatch and Predispatch outcomes for the affected constraint equations.

7.1.3 Constraint Equation RHS Network Ratings

Transmission Network Service Providers (TNSPs) are required to provide AEMO with thermal ratings for their network equipment, which are then applied as a RHS input to the relevant network constraint equations. TNSPs are increasing their implementation of dynamic thermal ratings for their network equipment, which they calculate using real-time information such as conductor temperature, conductor sag, ambient temperature and wind speed. Such ratings are then transmitted to AEMO via SCADA. In Dispatch, constraint equations are formulated to make use of these dynamic thermal ratings, if available, as a RHS input in the same way as any other non-scheduled power system quantity. If not available, the default static thermal ratings provided by the TNSP apply. In Pre-dispatch, however, constraint equations are formulated to use a pre-defined profile of thermal ratings provided by the TNSP typically based on seasonal and time-of-day changes as NSPs do not provide dynamic thermal ratings over the Pre-dispatch timeframe based on their forecast of ambient conditions. Further, while AEMO can precisely apply temporary changes (overrides) to the thermal ratings used in Dispatch, such short-notice changes are crudely profiled over the Pre-dispatch timeframe as they simplistically apply from the first trading interval of Pre-dispatch for the number of consecutive trading intervals nominated by AEMO. Again, these differences can result in significant differences between Dispatch and Pre-dispatch outcomes for the affected constraint equations, particularly during Pre-dispatch periods where there are seasonal or time-of-day rating transitions or where short-notice rating overrides are applied.

7.1.4 Constraint Equations Pre-Ramping of Planned Network Outages

In Dispatch, AEMO applies soft and hard outage ramping constraint equations prior to, and in preparation for, a planned outage of a network element. The process aims to reduce flows through the network element to zero before its outage commences, while minimising the impact of this preparatory ramping on market price outcomes. Typically, pre-ramping commences 30 minutes before the outage nominally commences. In Pre-dispatch, only the final network outage constraint equation is applied with no pre-ramping.
21 22

Such as unit loading or interconnector flow Such as intra-regional line flows, connection point demands, voltage levels, the switched status of network equipment including capacitor banks and synchronous condensers, and the mode of control systems
7 February 2012 Page 11 of 17

FACTORS CONTRIBUTING TO DIFFERENCES BETWEEN DISPATCH AND PREDISPATCH OUTCOMES

Hence Pre-dispatch outcomes are unaffected for the trading intervals where outage ramping occurs in Dispatch. Further, in Dispatch some unexpected price outcomes might still occur at outage commencement if the ramping constraint equations which are based on Pre-dispatch forecasts are too conservative, or too relaxed. For example: a planned network outage is to commence at 1300 hrs AEMO applies an outage constraint equation in Dispatch and Pre-dispatch from 1300 hrs AEMO applies outage ramping constraint equations from 1230 hrs the outage ramping constraint equations might impact on Dispatch outcomes from dispatch interval ending 1235 hrs onwards (trading interval ending 1300 hrs) however, the earliest impact on Pre-dispatch outcomes is from trading interval ending 1330 hrs onwards, 30 minutes after the outage could potentially have affected the market.

7.1.5 Constraint Equations - Ramping of Negative Inter-Regional Settlement Residues

Negative inter-regional settlement residues can accumulate during periods of counter price flow across regulated interconnectors, which must then be paid for by the relevant TNSP in the importing region. Counter price flows are typically caused by binding or violating constraint equations. AEMO is required to control the accumulation of negative inter-regional settlement residues in Dispatch23 by invoking a negative residue management (NRM) constraint equation that ramps back the counter price flow on the affected interconnector in a controlled manner. In Pre-dispatch, however, this NRM constraint equation only applies under certain conditions, and then only for the first two trading intervals. While this allows the underlying market issue to be highlighted in Pre-dispatch in anticipation of a market response, it can also result in Pre-dispatch outcomes differing from Dispatch.

7.1.6 Intermittent Unit Generation Forecasts

AEMO is required to produce unconstrained intermittent generation forecasts for semi-scheduled generating units (primarily wind generation) for input to the Dispatch and Pre-dispatch processes24. AEMO also produces forecasts of significant non-scheduled intermittent generation and subtracts these from forecasts of operational demand before input to Pre-dispatch as scheduled demand. In Dispatch, however, significant non-scheduled intermittent generation is not explicitly forecast and a persistence forecast is assumed that is, the forecast equals the actual generation at the start of the dispatch interval. Hence the real-time variability of non-scheduled intermittent generation levels can contribute to differences between the Dispatch and Pre-dispatch outcomes. These intermittent generation forecasts, produced by the Australian Wind Energy Forecasting System (AWEFS), are inherently less accurate than the forecasts for scheduled generation that are
23 24

In accordance with NER clause 3.8.1 (b)(12) In accordance with NER clause 3.7B (a)
7 February 2012 Page 12 of 17

FACTORS CONTRIBUTING TO DIFFERENCES BETWEEN DISPATCH AND PREDISPATCH OUTCOMES

based on energy offers submitted to AEMO, with the gap potentially worsening with the increasing penetration of intermittent generation in the NEM. To the extent that the underlying forecasting models in AWEFS for Dispatch and Pre-dispatch are different, this can also result in differences in outcomes between the two processes.

7.2 NEMDE Solver

7.2.1 Basslink Interconnector No-Go Zone
Basslink is a high-voltage direct-current interconnector between Tasmania and Victoria with the capability to automatically regulate flow in order to control the relative power system frequencies in Tasmania and the mainland NEM regions. Basslink has a no-go zone (or dead band) between approximately 50 MW flow south and 50 MW flow north which enforces physical limitations on the dispatch of its flow and the enablement of FCAS. The Basslink frequency controller is unable to regulate flows and automatically blocks flow to zero while operating in the no-go zone and for at least two minutes on transition through the nogo zone. In Dispatch, two switch solver runs are automatically performed to determine whether or not to transition through the no-go zone, selecting the solution with the lower dispatch cost objective for dispatch and pricing purposes. In Pre-dispatch these solver runs are not performed since the no-go zone limitations are sub 5minute issues and the Pre-dispatch resolution is 30 minutes. This can cause significant differences in the Basslink flow targets determined in Dispatch compared to Pre-dispatch, hence impacting on generator targets and prices.

7.2.2 Fast Start Unit Commitment and Dispatch Inflexibility Profiles

Fast start units are often subject to time- and loading-based constraints on their commitment and subsequent dispatch, including lead-times for synchronising and loading to minimum load. Participants with fast start units can optionally submit, as part of their energy offer, a dispatch inflexibility profile that reflects those time- and loading-based operational constraints. In Dispatch, AEMO is required to apply the dispatch inflexibility profile constraints to the commitment and subsequent dispatch of the relevant fast start unit over the next hour25. To implement this, Dispatch automatically performs two solver runs. The initial fast start commitment run determines which off-line fast start units to commit, ignoring their offered dispatch inflexibility profiles and ramp rates. The subsequent run then applies the relevant dispatch inflexibility profile constraints and ramp rates to all fast start units (including those committed in the initial run) before solving and publishing the dispatch and pricing outcome. In situations with limited supply, the commitment of fast start units based only on the current dispatch interval outcome without considering the impact of their dispatch inflexibility profile constraints in subsequent dispatch intervals can significantly reduce the amount of spare generation that might otherwise be available in Dispatch.

25

In accordance with NER clause 3.8.19 (g)

7 February 2012 Page 13 of 17

FACTORS CONTRIBUTING TO DIFFERENCES BETWEEN DISPATCH AND PREDISPATCH OUTCOMES

In Pre-dispatch, however, AEMO is not required to take account of dispatch inflexibility profiles for fast start units26 and hence Pre-dispatch does not perform a fast start commitment run nor apply any dispatch inflexibility profile constraints27. This can cause significant differences between Dispatch and Pre-dispatch outcomes.

7.2.3 Unit Daily Energy Limits

Participants can optionally submit, as part of their energy offer, a daily energy limit to the total energy dispatched from their unit for the relevant trading day. In Pre-dispatch, the energy limit that applies is that remaining from the offered daily energy limit after subtracting the total energy dispatched by the Dispatch process from the start of the relevant trading day. The remaining energy limit then applies as a constraint on the total energy dispatched from the first Pre-dispatch interval consecutively onwards, and once the remaining energy limit is reached the forecast energy loadings for the remainder of the trading day are constrained to zero. In Dispatch, the offered daily energy limit is ignored and the unit can operate to any pattern of loading over the trading day based on offered availability and other constraints at the time. As Pre-dispatch does not attempt to optimise the allocation of energy into higher-value peak demand periods of the trading day, it might forecast that the units daily energy limit is reached much earlier than otherwise occurs in Dispatch. In practice, participants manage energy limitations by profiling their availability over the Predispatch timeframe so that significant differences between Dispatch and Pre-dispatch for this reason are rare.

7.2.4 Use of Telemetered AGC Limits in Unit Energy and FCAS Models
Larger generating units are typically equipped with automatic generation control (AGC) systems that automatically regulate unit output based on dispatch instructions from Dispatch, including responding to frequency deviations if enabled for FCAS. The amount of output regulation by AGC is subject to calculated unit ramp rates and upper and lower AGC limits, which can be adjusted by the plant operator at any time and are telemetered to AEMO via SCADA. These telemetered AGC limits are captured from SCADA prior to each Dispatch and Pre-dispatch run, with differences between each process in how these limits are applied in the calculation of energy dispatch and enabled regulation FCAS. 7.2.4.1 Unit Energy Ramp Rates

The amount that a units energy dispatch can change from its initial loading is limited by its effective ramp rate. In Dispatch, the more restrictive of the telemetered ramp rates and the ramp rates submitted in energy offers are used to determine the effective energy ramp rates applied to the calculation of unit energy dispatch. In Pre-dispatch, only the offered ramp rates are used.
26 27

In accordance with NER clause 3.8.20 (d) In any case, NER clause 3.8.19 (e)(6) requires that this process be completed within 30 minutes, which is the Pre-dispatch resolution
7 February 2012 Page 14 of 17

FACTORS CONTRIBUTING TO DIFFERENCES BETWEEN DISPATCH AND PREDISPATCH OUTCOMES

7.2.4.2

Unit Joint Energy and Regulation FCAS Ramping Constraints

The amount that a units energy dispatch plus enabled regulation FCAS raise can increase from its initial loading is limited by its telemetered AGC ramp up rate. Conversely, the amount that a units energy dispatch plus enabled regulation FCAS lower can decrease from its initial loading is limited by its telemetered AGC ramp down rate. In Dispatch, these are implemented as joint energy and regulation FCAS ramping constraints. In Pre-dispatch, however, joint energy and regulation FCAS ramping constraints are not modelled. 7.2.4.3 Unit Joint Energy and Regulation FCAS Capacity Constraints

A units energy dispatch and regulation FCAS is jointly constrained to within the effective enablement limits for that regulation FCAS. These limits are implemented as unit joint energy and regulation FCAS capacity constraints. In Dispatch, the more restrictive of the telemetered AGC limits and the corresponding enablement limits submitted in FCAS offers are used to determine the effective enablement limits for the joint energy and regulation FCAS capacity constraints. In Pre-dispatch, only the offered enablement limits are used in the joint energy and regulation FCAS capacity constraints. Hence a units energy dispatch can be trapped at one of these telemetered AGC limits in Dispatch, but not in Pre-dispatch. 7.2.4.4 Unit Regulation FCAS Offers

In Dispatch and the first trading interval of Pre-dispatch, regulation FCAS offers are only activated if the AGC system is turned on, as indicated by the telemetered AGC status. In subsequent Pre-dispatch intervals, regulation FCAS offers are activated even if the AGC system is initially turned off, on the assumption that the AGC would be turned on if the unit were enabled for regulation FCAS. 7.2.4.5 Unit Regulation FCAS Availability

A units enabled regulation FCAS is limited to the effective availability for that regulation FCAS. In Dispatch, the more restrictive of the telemetered AGC ramp up rate and the availability submitted in the regulation FCAS raise offer is used to determine the effective availability for regulation FCAS raise. Conversely, the more restrictive of the telemetered AGC ramp down rate and the availability submitted in the regulation FCAS lower offer is used to determine the effective availability limit for regulation FCAS lower. In Pre-dispatch, only the offered FCAS availability limits are used. Hence a units effective regulation FCAS availability limits, and its enabled regulation FCAS, can be lower in Dispatch than in Pre-dispatch.

7.3 NEMDE Outputs

Dispatch is subject to several market pricing re-runs, triggered under specific conditions, before publication of the final market prices.
7 February 2012 Page 15 of 17

FACTORS CONTRIBUTING TO DIFFERENCES BETWEEN DISPATCH AND PREDISPATCH OUTCOMES

However, with the exception of intervention pricing, no market pricing re-runs are performed in Predispatch.

7.3.1 Over-Constrained Dispatch Pricing

AEMO is required to relax of power system constraints in order to resolve otherwise infeasible dispatch solutions28, which sometimes results in over-constrained dispatch (OCD) pricing. When OCD pricing conditions are detected in the dispatch solution, OCD re-runs of the Dispatch process are performed29 to relax violating constraint equations and remove any violation cost components from the market prices before publication. Pre-dispatch does not perform OCD re-runs, and hence Pre-dispatch prices can significantly differ from Dispatch prices.

7.3.2 Market Price Cap Override Pricing

If there is insufficient supply to meet demand in a region, AEMO can issue an instruction to involuntarily shed load in that region and delay restoration of that load until there is sufficient supply. In Dispatch, AEMO is required to set the energy price for that region to the Market Price Cap (MPC) for the dispatch intervals to which that instruction applies30. This MPC override is removed when AEMO gives the instruction to restore the final amount of shed load in that region. In Pre-dispatch this MPC override does not apply, hence the Dispatch and Pre-dispatch pricing outcomes will differ until the next Pre-dispatch run, and might continue to differ where the underlying supply shortfall (and hence pricing) is not accurately reflected in subsequent Predispatch runs.

7.3.3 Administered Pricing

AEMO must declare an administered price period in a region31 for the remainder of a trading day if, for that region: the sum of the uncapped spot prices exceeds the cumulative price threshold over the previous 336 trading intervals, or the sum of the uncapped prices for a particular FCAS exceeds six times the cumulative price threshold over the previous 2016 dispatch intervals

In Dispatch, during an administered price period triggered by spot price exceedence, an administered price cap (APC) and an administered floor price is applied to the energy and all FCAS prices for the relevant region. If the administered price period is triggered by FCAS price exceedence, an APC is applied to all FCAS prices only. In Pre-dispatch this administered price capping and flooring does not apply, hence the Predispatch schedule will reflect the uncapped energy and FCAS prices.

28 29 30 31

In accordance with NER clause 3.8.1 (c) Both automatically and, if required, manually by AEMO In accordance with NER clause 3.9.2 (e) In accordance with NER clause 3.14.2
7 February 2012 Page 16 of 17

FACTORS CONTRIBUTING TO DIFFERENCES BETWEEN DISPATCH AND PREDISPATCH OUTCOMES

7.3.4 Mandatory Load Restriction Pricing

If there is insufficient supply to meet demand in a region, and the relevant jurisdiction has declared mandatory load restrictions to address the shortfall, AEMO is required to correctly reflect the energy pricing that would occur had mandatory load restrictions not been declared and the forecast demand was higher than it actually is. In Dispatch, AEMO is required to implement this by using its forecast of the restricted demand, but re-pricing to the MPC sufficient available capacity in energy offers to match the amount of mandatory load restriction forecast by AEMO32. AEMO implements this in a similar way in Pre-dispatch, however there is a transitionary period between initial publication of the mandatory load restriction schedule and the use of the mandatory load restriction offers where Pre-dispatch unit loadings will not be accurate compared with Dispatch, as Pre-dispatch attempts to dispatch units to meet the higher unrestricted demand forecast rather than the restricted demand forecast that is closer to the actual demand.

32

In accordance with NER clause 3.12A.6

7 February 2012 Page 17 of 17