Last Update: 01/31/2020
Below, affected ISO customers can learn more about changes to existing systems or procedures related to the Energy Market Opportunity Cost project. This project is one of several that ISO New England has undertaken, in collaboration with stakeholders, for the continued development of the region’s wholesale electricity markets.
See Participant Readiness Project Outlook for more detail on specifically affected customers and systems for this and other major projects.
Under the EMOC project, ISO New England aimed to enhance the ability of economic commitment and dispatch to make the most cost-effective use of limited fuel supplies during stressed operating conditions. This was accomplished by estimating an opportunity cost for oil-fired and dual-fuel generators with short-term fuel supply limitations, incorporating the cost into reference prices, and made available to participants to include in their energy offers.
The opportunity cost calculation is the net revenue a resource would lose if its limited fuel supply was reduced by 1 MWh of possible generation based on its initial fuel supply over a rolling seven-day horizon. The opportunity cost is greater than zero when the available fuel supply is insufficient to allow the resource to operate at EcoMax in all forecasted profitable periods. Alternatively, if the available fuel supply is sufficient to operate at EcoMax in all profitable periods the opportunity cost will be zero because net revenue would not be improved by an increase in the available fuel supply during the seven-day horizon.
Inputs that ISO New England employed to estimate opportunity costs for oil and dual fuel generators include:
The daily estimated opportunity cost value is visible to participants via the Customer and Asset Management System (CAMS) Internal Market Monitor Asset Characteristics (IMMAC) module prior to the close of the day-ahead offer submission window, and it is included in a generator’s reference price as determined by IMM. Participants are encouraged, but not required, to include opportunity costs in their hourly offers as part of an offer strategy to maximize a generator’s net revenue over the course of the day. Including appropriate opportunity costs in offers helps to preserve limited fuel supplies for use during system conditions and corresponding higher prices when it is most valuable and best contributes to system reliability and cost-effectiveness.
The EMOC project:
Phase 1 (November 29, 2018): Provided market participants with an estimated daily opportunity cost for use in energy market offer formulation via the Internal Market Monitor Asset Characteristics (IMMAC) module within the Customer and Asset Management System (CAMS).
Phase 2 (December 3, 2019): Added a real-time market opportunity cost calculation and now reports the Massachusetts Greenhouse Gas Initiative value separately from the calculated opportunity cost in the IMMAC module.
Affected market participants were required to take specific steps or adapt to changes in ISO systems as described below and should be mindful of the following time-bound items, some of which may require customers to take specific steps or adapt to changes in ISO systems both before and after the project implementation date.
Please consider subscribing to Participant Readiness, Market Notices, Information Technology (IT) Notices, and MIS Report Issues to receive notices posted to the ISO calendar for future projects.
| TIMING OR DEADLINE | SYSTEM | ACTION OR EVENT |
|---|---|---|
|
12/3/2019 |
CAMS |
Carbon Permit Price, Calculated Opportunity Cost, and Calculated Opportunity Cost Timestamp fields added to the IMMAC module for oil and dual-fuel units and populated by 7:00 PM |
|
12/3/2019 |
eMarket |
The real-time reoffer period in eMarket will open by 8:00 PM |
|
11/29/2018 |
CAMS |
Estimated opportunity cost value available in IMMAC module and incorporated into reference prices for oil and dual-fuel units |
The ISO conducted online training for affected customers to learn about changes and ask questions in advance of project implementation. Please consider subscribing to ISO Training to receive notices posted to the ISO calendar for this project.
| DATE | EVENT AND SUPPORTING MATERIALS |
|---|---|
| November 13, 2018 |
Energy Market Opportunity Cost (EMOC) Webinar – How to use opportunity costs in preparing energy market offers for oil and dual-fuel generators |
|
Available now |
Internal Market Monitor Asset Characteristics UI Presentation – How to use the IMMAC user interface for viewing asset parameters and initiating changes |
Please also see the following frequently asked questions (FAQs):
Market participants affected by the project were provided the following documents for specific instructions on completing related tasks or processes.
| DOCUMENT | NOTES (if necessary) |
|---|---|
| eMarket User Guide |
Describes how to use the eMarket user interface to perform market operations |
See more on the Wholesale Markets Project Plan page
