The Day-Ahead Energy Market (day-ahead market) is a financial market where market participants purchase and sell electric energy at financially binding day-ahead prices for the following day. This market is the financially binding schedule of commitments for the purchase and sale of energy the ISO develops each day according to the bid and offer data that market participants submit to the market. A supply offer or a demand bid will generally clear the day-ahead market if its associated price is less than or equal to the hourly locational marginal price (LMP) at its location, as system conditions allow.
The day-ahead market allows buyers and sellers to hedge against price volatility in the Real Time Energy Market by locking in energy prices before the operating day.
The ISO uses the least-cost security-constrained economic energy-dispatch model to dispatch generators and demand-response resources (DRRs). The model considers many variables, including generation offers, system demands and the impacts of congestion on the LMP.
The unit commitment takes into account all the costs of producing the energy, including no-load costs and start-up costs. At the same time, it respects each resource’s characteristics, such as minimum run time and minimum down time. The parameters used in the unit commitment are as follows:
The hourly clearing in the day-ahead market uses a resource’s hours of commitment for real time, but the real-time dispatch of capability above a generator’s ecomin up to its ecomax is based on economics to maintain a fair and reasonable marketplace while maintaining a reliable system, and not on the amounts cleared in the day ahead. Participants have the option of declaring a self-schedule to ensure a minimum level of operation in amounts they cleared in the day-ahead market.
The day-ahead market commits resources with the goal of minimizing total production costs for the New England Balancing Authority Area. While tying the resulting LMPs and the unit offers to the day-ahead LMPs is often possible, implying that a unit should be committed in any given hour the day-ahead LMP is greater than the unit’s offer price is not correct. A unit may not be committed for a number of reasons. For example, its start-up and no-load costs could lead to an increase in its total production costs. Also, the resource may have been in merit for a few of the hours, but its commitment for its minimum run time may have caused its total production costs to increase and for it to be out of merit for additional hours. Additionally, committing the unit could have aggravated a transmission constraint and increased total production costs.
Self-schedules are always committed at their ecomin and dispatched up to their ecomax if economical. (Review the unit in eMarket application—Bids and Offers, located in the tab titled “Generation”).
In this case, the participant changed its ecomin and ecomax to 575 MW in the eMarket “Schedule Detail.” But the Hourly Updates page always has precedence over the Schedule Detail page; thus, the 1,000-megawatt ecomin in the hourly updates took precedence over the 575 MW ecomin and ecomax logged in the Schedule Detail page.
Note: The eMarket hierarchy for generation ALWAYS checks the hourly updates first. If nothing is there, it defaults to schedule detail, and if nothing is there, it defaults to unit manager.
Reference: eMarket Users Guide
The dispatching software committed the unit because of reliability issues.
A participant can only delete the schedules it has selected for use in the day-ahead market after 15 days of its last day-ahead selection.
Demand schedules for dispatchable loads are only used in the day-ahead market for establishing a day-ahead financial commitment at that asset’s node. These schedules are not used in real-time operation. To ensure that a dispatchable load scheduled in the day-ahead market will run, it must be self-scheduled in the real-time (balancing) market.
A generator committed economically by the day-ahead market dispatch software can clear to a value no greater than the larger of either 1) 60 X MRR (the manual response rate) or 2) the ecomin.
If a participant transacting an IBT selects “Contract Only,” using the “Internal Transactions” tab on the SMD Applications home page, the counterparty only needs to confirm the transaction data/contract "skeleton", not the schedule.
The timeline for internal bilateral transactions is as follows:
Also see FAQs: Real-Time Energy Market.
The ISO determines and schedules operating-reserve requirements for the Day-Ahead Energy Market using the same procedures as those used for determining and scheduling these requirements in the Real-Time Energy Market. The requirements and schedules are based on ISO New England Operating Procedure 8 and ISO New England Operating Procedure 19 reliability criteria.
A non-dispatchable asset can offer in the Day-Ahead Energy Market, which will be settled at the nodal price.
Reference: ISO NE Operating Procedure (OP) 14
Current Hub pnodes can be viewed in the Hourly Day-Ahead LMPs report. See the Location Name column, and look for locations with “HC.” at the beginning of the name.