Annex 3: Adequacy power (methodology S.D. N°62 modified by S.D. N°42)

The objective of this section is to show the stages of the process to determine the remuneration of the participants of the power balance. This remuneration is associated with the capacity market (or power market).

In the capacity market, power transfers are made between generators, valued at the short-term node price of the power of each bus. These transfers are determined from the generation capacity compatible with the adequacy and the existing peak demand commitments assigned to each generator.

The participants in the power balance (generators that do not exclude themselves from participating in power transfers[3]) must be in a position to meet their commitments for peak demand[4], considering their own adequacy power and that acquired from other generating companies.

State-of-the-art demand commitment

The Coordinator carries out a record of the average power consumption in each hour of the customers of the participants in the power balance, using this record the customer’s equivalent peak demand (DdPE) is obtained. Which will be calculated as the average of the 52 maximum physical records observed during the control period. Which begins at 6:00 p.m. and ends at 10:00 p.m. on the days between April 1 and September 30. However, this period was reduced in 2019, considering only the days of June and July for the years 2020 and 2021.

To calculate the hourly power withdrawal assigned to each customer, the Coordinator must multiply the customer’s DdPE by a single factor, in such a way that the sum of all DdPE equals the peak demand of the system.

RPi= FactorP*DdPEi

Being:

Where FactorP is systemic and will be calculated as:

FactorP=Demanda de Punta / Sumi (DdPEi)

The generator that has entered into a contract to supply power to a client will assume the power withdrawals from said client, as a commitment to the peak demand of the system.

Generation capacity compatible with sufficiency

Each generating unit is assigned an adequacy power depending on the uncertainty associated with the availability of the input of generation that is used and the unavailability of the unit and the installations that interconnect to grid, characterized by the initial power and the preliminary adequacy power, respectively. The general scheme of the procedure of calculation of adequacy power that establishes the S.D. N°62 is illustrated in Figure 3.

The following describes each of the stages and concepts used in the calculation process:

Initial Power of NCRE Centrals

Each generating unit is assigned an initial power, less than or equal to its maximum power. which will characterize the power that each unit can contribute to the system based on the uncertainty associated with the availability of the generation input that it uses.

For this, the Coordinator uses statistical information on the primary input provided by each owner. In the case of solar thermal power plants, the primary input will correspond to the stored fluid for the thermal process.

The initial power of thermal NCRE plants (such as biomass, geothermal, thermosolar and biogas) and hydroelectric will be determined according to the same procedures of conventional thermal and hydroelectric plants respectively. For all other generation technologies classified NCRE, such as wind and solar plants, the initial power will be determined according to the value resulting from multiplying its maximum power by the minimum of the following values:

• Lower annual plant factor of the last 5 years prior to the year of calculation.
• Simple average of the plant factors recorded for each of the 52 highest hourly values ​​of the annual load curve of each system or subsystem for the year of calculation.

In the case of NCRE plants that have an energy storage component, the initial power must adequately recognize the contribution to the adequacy of said units in relation to their temporary energy management capacity.

Initial power hydroelectric plants

For hydroelectric power plants, the inflow statistics corresponding to the average of the two hydrological years with the lowest inflow energy of the available statistics is used. To this end, the regulation (S.D. N°62 of 2006) classifies hydraulic power plants according to their regulation capacity into: plants with daily or higher regulation capacity, plants with intra-daily regulation capacity and plants without regulation capacity[5]. In addition, it distinguishes the hydraulic power plants in series:

• Generating units belonging to plants with daily regulation capacity or higher are considered an initial energy equal to the average of the energy stored on April 1, during the last 20 years, including the year of calculation.
• Generating units with intra-day regulation capacity are considered their regulation capacity, but the initial energy is not considered.
• The initial power of the units without regulation capacity is determined as a function of the power equivalent to the annual average generable flow of the 2 hydrological conditions with the lowest inflow energy.

The calculation methodology for plants with regulation capacity is carried out by means of a procedure that seeks to distribute the total hydraulic adjustable energy of the system following a filling of the annual load duration curve. This, respecting the models of the hydrographic basins. The combined initial power (regulation power) obtained at the hour of greatest demand is assigned to the plants with regulation capacity in proportion to the annual regulation energy supplied to the system.

Initial power solar and wind power plants

The initial power will be determined according to:

Pini= Pmax* Min(minFP5años, PromFP)

Where:

Initial Power NCRE Thermal power plants

It is determined based on the lowest average annual availability observed for the main input for the last 5 years prior to the year of calculation. If the plant demonstrates operating capacity with an alternative input, then the sufficiency power will be calculated as an equivalent generating unit based on the operating characteristics that each unit has with the main and alternative input.

Pini= PmaxIP* DIP + PmaxIA* (1-DIP)

Where:

Preliminary Adequacy Power

For the calculation of the preliminary adequacy power, the probabilistic model determined by the Coordinator will be used, which must consider for each generating unit its : initial power, unavailability, maintenance period and own consumption.

In addition, the Coordinator must keep a statistical control of the operating states of the generating units, which are grouped into:

1. Available States: when the unit is available for dispatch by the Coordinator without presenting a limitation in its maximum power;
2. Unavailable States: when the unit is not available to be dispatched by the Coordinator;y
3. Impaired States: when its maximum power is limited as a result of restrictions independent of the availability of its generation input.

The equivalent power of a unit will be obtained from the weighted average of the deteriorated states and available states.

PEi= Sum(Potk* tk)/ T

Where:

In the case of units that have accumulated statistical information on deteriorated states, to determine the preliminary adequacy power, the initial power of said units will be calculated as the minimum value between the determined initial power and the equivalent power.

The initial power must be reduced by a factor proportional to its own consumption, in such a way that:

Potencia inicial= Min(Potencia inicial, Potencia equivalente)

In the event that the consumptions are not exclusively dedicated to the auxiliary services of a generating unit, they must be considered as a power withdrawal and therefore must be recognized by the corresponding company.

Potencia inicial= Potencia inicial * Consumos propios/ Potencia bruta máxima

The resulting value of preliminary adequacy power will be reduced by a factor proportional to the longer maintenance period. This major maintenance, whether partial or total, may be carried out at any period of the year and will not affect the forced unavailability of the generating unit, as long as they are carried out within the terms established in the current major maintenance program.

Potencia inicial= Potencia inicial * (1 – HM/HT)

Where HM are the total maintenance hours and, HT the total hours of the calculation year.

Forced unavailability will be calculated based on the time that the generating unit was in operation and the time that the generating unit was unavailable, for a rolling window of 5 consecutive years, during all hours of each year.

The forced unavailability will be determined from the following quotient:

IFOR= Toff/ (Ton+Toff)

Where:

The Coordinator must determine the adequacy power of each unit, for this purpose he considers the forced unavailability and the initial power of each reduced generating unit.

PSPi= (1/ (1-LOLPdm)* Pini* (1-IFORi)* Pb(P´sis> Dpunta-Pinii)

Where:

Final Adequacy Power

The final adequacy power of each unit will correspond to the preliminary sufficiency power previously obtained, scaled by a single factor. in such a way that the sum of the final sufficiency power of all the units is equal to the peak demand of the system.

PSDi= (Dpunta/ Sum[par-k] (PSPk))* PSPi

Where:

Valued balance of injections and withdrawals of power

In each transfer bar, the power injections and withdrawals of each participant from the power balance are determined, which are valued at the Short-Term Power Node Price (PNCPP) of the respective bar.

In order to obtain the PNCPP, the CNE will determine the basic price of peak power, which will correspond to the annual marginal cost of increasing the installed capacity of the electrical system considering the most economical generating units, determined to supply additional power during business hours. Maximum annual demand of the electrical system increased by a percentage equal to the Theoretical Power Reserve Margin (MRPT) of the electrical system.

The MRPT will correspond to the minimum over-equipment in generation capacity that allows supplying the peak power in a system with a determined adequacy. Said margin is calculated from the power margin, which will be calculated as the quotient between the sum of the initial power of all the units in the system and the peak demand of said system.

Margen de potencia= Sum[n-i]* Pinii/ Dpunta

In the event that the reserve margin is greater than 1.25, the theoretical reserve margin will be equal to 10%. Otherwise, the theoretical reserve margin will be calculated with the following equation:

Margen de potencia teórico= 0,15 – 0,2 * (Margen de potencia -1)

For each of the substations of the electrical system, a power penalty factor is calculated which, multiplied by the Basic Price of Peak Power (PBPP) determines the PNCPP in the respective substation.

PCNPPbarra= PBPP* Factor de penalización barra

For each participant in the power balance, all the valued injections and withdrawals of power are added algebraically (positive sign for injections and negative for withdrawals). The resulting value with its sign will constitute the net balance of each participant in the power balance.

Companies with a negative net balance will pay said amount in twelve monthly installments during the year to which it corresponds, to all companies that have a positive net balance in the proportion in which each of the latter participates in the total positive net balance.

The valuation of power transfers must make explicit the respective income for sections that are generated by such transfers in favor of the respective owners of the transmission system facilities, as appropriate.