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ICF International relies on its state-of-the-art analytics,
regulatory understanding, and market knowledge to help
clients make educated decisions concerning transmission
risks, financial transmission rights (FTR), and hedging
strategies. Our analyses have helped our clients mitigate
congestion and lower wholesale power costs―saving
billions of dollars for power companies, power marketers,
and consumers.
Congestion and Locational Marginal Pricing (LMP) Forecasts
Locational
Marginal Price Forecast. ICF International forecasted
locational marginal prices (LMP) and transmission congestion
for Midwest Independent System Operator (MISO) DAY 2 operation
in the New England market to support a client's dispatch
decisions for generation asset, design of structured
energy products, and financial transmission rights (FTR).
ICF International used GE-MAPs™ to
perform a detailed modeling of the New England market within
the context of the larger Northeast markets by modeling all
the physical transmission facilities, economic generation
injections, and hourly nodal loads. The analyses provided
forecasts of LMPs at each node, load zone, and the New England
trading hub, as well as hourly congestion across all transmission
lines and interfaces. Our analysis was used by the client's
team to support trading positions with other counter parties
and to procure FTRs to hedge potential congestion costs associated
with the client's energy delivery obligations in the New
England market.
Financial Transmission Rights (FTR) Strategy Design
Transmission Congestion Assessment. ICF International assisted a large generation and transmission company
in the Mid-American Power Pool (MAPP) region with an assessment
of the MAPP/MISO market for Midwest Independent System Operator
(MISO) DAY 2 operation with a three-year forecast of locational
marginal prices (LMPs) and transmission congestion. We then
designed a FTR strategy to
nominate candidate FTRs for client operations to hedge congestion
costs. For each of the client transactions, the FTR design
provided information on the following:
- What are the expected congestion costs from point-to-point
(PTP) energy transactions, and network resources to network
load?
- What are the expected negative congestion revenues?
- What
are the expected equivalent FTR revenues, and are there
any seasonal patterns?
- What is the expected equivalent FTR risk
exposure?
- Should the client hold FTRs?
- Should the FTRs be annual, seasonal,
or monthly?
Transmission Risk Exposure Assessment. ICF International assisted in managing a clients’ operational
risk and flexibility in transmission in the mid-Atlantic
market. We estimated the transmission risk exposure
on all the major bulk power transmission facilities, the estimated
duration of hours of congestion on each transmission
line link, and the optimal value and type of FTR needed to hedge transmission
price risk for physical transactions and for supporting trading
positions.
Regulatory
and Regional Transmission Organization (RTO) Cost-Benefit
Assessments
Cost Benefit Analysis of Proposed Regional Transmission
Organization (RTO) Structure. For the Federal Energy
Commission, ICF International addressed the question of how
large regional transmission organizations would impact the
power markets in the United States in a cost-benefit analysis
of the proposed Federal Energy Regulatory Commission (FERC)
Regional Transmission Organization RTO structure. The RTO
framework proposes to establish consistent and effective
market rules governing transmission systems and power markets
over a large area. ICF International first developed a base
case that characterized current utility dispatch, planning,
and other industry conditions important for analyzing the
economic impacts of the RTO proposal. This base case reflected
the "no action" alternative to the proposal,
i.e., that of status quo implementation of Order 888 by the
commission. Further, ICF International analyzed the impact of
several alternate situations under the proposed RTO structure
in a series of policy cases. The policy scenarios examined
three main types of economic benefits that the commission
expects RTOs to deliver: transmission improvements, generator
improvements, and demand response to electric price signals.
Prior to this analysis, ICF International developed the analysis
design, conducted the air quality modeling, and prepared
the economic modeling Draft and Final EIS documents for FERC’s
wholesale transmission open access final rule (Order 888).
ICF International also assisted in the responses to public comments.
Inter-Regional Transmission Capacity
Forecasts
Power Imports into the Tucson, Arizona, Area. ICF International modeled the Arizona power market to determine
the limits on power imports into the Tucson area for a major
power developer. The analysis involved an economic dispatch
of power plants while enforcing transmission line and nodal
voltage constraints. ICF International determined the rate of
increase in imports with increases in local power generation,
and the net benefits to the system due to the addition of
new lines and substations.
System Impact and Stability Studies
Generation Dispatch Analysis
in the Phoenix, Arizona, Area. For two developers
of a major power generation project in the greater Phoenix
area, ICF International provided a range of services, including:
evaluating how the project would likely be dispatched in
the Western Electric Coordinating Counsel (WECC) and the
local market, given other existing capacity and significant
amounts of new capacity coming on line, assessing impacts
on the plant of "contingencies" in
which certain regional generating stations and transmission
lines became unavailable, and analyzing the impact of the
potential addition of a new transmission line that would
enhance the project's ability to sell power to more distant
wholesale customers. We helped prepare
presentations for management, state regulators, and other
stakeholders in the relevant markets based on our analysis.
Marketing Strategy for Underground
Transmission, Pan-European Energy Industry Association. ICF International is advising a European energy association with
member companies in the transmission sector. Our advice
is helping the association position itself to take commercial
advantage of the opportunities presented by the confluence
of several European directives: efforts to reduce carbon
emissions, promote renewable energy projects, and accelerate
efforts to create a liberalized and inter-connected European
electricity market. Read ICF International's report to the
European Commission, Undergrounding
Electricity Lines in Europe.
Optimal Power Flow Analysis and Siting
Reliability Must Run (RMR) Assessment. ICF International performed an independent assessment to estimate
the economic RMR requirements for a load pocket in the
WECC market
for an independent power producer. We identified the
maximum economic RMR requirements from utility generators
in the load pocket.
Siting Analysis. ICF International identified
suitable sites to build a 500 MW combined-cycle generation
unit for a client entering the Wisconsin power market. The
study considered potential risk factors such as demand growth,
existing installed capability, transmission adequacy, voltage
support, and transmission congestion issues that could affect
the deliverability of megawatts.
Optimal Power Flow Simulation. ICF International
performed an optimal power flow simulation of the WECC market
to determine dispatch scenarios for a large power plant in
the Palo Verde, Arizona, region. The work included the economic
dispatch of units, contingency analysis, and snapshots of
expected summer peak nodal prices. This analysis demonstrated
the capability of the transmission system to deliver power
to market with all transmission facilities in service and
under various contingency scenarios.
Value of Reactive Power. ICF International
estimated the market value of supplying reactive power from
a portfolio of units to maintain flowgate capacities between
two regional markets in the mid-Atlantic region. The study
estimated the target portfolio’s leverage
to keep the flowgate open between the regions and convert
the leverage into value.
Site Assessment Due Diligence. ICF International
helped a client enter the Wisconsin power market by employing
our transmission modeling
expertise to identify suitable
sites to build a combined-cycle generation unit. In recommending
potential locations for the client, the study considered
potential risk factors, such as demand, existing installed
capability, transmission adequacy, voltage support, and transmission
congestion issues on the deliverability of megawatts while
providing the necessary initial due
diligence efforts to
support further project review.
Evaluating Terrorist Threats Against
Energy Transmission Systems. ICF International recently
conducted a joint public- and private-sector exercise focusing
on terrorist threats to electric power transmission systems
for a federal client. Designed to test existing plans and
educate key personnel on new threats and vulnerabilities,
this exercise tested the capabilities of state, local,
and private-sector organizations to jointly respond to
an attack. We also analyzed the transmission load flow
under multiple scenarios to evaluate potential contingencies
and identify critical points of concern on the transmission
network.
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