NYISO Market Participants’ Data Need

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This is the Part Two of Three in our series on the NYISO market. In the Part One, titled ‘The Need for Enterprise Data Management in the NYISO’, Ian gave an operational overview of NYISO as an independent system operator. In today’s blog, we’ll take a look at different products and reports available in NYISO and provide a quick preview of what types of analyses can be developed with this data.

One of the purposes and responsibilities of the NYISO is to administer and monitor New York’s wholesale electricity markets, which average $7.5billion annually and engages 300 market participants (MPs) in daily and hourly auctions (NYISO). NYISO is responsible for the efficient administration of the following markets:

  • Energy Market
    • Day-ahead (DA)
    • Hour-ahead (HA)
    • Real-time (RT)
  • Capacity Market
  • Financial Markets
  • Ancillary Services Market

Let’s take a closer look at each market in depth.

Energy Market

The NYISO runs day-ahead, hour-ahead and real-time market for electricity trade and publishes data for each type of trade to make the electricity market efficient and competitive. For each of the previously stated markets NYISO publishes pricing and load data. The number of trades in each of these markets results in the creation of millions of data points, making a professional data management an indispensable function for all the market participants.

Capacity Market

NYISO has the mandate to ensure that reliable and non-interrupted power is delivered to its customers. In order to facilitate reliable electricity to consumers, NYISO runs a capacity market. The capacity market matches electricity buyers and sellers, who need to comply with their mandated locational capacity and demand response requirements. NYISO publishes a slew of data reports, such as load forecast, all-time peak load, capacity margin, and more to help market participants make better buying decisions.

Financial Markets

The financial market is very important to increase liquidity and to improve market efficiency. At NYISO, Transmission Congestion Contracts (TCCs) and Virtuals are two broad instruments to participate in New York’s energy market. TCCs act as investment option as well as a hedge against future congestion costs. Similarly, virtuals allows market participants to buy power at the day-ahead price and then resell it back at the real-time price without having actually produced or taking delivery of the power.

Ancillary Market

Reserves and regulation are the two types of the ancillary market administered by NYISO. Reserves ensure the fast ramping of power in the event of a unit or line trip. The regulation market essentially functions as the reliability factor in the power system at NYISO. The regulating resources adjust their output/consumption in response to constantly changing load conditions.  The ancillary market generates a big amount of data for spinning reserves and regulating sources for each zone at NYISO. The ancillary services data reports are published for real-time, hourly, and daily granularities.

Data Pool Creation

As a result of operations at all of the above markets, a big pool of data is created every day for each market participant to assimilate in order to make its participation financially justified.

NYISO market participants also need to stay connected to oil and natural gas markets, especially when the NYISO’s generation mix has a big oil and gas component.

Figure 1: NYISO’s generation mix. (Source: NYISO)

As we can see in Figure 1 above, gas is the largest slice of the NYISO generation mix pie. As a result, fluctuations in gas prices usually have a direct impact on power prices.  The highly positive correlation between natural gas price traded at Transco Zone-6 and the New York City day-ahead electricity price signifies the need to examine natural gas markets by the NYISO market participants.

Figure 2: NYC Day Ahead NG Prices vs. Day Ahead LBMP. | Data Source: NYISO & ICE

Similarly, the real-time LBMP shows an inverse relationship with temperature (for example, the LBMP increase with decrease in temperature, resulting from increased energy consumption on colder days and vice versa).

Figure 3: Real Time LBMP vs. Temperature. | Data Source: NYISO & NOAA

Join our webinar ‘NYISO: Data for Effective Trading and Analysis’ on October 30 to learn more about NYISO region and ZEMA the enterprise management solution. And stay tuned for Part Three in this series!

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