Marblehead Xf has been one of the top day-ahead and real-time MISO constraints this year. What you might not know is that some transmission outages caused dramatic changes in shift factors for this constraint. Our product, Panorama, uses topology-based shift factors to accompany our other market-leading congestion tools. Why does this matter? Identifying these changes ahead of time can give you an edge on the market.
To illustrate the importance of having accurate shift factors, we’ve taken a snapshot from our Price Decomposition module for the AMMO.HANN_1.AZ pnode. The middle section (blue line) shows the hourly day-ahead LMPs, while the bottom section displays the individual day-ahead constraint impacts. Within the bottom section, Marblehead’s impact can be seen in the shaded green areas. You can quickly identify three distinct periods. In the first period (yellow box), Marblehead’s impact is slightly positive; in the second (red box), it flips to negative; and in the third (green box), it’s back to positive at a much greater magnitude.
While this is a great postmortem tool, we can also use our product to predict future shift factors. The image below shows what you would see if you looked at the Marblehead constraint on the first day of the April auction (March 15). The top section shows shift factor using the actual transmission outages on March 15, while the bottom section shows exposure for the upcoming month using the planned transmission outages as of the same day.
To quantify the financial implications of the shift factor change, we evaluated one of the previous top paths and compared it to the April top path using Panorama shift factors.
Source
Sink
ON P/L
OFF P/L
Previous top path
AMMO.PENOCTG1
AMIL.MRDSA.ARR
$4,231
$974
Panorama top path
AMMO.PENOCTG1
AMMO.HANN_1.AZ
$19,917
$10,647
Change in sinks
AMIL.MRDSA.ARR
AMMO.HANN_1.AZ
$15,687
$9,672
Assuming you bought in the April prompt auction, the Panorama top path would have resulted in a gain of almost $20,000 per megawatt (on peak), more than $15,000 higher than using the March top sink.
Maybe you weren’t directly impacted by this change but would like to be better prepared in the future for similar situations. If so, please fill out the form below and one of our specialists will get in touch with you.
The post Why Shift Factors Matter – Marblehead Congestion first appeared on Enverus.
Stuart Turley is President and CEO of Sandstone Group, a top energy data, and finance consultancy working with companies all throughout the energy value chain. Sandstone helps both small and large-cap energy companies to develop customized applications and manage data workflows/integration throughout the entire business. With experience in implementing enterprise networks, supercomputers, and cellular tower solutions, Sandstone has become a trusted source and advisor in this space. Stuart has led the “Total Corporate Digital Integration” platform at Sandstone and works with Sandstone clients to help integrate all aspects of modern digital business. He is also the Executive Publisher of www.energynewsbeat.com, the best source for 24/7 energy news coverage and is the Co-Host of the energy news video and Podcast Energy News Beat.
Stuart is on Board Member of ASN Productions, DI Communities
Stuart is guided by over 30 years of business management experience, having successfully built and help sell multiple small and medium businesses while consulting for numerous Fortune 500 companies. He holds a B.A in Business Administration from Oklahoma State and an MBA from Oklahoma City University.