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ERCOT WHOLESALE ERCOT WHOLESALE MARKET OPERATIONSMARKET OPERATIONS
MODULE 2MODULE 2
2
Essential ConceptsEssential Concepts
Ancillary ServicesAncillary Services
Congestion ManagementCongestion Management
TopicsTopics
3
Topic 1:Topic 1:Essential ConceptsEssential Concepts
4
Essential ConceptsEssential Concepts
Market Structure
Wholesale Concepts and Roles
Introduction to the Day-Ahead and Operating Day process
5
TOPIC 1: Essential ConceptsTOPIC 1: Essential Concepts
Wholesale MarketWholesale Market::
Zonal DesignZonal Design
Bilateral MarketBilateral Market
RequirementsRequirements::
QSE RepresentationQSE Representation
Balanced SchedulesBalanced Schedules
ERCOT StructureERCOT Structure
6
Market Participants qualified by ERCOT to:
Submit Balanced Schedules
Submit Ancillary Services Bids
Settle with ERCOT
Qualified Scheduling Entity (QSE)Qualified Scheduling Entity (QSE)
QSE
TOPIC 1: Essential ConceptsTOPIC 1: Essential Concepts
All Resources and LSEs must be represented by a QSEAll Resources and LSEs must be represented by a QSE
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Definition / SummaryDefinition / Summary
A trade agreement between two entitiesA trade agreement between two entities
Bilateral transactions are scheduled with ERCOT Bilateral transactions are scheduled with ERCOT
Examples:Examples:
1.1. QSE A sells a block of 50 Mwh (North Zone), to QSE B for QSE A sells a block of 50 Mwh (North Zone), to QSE B for Hour-Ending 1100-1300 Hour-Ending 1100-1300
2.2. QSE A sells 3 Mw of Responsive Reserve to QSE B for Hour-QSE A sells 3 Mw of Responsive Reserve to QSE B for Hour-Ending 1400.Ending 1400.
Bilateral TransactionsBilateral Transactions
TOPIC 1: Essential ConceptsTOPIC 1: Essential Concepts
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Balanced SchedulesBalanced Schedules
For each Interval of a QSE schedule:For each Interval of a QSE schedule:
Qty of Resources and Obligations must Qty of Resources and Obligations must BalanceBalance
Bilateral Transactions must Bilateral Transactions must MatchMatch (Qty, QSE, Zone) (Qty, QSE, Zone)
Resources: Generation or purchasesResources: Generation or purchasesObligations: Load or salesObligations: Load or sales
TOPIC 1: Essential ConceptsTOPIC 1: Essential Concepts
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““Relaxed” Balanced SchedulesRelaxed” Balanced Schedules
For each Interval of a QSE schedule:For each Interval of a QSE schedule:
Qty of Resources and Obligations must Qty of Resources and Obligations must BalanceBalance
Bilateral Transactions must Bilateral Transactions must MatchMatch (Qty, QSE, Zone) (Qty, QSE, Zone)
QSE may QSE may setset obligations equal to supply, and/or schedule obligations equal to supply, and/or schedule BES via ERCOT to meet Obligations*BES via ERCOT to meet Obligations*
Resources: Generation or purchasesResources: Generation or purchasesObligations: Load or salesObligations: Load or sales
TOPIC 1: Essential ConceptsTOPIC 1: Essential Concepts
* Limited by QSE’s collateral with ERCOT
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Balanced SchedulesBalanced Schedules
ERCOT does not require QSEs to be balanced within each ERCOT does not require QSEs to be balanced within each Congestion Zone. However, not being balanced within each Congestion Zone. However, not being balanced within each zone may result in zone may result in congestion charges (or payments).congestion charges (or payments).
SQSESQSE SQSESQSE
TOPIC 1: Essential ConceptsTOPIC 1: Essential Concepts
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QSE Balanced Schedule – Portal DisplayQSE Balanced Schedule – Portal Display
TOPIC 1: Essential ConceptsTOPIC 1: Essential Concepts
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Balanced, but Balanced, but mismatchedmismatched
TOPIC 1: Essential ConceptsTOPIC 1: Essential Concepts
13
What is the What is the Resource Plan?Resource Plan?
Each QSE representing a Resource or Load Acting as a Each QSE representing a Resource or Load Acting as a Resource must submit a Resource Plan!!Resource must submit a Resource Plan!!
Plan of how Generation Resources will operatePlan of how Generation Resources will operate
Due to ERCOT Due to ERCOT by 4:00 pmby 4:00 pm of the day-ahead period of the day-ahead period
Used by ERCOT to determine resource adequacyUsed by ERCOT to determine resource adequacy
Validated against balanced schedulesValidated against balanced schedulesLet’s
CheckUnder the
Hood!
Resource PlanResource Plan
TOPIC 1: Essential ConceptsTOPIC 1: Essential Concepts
14
SYSTEM RELIABILITYSYSTEM RELIABILITY
ERCOT is here to ensure reliability by:ERCOT is here to ensure reliability by:
Resource capacity planningResource capacity planning..
Real-time transmission managementReal-time transmission management..
Procure balancing energyProcure balancing energy..
Issue deployment instructions to units, as needed.Issue deployment instructions to units, as needed.
ERCOT Roles: ReliabilityERCOT Roles: Reliability
ERCOT is similar to an Air Traffic ControllerERCOT is similar to an Air Traffic Controller
TOPIC 1: Essential ConceptsTOPIC 1: Essential Concepts
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Energy Buyers and SellersEnergy Buyers and Sellers submit their bilateral transactions submit their bilateral transactions (trades) to a Qualified Scheduling Entity (QSE).(trades) to a Qualified Scheduling Entity (QSE).
QSEsQSEs submit Balanced Schedules, Ancillary Services Bids and a submit Balanced Schedules, Ancillary Services Bids and a Resource Plan (if applicable) to ERCOT. Resource Plan (if applicable) to ERCOT.
ERCOTERCOT manages any manages any real-time imbalancesreal-time imbalances during the Operating during the Operating Period between forecasts and actual demands by deploying Period between forecasts and actual demands by deploying balancing energy.balancing energy.
Wholesale Process: From Scheduling to Power FlowWholesale Process: From Scheduling to Power Flow
TOPIC 1: Essential ConceptsTOPIC 1: Essential Concepts
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Wholesale Market TimelineWholesale Market Timeline
ERCOT Market Timeline
Market Operations
AdjustmentPeriod:Precedes Operating Period
Operating Period: Balancing Energy Clearing Occurs every 15 minutes
PowerOperations
Day-AheadPeriod: 6:00am to 6:00pm prior to Operating Day.
Commercial Operations
Initial Settlement10 days afterOperating Day
FinalSettlement59 days afterOperating Day
True-upSettlement:180 days afterOperating DayAnd/or specificProtocolCriteria is met
TOPIC 1: Essential ConceptsTOPIC 1: Essential Concepts
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Day-Ahead Period6:00AM to 6:00PM on the day prior to the Operating Day (“flow” date) QSEs submit balanced schedules and ancillary services bidsERCOT clears Ancillary Services Markets, and publishes results.
Adjustment PeriodTime between the close of the Day-Ahead Market and the start of the Operating Period.QSEs may modify their schedules and/or bids during this time.
Operating PeriodIncludes the Operating hour (“flow hour”) and the hour prior to Operating hour (look-ahead studies).
Wholesale Market TimelineWholesale Market Timeline
TOPIC 1: Essential ConceptsTOPIC 1: Essential Concepts
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Midnight
Wholesale Market TimelineWholesale Market Timeline
TOPIC 1: Essential ConceptsTOPIC 1: Essential Concepts
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Day-Ahead Period Key Times
06:00 Forecast Information Published11:00 Deadline for Day-Ahead Scheduling (Bilateral, A/S)11:15 Deadline to resolve Day-Ahead Mismatches13:00 Deadline for A/S Capacity Market Bids
Deadline for Adjusted Day-Ahead Schedules13:30 A/S Capacity results & MCPC16:00 Deadline for Resource Plan submittal
Replacement Reserve BidsSystem Lockdown for Day-Ahead Analysis
18:00 Day-Ahead Period complete; start of AdjustmentPeriod
Wholesale Market Timeline – Day Ahead PeriodWholesale Market Timeline – Day Ahead Period
TOPIC 1: Essential ConceptsTOPIC 1: Essential Concepts
20
Adjustment Period – ERCOT does not have an “Hour-Ahead” period, as in some ISOs – it is referred to as the Adjustment Period.
On the Operating Day, the Adjustment Period is anytime up to one hr prior to Operating (“flow”) Hour when QSEs can alter or remove existing schedules, or submit new schedules for the Operating Hour.
Deadline for QSEs to submit schedules & changes is one hour prior to the “flow” hour. (i.e., deadline for HE1300 is 1100, because HE 1300 begins at 1200).
Wholesale Market Timeline – Adjustment PeriodWholesale Market Timeline – Adjustment Period
TOPIC 1: Essential ConceptsTOPIC 1: Essential Concepts
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Operating Period is 2 Hours. It starts immediately after the Adjustment Period, when all QSE schedules have been submitted and cannot be altered or removed.
First Hour – system lockdown – allows for system studies for the upcoming flow hour based on QSE schedules
Second Hour is the Operating (“Flow”) Hour
Wholesale Market Timeline – Operating PeriodWholesale Market Timeline – Operating Period
TOPIC 1: Essential ConceptsTOPIC 1: Essential Concepts
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Topic 2:Topic 2:Ancillary ServicesAncillary Services
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Ancillary Services (Reserves)Ancillary Services (Reserves)
Definitions and Requirements Definitions and Requirements (and why we need them)(and why we need them)
LSE Obligations and Supply OptionsLSE Obligations and Supply Options
Descriptions of ServicesDescriptions of Services
Merit-Order vs. Out of MeritMerit-Order vs. Out of Merit
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
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What are Ancillary Services, and why does ERCOT What are Ancillary Services, and why does ERCOT need them?need them?
Generation that is intentionally Generation that is intentionally reservedreserved,, in the in the event it is needed. (i.e., a plant that generates 50 event it is needed. (i.e., a plant that generates 50 Mw of its maximum of 100 Mw has 50 Mw of Mw of its maximum of 100 Mw has 50 Mw of reservereserve capacity available) capacity available)
ReserveReserve capacitycapacity can be utilized (converted to can be utilized (converted to energyenergy) to keep the lights on ) to keep the lights on in the event of an in the event of an unforeseen system disturbance. unforeseen system disturbance.
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
““Energy InsuranceEnergy Insurance””
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As a QSE that schedules load, why do I need to As a QSE that schedules load, why do I need to know about A/S?know about A/S?
Market Participants Market Participants serving loadserving load have an have an A/S A/S ObligationObligation as a “ as a “cost of doing businesscost of doing business.”.”
Similar to Auto Insurance: If you own a vehicle Similar to Auto Insurance: If you own a vehicle in Texas, Liability Insurance is a mandated in Texas, Liability Insurance is a mandated cost that goes along with owning the vehicle.cost that goes along with owning the vehicle.
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
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Annual ProcedureAnnual Procedure
ERCOT establishes the ERCOT establishes the procedure for determining A/S procedure for determining A/S system requirementssystem requirements. It is reviewed and approved in the . It is reviewed and approved in the stakeholder process.stakeholder process.
Monthly CalculationMonthly Calculation
System-wide requirement is calculatedSystem-wide requirement is calculated, based on , based on statistical calculations and historical deployments.statistical calculations and historical deployments.
ERCOT System RequirementsERCOT System Requirements
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
““ERCOT Methodologies for ERCOT Methodologies for Determining Ancillary Determining Ancillary Service Requirements” Service Requirements” posted under Key posted under Key Documents.Documents.
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OK, what is my share of the ERCOT System OK, what is my share of the ERCOT System Requirement?Requirement?
It is based on your load relative to total ERCOT load, or Load Ratio Share (LRS).
If you have 10 Mw of Load, and ERCOT has 100 Mw of total load, your LRS is 10%. Your obligation will be 10% of each service that ERCOT requires.
QSE Day-Ahead LRS Obligations are posted each morning by 6AMQSE Day-Ahead LRS Obligations are posted each morning by 6AM
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
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Do I have a requirement if I am a QSE that has no Do I have a requirement if I am a QSE that has no load?load?
No. If you only have bilateral transactions and no load, you will not incur any A/S Obligations, UNLESS……
…you have an EXPORT on the DC Tie. An export is considered load, so if you schedule an export, you can expect to see an A/S Obligation 14 days later.
QSE Day-Ahead LRS Obligations are posted each morning by 6AMQSE Day-Ahead LRS Obligations are posted each morning by 6AM
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
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Where can I get Ancillary Services to fulfill my obligation?Where can I get Ancillary Services to fulfill my obligation?
QSEs can Self-Arrange:QSEs can Self-Arrange:a.a. Using its own resourceUsing its own resourceb.b. Purchase from another entity (A/S Bilateral Trade)Purchase from another entity (A/S Bilateral Trade)
QSEs can purchase from ERCOT at the Day-Ahead MCP QSEs can purchase from ERCOT at the Day-Ahead MCP for Capacity (MCPC).for Capacity (MCPC).
Note: Per Note: Per Protocol Section 4.3.1Protocol Section 4.3.1: QSEs that intend to purchase : QSEs that intend to purchase their obligation from ERCOT their obligation from ERCOT MUSTMUST schedule a bilateral schedule a bilateral PURCHASE from ERCOT.PURCHASE from ERCOT.
Ancillary Service Supply OptionsAncillary Service Supply Options
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
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A/S providers must be qualified by ERCOT to provide each A/S
Must keep awarded capacity in reserve
Must meet performance metrics (perform when called upon)
Ancillary Services SellersAncillary Services Sellers
A/SA/S
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
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Out-of-Merit vs. Merit-Order Out-of-Merit vs. Merit-Order
Merit-OrderMerit-Order Based on bidsBased on bids, “stacked” from least to most expensive, “stacked” from least to most expensive Market Price for Capacity and Energy is produced.Market Price for Capacity and Energy is produced.
Out-of-MeritOut-of-Merit:: Without respect to costWithout respect to cost Needed for reliability, regardless of economics.Needed for reliability, regardless of economics. Also utilized when no market solution exists.Also utilized when no market solution exists.
Selection ScenariosSelection Scenarios
ERCOT NEEDS YOU!
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
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Ancillary ServiceAncillary Service StatusStatus DeploymentDeployment ReasonReason
Regulation UpRegulation Up On-LineOn-Line ImmediateImmediate Small changes in FrequencySmall changes in Frequency
Regulation DownRegulation Down On-LineOn-Line ImmediateImmediate Small changes in FrequencySmall changes in Frequency
Responsive ReserveResponsive Reserve On-LineOn-Line Within a few Within a few minutesminutes
Significant deviation in Significant deviation in FrequencyFrequency
Non-Spinning ReserveNon-Spinning Reserve Off-LineOff-Line Within 30 MinutesWithin 30 Minutes >92 degrees, < 30 degrees, >92 degrees, < 30 degrees, or contingency of resource or contingency of resource lossloss
Target Frequency: 60 HzTarget Frequency: 60 Hz
Other Attributes:Other Attributes:• Day-Ahead Capacity MarketDay-Ahead Capacity Market• Selected in Merit OrderSelected in Merit Order
Ancillary Services: Option to Self-ArrangeAncillary Services: Option to Self-Arrange
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
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Day-Ahead A/S Capacity Market: Selection ProcessDay-Ahead A/S Capacity Market: Selection Process
System Requirement – 2300 MwSystem Requirement – 2300 Mw
23002300
13801380
Self-Arranged QtySelf-Arranged Qty(from A/S schedules)(from A/S schedules)
ERCOT to procure ERCOT to procure 920920 Mw via Mw via A/S Capacity MarketA/S Capacity Market
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
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920920
ERCOT moves “up the bid stack” until it reaches the necessary qty. The price ERCOT moves “up the bid stack” until it reaches the necessary qty. The price associated with that qty sets the MCPC. ($2.10 in this example)associated with that qty sets the MCPC. ($2.10 in this example)
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
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A/S Cash FlowsA/S Cash Flows
QSE AQSE A ERCOTERCOT
Day-Ahead Capacity ResultDay-Ahead Capacity ResultAward * $ Hourly MCPCAward * $ Hourly MCPC
““I will reserve X Mw I will reserve X Mw (awarded qty) of (awarded qty) of
generation”generation”
QSE AQSE A ERCOTERCOT
Mw * $ MCPE (BES)Mw * $ MCPE (BES)Deployment on Operating DayDeployment on Operating Day
ERCOT-instructed MwERCOT-instructed Mw
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
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A/S Cash FlowsA/S Cash Flows
QSE AQSE A ERCOTERCOT
Day-Ahead Capacity ResultDay-Ahead Capacity ResultAward * $ Hourly MCPCAward * $ Hourly MCPC
““I will reserve X Mw I will reserve X Mw (awarded qty) of (awarded qty) of
generation”generation”
If NO Deployments are issued by ERCOT:If NO Deployments are issued by ERCOT:
QSE A KEEPS the capacity payment QSE A KEEPS the capacity payment
Also similar to paying auto insurance premium, but not having a claim before the Also similar to paying auto insurance premium, but not having a claim before the policy expirespolicy expires
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
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A/S Cash FlowsA/S Cash Flows
QSE AQSE A ERCOTERCOT
How does ERCOT get the money to pay for Capacity?How does ERCOT get the money to pay for Capacity?
Net ObligationNet Obligation
ERCOT charges load QSEs for non-self-arranged obligationsERCOT charges load QSEs for non-self-arranged obligations
ERCOT remains revenue-neutral!ERCOT remains revenue-neutral!
$$$$$$$$
CapacityCapacity CapacityCapacity
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
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Replacement ReserveReplacement Reserve
Resources planned to be off-line, but availableResources planned to be off-line, but available
Deployed for Capacity Insufficiency, Zonal Congestion or Deployed for Capacity Insufficiency, Zonal Congestion or Local CongestionLocal Congestion
Black StartBlack Start
Widespread black out eventWidespread black out event
Started without support of the power gridStarted without support of the power grid
Contracted by ERCOT annuallyContracted by ERCOT annually
Exclusively Arranged by ERCOTExclusively Arranged by ERCOT
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
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Reliability Must-RunReliability Must-Run
Resolves local system reliabilityResolves local system reliability
Contracted by ERCOT Contracted by ERCOT
Otherwise would not be an active resourceOtherwise would not be an active resource
Exclusively Arranged by ERCOTExclusively Arranged by ERCOT
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
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Out-of-Merit Capacity (OOMC)Out-of-Merit Capacity (OOMC)
CapabilityCapability of providing additional Balancing Energy Service of providing additional Balancing Energy Service
Otherwise not selected because of the place (or absence) Otherwise not selected because of the place (or absence) in the Merit Order bid stackin the Merit Order bid stack
Out-of-Merit Energy (OOME)Out-of-Merit Energy (OOME)
ProvisionProvision of balancing energy to solve local congestion, or of balancing energy to solve local congestion, or when no market solution existswhen no market solution exists
Exclusively Arranged by ERCOT / Out of MeritExclusively Arranged by ERCOT / Out of Merit
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
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Balancing Energy (Merit Order)Balancing Energy (Merit Order)
Energy deployed by ERCOT every 15 Energy deployed by ERCOT every 15 minutesminutes
Deployed when load forecast is higher or Deployed when load forecast is higher or lower than scheduled ORlower than scheduled OR
Also deployed to resolve CongestionAlso deployed to resolve Congestion
Market Clearing Price for Energy (MCPE)Market Clearing Price for Energy (MCPE)
Exclusively Arranged by ERCOTExclusively Arranged by ERCOT
Example:Example:
Load Imbalance (LI) settles at BES MCPLoad Imbalance (LI) settles at BES MCP
LI: Difference between scheduled and LI: Difference between scheduled and metered metered loadload
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
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Ancillary Services SummaryAncillary Services Summary
Option to Self Arrange OR Purchase from ERCOTOption to Self Arrange OR Purchase from ERCOT
No Option to Self Arrange: Exclusively provided by ERCOTNo Option to Self Arrange: Exclusively provided by ERCOT
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
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A FULL SERVICE QSEA FULL SERVICE QSE
Markets and Schedules Markets and Schedules WATTScoWATTSco power generation. power generation.
Wholesale Supplier and Scheduler for Wholesale Supplier and Scheduler for POWERMARTPOWERMART and and EZWattsEZWatts, , retailers.retailers.
Qualified to provide Ancillary Services.Qualified to provide Ancillary Services.
Provide Power Marketing Services. Provide Power Marketing Services.
INTRODUCING!!
SQSESQSE
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
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A/S Obligation – A/S Obligation – Load Ratio ShareLoad Ratio Share
ERCOT calculates the ERCOT calculates the “load-ratio share”“load-ratio share” (LRS) of each (LRS) of each Load Serving Entity (LSE).Load Serving Entity (LSE).
QSE’s Load Ratio Share is the aggregate total of the LSE QSE’s Load Ratio Share is the aggregate total of the LSE LRS that it represents.LRS that it represents.
QSE’s A/S Obligation is its LRS of the Total ERCOT-wide QSE’s A/S Obligation is its LRS of the Total ERCOT-wide requirement.requirement.
SQSESQSE
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
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Example: Day-Ahead A/S Obligation for 4/26/04Example: Day-Ahead A/S Obligation for 4/26/04
SQSESQSE represents represents POWERMART [88]POWERMART [88] and and EZWatts [55]EZWatts [55], LSEs. , LSEs. On April 12, 2004 (14-days ago) the aggregated load for these two On April 12, 2004 (14-days ago) the aggregated load for these two LSEs came to:LSEs came to:
SQSESQSE
April 12 Load LRSApril 12 Load LRS
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
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A/S Obligation – For Example!
For intervals “hour-ending” 1000 through 1200 the A/S obligations are determined by taking the LRS times each ERCOT-wide obligation, rounded to a whole MW.
SQSESQSE
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
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A/S Obligation – For Example!- SQSE represents represents LSE_LSE_8888 and LSE_ and LSE_5555-- SQSE A/S Obligation = sum of the obligations of LSE_88 and LSE_55:
SQSESQSE
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
26-Apr-0426-Apr-04
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Day-Ahead Obligation:
Based on the Load Ratio Share of the Load from the Initial Settlement data, for the Operating Day that is 14 days before the day in which the Obligation is being calculated.
After the Operating Day: (PRR 451)
The AS Obligation calculations are adjusted (trued-up) based on the most up-to-date Load Data for each settlement run.
SQSESQSE
A/S Obligations: Recent Change!A/S Obligations: Recent Change!
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
49
Ancillary Service Obligations – Portal ViewAncillary Service Obligations – Portal View
- Posted by 6 AM one day prior to the Operating DayPosted by 6 AM one day prior to the Operating Day- Obligation is under “Required Mw” columnObligation is under “Required Mw” column
Legend:Legend:DRS: Down Regulation ServiceDRS: Down Regulation ServiceNSRS: Non Spin Reserve ServiceNSRS: Non Spin Reserve ServiceRRS: Responsive Reserve ServiceRRS: Responsive Reserve ServiceURS: Up Regulation ServiceURS: Up Regulation Service
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
50
Ancillary Service Scheduling: Keep in Mind…
A/S Scheduling OptionsA/S Scheduling Options
Self-ArrangementSelf-Arrangement
Bilateral purchase from another QSEBilateral purchase from another QSE
If QSE is using its own resource, purchase from selfIf QSE is using its own resource, purchase from self
Purchase from ERCOTPurchase from ERCOT
Bilateral purchase from ERCOTBilateral purchase from ERCOT
TOPIC 2: Ancillary ServicesTOPIC 2: Ancillary Services
51
Topic 3: Topic 3: Congestion ManagementCongestion Management
52
Congestion ManagementCongestion Management
Definitions and Key ConceptsDefinitions and Key Concepts
Zonal vs. Local CongestionZonal vs. Local Congestion
Cost of CongestionCost of Congestion
Transmission Congestion RightsTransmission Congestion Rights
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
53
ConstraintConstraintA transmission element or group of elements that A transmission element or group of elements that limit limit the free flowthe free flow of energy. Constraints are typically of energy. Constraints are typically thermal, voltage stability,thermal, voltage stability, and and angular stabilityangular stability limitations. These constraints are the result of defined limitations. These constraints are the result of defined contingencies such as the trip of a generating unit or contingencies such as the trip of a generating unit or transmission circuit.transmission circuit.
Commercially Significant Constraint (CSC)Commercially Significant Constraint (CSC)A constraint in the ERCOT Transmission Grid that is A constraint in the ERCOT Transmission Grid that is found to limit the free flow of energy a found to limit the free flow of energy a commercially commercially significant degreesignificant degree..
Key DefinitionsKey Definitions TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
54
CongestionCongestion
The situation that exists when The situation that exists when scheduledscheduled power flowspower flows, , when netted, when netted, are projected to are projected to exceedexceed the capability the capability of a of a Transmission element or set of elements.Transmission element or set of elements.
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
Congestion ZoneCongestion ZoneA grouping of busses that create a similar Shift Factor A grouping of busses that create a similar Shift Factor on CSCson CSCs
CSC LimitCSC LimitMaximum flow allowed across a CSC to Maximum flow allowed across a CSC to maintain reliable operationmaintain reliable operation
Key DefinitionsKey Definitions
55
Shadow Price (SP)Shadow Price (SP)The The marginal pricemarginal price of the constraint ~ it indicates the of the constraint ~ it indicates the change in the overall cost, in $/MW.change in the overall cost, in $/MW.
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
Shift Factor (SF)Shift Factor (SF)Measure of power flow impactMeasure of power flow impact on a transmission on a transmission elementelement
Key DefinitionsKey Definitions
56
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
Schedule Impact (SI)Schedule Impact (SI)The The MW impactMW impact that bilateral energy schedules have that bilateral energy schedules have on a CSC. on a CSC.
TCR’sTCR’sTransmission Congestion Rights are a Transmission Congestion Rights are a financial financial instrumentinstrument that enables QSEs to hedge against the that enables QSEs to hedge against the risk of incurring congestion charges. risk of incurring congestion charges.
Key DefinitionsKey Definitions
57
Four Congestion Zones
FiveFive CSCsCSCs
1.1. South to NorthSouth to North
2.2. South to HoustonSouth to Houston
3.3. North to HoustonNorth to Houston
4.4. West to NorthWest to North
5.5. North to WestNorth to West
Zones and CSCsZones and CSCs
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
NorthNorthWestWest
SouthSouth HoustonHouston
58
Managing traffic on the electric grid:Managing traffic on the electric grid:
Safe operating limitsSafe operating limits on the transmission system are on the transmission system are projected to be exceeded.projected to be exceeded.
QSEs can modify schedules to QSEs can modify schedules to avoid congestionavoid congestion..
Action is takenAction is taken if the physical flow approaches transfer limits. if the physical flow approaches transfer limits.
Resources are Resources are re-dispatched (“INC / DEC”)re-dispatched (“INC / DEC”)
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
59
Congestion must be managed, and it costs $$$!
Even when the flow on the constraint is Even when the flow on the constraint is brought down below the limit by redispatch, brought down below the limit by redispatch,
we are in a congestion situationwe are in a congestion situation
Or ELSE Or ELSE - Equipment may be damaged- Equipment may be damaged
- System may become unstable- System may become unstable
ERCOT ObjectiveERCOT ObjectiveKeep flows under limits,Keep flows under limits,
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
60
Local CongestionLocal Congestion
• a.k.a. a.k.a. INTRA-zonalINTRA-zonal congestioncongestion
• Occurs within a congestion Occurs within a congestion zonezone
• Cannot be resolved with Cannot be resolved with Zonal balancing energyZonal balancing energy
• Unit-specific deployments Unit-specific deployments and OOM Energy are and OOM Energy are utilizedutilized
Types of CongestionTypes of Congestion
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
NorthNorthWestWest
SouthSouth HoustonHouston
61
Zonal CongestionZonal Congestion
• a.k.a. a.k.a. INTER-zonalINTER-zonal congestioncongestion
• Occurs between Occurs between congestion zonescongestion zones
• Resolved using Zonal Resolved using Zonal Balancing Energy Balancing Energy (Merit Order)(Merit Order)
Types of CongestionTypes of Congestion
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
NorthNorthWestWest
SouthSouthHoustonHouston
62
How does congestion affect a QSE with load?How does congestion affect a QSE with load?
Local CongestionLocal Congestion
Total ERCOT cost Total ERCOT cost Uplifted at Load Ratio ShareUplifted at Load Ratio ShareAll All QSEs with loadQSEs with load pay for local congestion if it exists pay for local congestion if it exists anywhereanywhere
Zonal CongestionZonal Congestion
Direct AssignmentDirect Assignment to to ALL QSEsALL QSEs with schedules with schedules impacting congested CSCsimpacting congested CSCsCost = Cost = Schedule ImpactSchedule Impact on each CSCon each CSC * Shadow Price * Shadow Price
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
Cost of CongestionCost of Congestion
63
How does congestion affect a QSE that has no load?How does congestion affect a QSE that has no load?
Local CongestionLocal Congestion
No effect, no charges.No effect, no charges.
Zonal CongestionZonal Congestion
Direct AssignmentDirect Assignment to to ALL QSEsALL QSEs with schedules with schedules impacting congested CSCsimpacting congested CSCsCost = Cost = Schedule ImpactSchedule Impact on each CSCon each CSC * Shadow Price * Shadow Price
Cost of Congestion
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
64South
Houston
10MW
2 MW Zonal Shift Factor S-HZone
0.2South
-0.3Houston
10MW
3 MW
Aggregate Generation = 10 MW
South-Houston CSC
Zonal shift factor is the average effect that changing generation in a zone has on a particular CSC constraint
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
65
Known transmission conditionsKnown transmission conditions
Expected transmission conditions for the next dayExpected transmission conditions for the next day
Resource Plans for next dayResource Plans for next day
Bilateral Schedules for next dayBilateral Schedules for next day
Congestion Studies – Congestion Studies – Day-AheadDay-Ahead
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
66
Procurement of RPRS (Zonal/Local Congestion). Procurement of RPRS (Zonal/Local Congestion).
Procurement of OOMC / OOME Procurement of OOMC / OOME
RMR Delivery Plan is completedRMR Delivery Plan is completed
Congestion Studies – Congestion Studies – Day Ahead and Day Ahead and before each Operating Hourbefore each Operating Hour
The Studies Result in:The Studies Result in:
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
67
Scheduling, Pricing and Dispatch = SPDScheduling, Pricing and Dispatch = SPD
Executes every 15 minutes to deploy Balancing EnergyExecutes every 15 minutes to deploy Balancing Energy
• Calculated CSC flows• Calculated flow for OC2
constraints• Portfolio Balancing
Awards and resource specific instructions
• Zonal MCPEs
Inputs Outputs
• Telemetered Generator MW output
• Shift factors• Forecasted load• QSE Energy Schedules• QSE Resource Plan data• OC1 and OC2 constraint
limits
ERCOT Market Operating System
* Note: Real time (Physical) limits are not visible to SPD
Scheduling, Pricing & DispatchScheduling, Pricing & Dispatch
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
68
Real-time Will be created by Simultaneous Feasibility Test (SFT) software
Local -
Future Use
OC3
Real-time Limit may be changed in adjustment or operating period based on impending congestion conditions
LocalOC2
Real-time SPD limit may be changed in adjustment or operating period based on impending congestion conditions
Setting of 9999 indicates constraint not active
Zonal
CSC / CRE
OC1
Monthly Based on planning studies taking into account planned outages, flow patterns
Basis of TCRs and CSC congestion notifications Suppressed in favor of OC1 in Real-time
Balancing
Zonal
CSC
OC0
FrequencyDescriptionApplicabilityLimit
Types of Constraints used by SPDTypes of Constraints used by SPD
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
69
What the Operator SeesSees
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
70
What the Operator DoesWhat the Operator Does
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
71
BES Deployment PrinciplesBES Deployment Principles
QSEs shall first meet the specific resource deployment and QSEs shall first meet the specific resource deployment and then meet the BES deployment instruction.then meet the BES deployment instruction.
In the event that a QSE is unable to provide the BES due to a In the event that a QSE is unable to provide the BES due to a specific resource deployment then the QSE will follow the specific resource deployment then the QSE will follow the notification procedures established in Section 5, Dispatch. notification procedures established in Section 5, Dispatch.
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
72
Balancing Energy Deployments (BES) Balancing Energy Deployments (BES)
When zonal transmission constraints are NOT in effect:When zonal transmission constraints are NOT in effect:
• The BES bid curves submitted by QSEs are used to establish The BES bid curves submitted by QSEs are used to establish a bid stack.a bid stack.
• The ERCOT EMS uses this stack to competitively select up or The ERCOT EMS uses this stack to competitively select up or down balancing energy, whichever is needed in the next down balancing energy, whichever is needed in the next interval for zonal balancing or inter-zonal congestion.interval for zonal balancing or inter-zonal congestion.
Stack’mUP!
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
73
North
South
MW
$
MW
$
MCPE – No Congestion
MW
$
One consolidated bid stack for Balancing Energy
MCPE
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
74
Balancing Energy Deployments (BES)Balancing Energy Deployments (BES)
When zonal transmission constraints ARE in effect:When zonal transmission constraints ARE in effect:
• The BES bid curves are separated out into prospective zonal The BES bid curves are separated out into prospective zonal bid stacks for the EMS to competitively select up or down bid stacks for the EMS to competitively select up or down balancing energy to unload the inter-zonal congestion.balancing energy to unload the inter-zonal congestion.
• The resulting zonal BES deployment is the incremental MW The resulting zonal BES deployment is the incremental MW increase (UBES) or decrease (DBES) each QSE awarded increase (UBES) or decrease (DBES) each QSE awarded BES needs to move their portfolio of resources in addition to BES needs to move their portfolio of resources in addition to their planned schedule.their planned schedule.
NorthZone
SouthZone
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
75
North
South
MW
$
MW
$
MCPE – CongestionCongestion
MCPENorth
MCPESouthMCPESPCS-N
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
Note - MCPEs might be higher than the $1500 bid cap.
76
Total Transfer CapabilityTotal Transfer Capability
The maximum power that may be transferred across a The maximum power that may be transferred across a transmission transmission corridorcorridor while maintaining reliability while maintaining reliability
Calculated on an Calculated on an annual basisannual basis
Updated monthlyUpdated monthly
TTC for each CSC establishes the number of TTC for each CSC establishes the number of Transmission Transmission Congestion RightsCongestion Rights (TCRs) to be auctioned (TCRs) to be auctioned
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
77
Transmission Congestion Transmission Congestion RightsRights (TCRs) (TCRs) Financial instrumentsFinancial instruments Can be a Can be a hhedge against congestion chargesedge against congestion charges Revenues from TCR auctions go to QSEs @ LRS!Revenues from TCR auctions go to QSEs @ LRS!
TCR Auction Distribution:TCR Auction Distribution: Annual - Annual - 40% 40% MonthlyMonthly - 60% - 60%
TCR AuctionsTCR Auctions
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
78
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
ERCOT sells TCRs
TCR auction revenues to QSEs at LRS
TCR Auction Process
Winning TCR bidder pays ERCOT and receives TCR.
TCR Price = Clearing price X Number of Hours in period
79
Total transfer Capability
Amount Collected from CSC Congestion charges
Amount Paid to clear congestion
Amount Paid to TCR Holders
Scheduled transfer amount
Congestion Cash Flow
TOPIC 3: Congestion ManagementTOPIC 3: Congestion Management
80
ReviewReview
Who determines daily Ancillary Service requirements?ERCOT
Who schedules Ancillary Services?QSE
Who pays for Local Congestion?QSEs at LRS
What is a TCR?Transmission Congestion Right ( a financial hedge)
Bonus – What is the connection between Shadow Prices and MCPEs?
81
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