BES Deployment and Zonal Average Shift Factor

1. BES Deployment and Zonal Average Shift Factor Joel Mickey Manager of Market Operation Support ERCOT

2. Contents • Issue • What happened • Rationality discussion • Proposed method • Problem analysis • The proposed method & how it works • Evaluation • Performance improvement • Statistics results Market Operation Support

3. What happened? • A few intervals every month since 7/2001 • CSC (Zonal) congestion; • High Zonal MCPE (positive or negative); • Deploy a large volume of both UBES and DBES; • Some constraints violated (either CSC violation or Ramp Rate violation). Market Operation Support

4. An Example • Interval: 6/09/2004 13:00 AM • CSC Congestion: South to Houston • CSC Violation: CSC limit: 950 MW Actual: 992 MW • Local Congestion: No Market Operation Support

5. BES Deployment and MCPE *Shift Factor of SH CSC Market Operation Support

6. Deployment Rationality Debate • To solve SH congestion, • Normally, system deploys UBES in Houston and DBES in South; • If congestion still exists, system continues to deploy UBES/DBES pairs from other zones (as example shows, more than 1000 UBES in north and 1000 DBES in Northeast to relieve about 1.5MW of congestion); • And CSC may still remain violated. • Is this what we want? Market Operation Support

7. Problem Analysis • How does the UBES/DBES pair mitigate CSC congestion? • Zone#1, SF1 = -0.3; Zone#2, SF2 = 0.2; ∆SF = 0.5 • UBESMW*SF1 - DBESMW*SF2 = ∆CSC MWrelieved • To relieve 1 MW of CSC congestion • BESMW = 1 MW/ ∆SF = 1 MW/0.5 = 2 MW • Zone#1, UBES 2 MW; Zone#2, DBES 2 MW • What is issue? • What if ∆SF = 0.005? • To relieve 1 MW of CSC congestion • BESMW = 1 MW/ ∆SF = 1 MW/0.005 = 200 MW Market Operation Support

8. Shift Factor Data in Example • To relieve 1 MW of SH congestion • DBES in S and UBES in H • ∆SF = 0.364 • BESdeployed = 1/∆SF = 2.75 MW • DBES in NE and UBES in N • ∆SF = 0.0014 • BESdeployed = 1/∆SF = 714 MW *Shift Factor to CSC SH Market Operation Support

9. Proposed Method – our goal • To reduce inefficient BES deployment for those intervals that have: • Great amount of UBES/DBES deployment which provides little relief to CSC congestion. • With small or no side negative impact on other intervals • Small or no impact on cleared BES; • Small or no impacton CSC flow. Market Operation Support

10. Proposed Method - methodology • Group the Zones with Shift Factors close to each other • Grouping threshold is 0.02 (or another desirable value) • Average the Shift Factors in the same group • Arithmetic average Market Operation Support

11. Modify Shift Factors in Example *Shift Factor to CSC SH Market Operation Support

12. New Results Market Operation Support

13. Performance in Example • Total BES deployment is reduced by 53.6% when using modified Shift Factor Market Operation Support

14. Improvement Statistics • From 01-01-04 to 09-30-04: • 15 intervals with inefficient BES deployment for CSC congestion: great amount of UBES and DBES deployment and high zonal prices • After the proposed change, Market Operation Support

15. Effect on Actual Flow Market Operation Support

16. Evaluation • Tested the proposed method on 54 intervals in 4 days with comparatively smaller amount of inefficient BES deployment for CSC congestion. There is a small decrease in BES deployment and a small increase in the calculated flow on the constrained CSC. • As the calculated flow based on the original shift factors may have a as high as 20% difference from the actual physical flow, the small increase in the calculated flow due to the modified shift factors can be negligible. • Tested the proposed method on 50 intervals without CSC congestion • No impact. Market Operation Support

17. Conclusions • After grouping zones and averaging shift factors, there is a great decrease in BES deployment for those intervals with inefficient BES deployment for CSC congestion. • The proposed method has small impact on all other intervals. Market Operation Support

18. Proposed PRR • Add (5) to 7.2.1.2 as below: • “(5) if the Shift Factor difference of two or more zones for a CSC is less than or equal to 0.02 (?), ERCOT shall reset the Shift Factor to the same value for each applicable zone. The reset value will be the arithmetic average of the original Shift Factors of the applicable zones.” Market Operation Support

19. Implementation • The proposed method has no system impact. It can be implemented right after the proposed PRR is approved. Market Operation Support

20. Cost Benefit Analysis ─ Benefit • Cost Savings for the 15 intervals with very inefficient deployment Market Operation Support

21. Cost Benefit Analysis ─ Cost • No implementation cost. • Operators may need to manually send out fleet instruction to resolve several more MW CSC congestion. Market Operation Support

22. Long Term Solution (proposal I) • Two sets of zonal Shift Factors: ERCOT will still use the original zonal Shift Factors to calculate the CSC impact by generation schedule and load forecast, while the modified zonal Shift Factors will be used for BES deployment. This proposed method will further improve system performance but require system change. Market Operation Support

23. Long Term Solution (proposal II) • Do not modify zonal Shift Factors, but set a cap for CSC Shadow Price. The BES deployment will stop at a set point when inefficient BES deployments start. This proposed method does not require a system change, but ERCOT must conduct a thorough study to determine the point at which the BES deployment will cease. • As this method affects CSC Shadow Price, it will also affect the value of TCR. The cap needs to be set before TCR auction. Market Operation Support

24. Questions Market Operation Support