1 / 16

ERCOT Studies and Proposal on Reliability Energy Pricing

ERCOT Studies and Proposal on Reliability Energy Pricing. John Dumas Director Wholesale Market Operations. Outline of Discussion. ERCOT Usage of Non-Spinning Reserves ERCOT Usage of RUC Pricing Effects when Non-Spin deployed Proposal on how to minimize impacts to prices.

ralph
Download Presentation

ERCOT Studies and Proposal on Reliability Energy Pricing

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. ERCOT Studies and Proposal on Reliability Energy Pricing John Dumas Director Wholesale Market Operations Reliability Deployments Task Force Meeting

  2. Outline of Discussion • ERCOT Usage of Non-Spinning Reserves • ERCOT Usage of RUC • Pricing Effects when Non-Spin deployed • Proposal on how to minimize impacts to prices

  3. Outline of Discussion • ERCOT Usage of Non-Spinning Reserves • ERCOT Usage of RUC • Pricing Effects when Non-Spin deployed • Proposal on how to minimize impacts to prices

  4. ERCOT Usage of Non-Spin Approximately 55 Non-Spin deployments between go-live Dec 1, 2010 – June 30, 2011 Most deployments lasted between 1 and 3 hours. The February 2 deployment lasted 53 hours, but all other deployments were less than 12 hours.

  5. ERCOT Usage of Non-Spin (continued) On average, ERCOT operator utilizing smaller Non-Spin MW deployments over time

  6. ERCOT Usage of Non-Spin (continued) The LSL amount injected by offline non-spin start-up varies

  7. Outline of Discussion • ERCOT Usage of Non-Spinning Reserves • ERCOT Usage of RUC • Pricing Effects when Non-Spin deployed • Proposal on how to minimize impacts to prices

  8. Analysis of RUC Commitments (May/June 2011) • RUCs May/June analyzed to determine levels committed • ERCOT Operator reason for RUC commit: • For Capacity/Ramping Issues, Congestion/Voltage, or the reason was unlisted (If both Congestion and Capacity was listed, the reason used was Capacity/Ramping)

  9. Analysis of RUC Commitments (May/June 2011) • There were total 2,436 RUC unit hours with Energy Offer Curves in May and June. • About 2/3 of RUC committed resources with Energy Offer Curves remained at LSL as price takers • 1,604 unit hours at LSL, with 832 unit hours moved above LSL • Average MW above LSL = 14 MW for RUC interval • Implies that RUC energy offer curves are not economic to SCED

  10. Outline of Discussion • ERCOT Usage of Non-Spinning Reserves • ERCOT Usage of RUC • Pricing Effects when Non-Spin deployed • Proposal on how to minimize impacts to prices

  11. Non-Spin Deployment impacts on prices The red line below reflects the average HUBAVG LMP across all Non-Spin deployments showing a $50 average system price reduced by $10-15 after non-spin deployed/stabilized. - Data below for Dec 1- May 28 Non-Spin Deployments (47instances) Graph shows the HUBAVG LMP from 30 minutes prior to Non-Spin deployment to one hour after Non-Spin deployment for all Non-Spin deployments except the February 2 deployment, which was excluded due to the extended period of $3001 LMP following deployment.

  12. Outline of Discussion • ERCOT Usage of Non-Spinning Reserves • ERCOT Usage of RUC • Pricing Effects when Non-Spin deployed • Proposal on how to minimize impacts to prices

  13. Proposal on how to minimize price impacts • ERCOT has considered how to minimize or remove pricing impacts to prices from deployment of reliability services • ERCOT’s recommendation will : • Compensate for the effect that the block of injected LSL energy from non-spin resources has on prices, and • Create reliability energy offer curves that are near the end of the aggregate market offer curves.

  14. Proposal on how to minimize price impacts • ERCOT’s proposed solution at a high level is: 1- Create reliability energy offer curves as follows: • At the end-of Adjustment period, ERCOT calculates the price at 90% of the total capacity for the COP Online Quick Start Offer Curves in the upcoming Operating Hour (90% or agreed to %). This will be the offer floor for the Non-Spin segment of the EOC. • Offer Curves are modified by SCED • For Offline Non-Spin by applying the offer floor from LSL to HSL • For Online Non-Spin by applying offer floor to the segment of the curve from (HSL – sum of all AS responsibility) to HSL • In this manner, ERCOT will give a dispatch economic order preference to market resources • Non-spin energy is inserted in the offer stack above competitive offers

  15. Proposal on how to minimize price impacts • ERCOT’s proposed solution at a high level is: 2- Prevent the block of energy at LSL injected by reliability resource from decreasing the prices • Introduce a price adder with an extra step in SCED to offset/wash-out the potential price reversal • Will compute prices without LSL impact of offline non-spin • Will compute normal dispatch solution with prices and base points • Difference in the two computations becomes the dynamic adder to all prices • LMP = system lambda –SF*(shadow price) + dynamic adder

  16. Summary and other considerations… • In summary: • Mitigates the effect of LSL energy block deployment on prices • Allows the market to determine the prices dynamically • no administrative pricing • The mechanics of solving congestion do not change • Maintains existing operational deployment procedure, thus no degradation of reliability • ERCOT has not evaluated: • Technical feasibility and/or performance impacts to SCED • Protocol development required • Project cost and timeline for potential delivery not considered

More Related