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Noting "Major" Software Projects to Start in 2014, ERCOT Reports Full Co-optimization Would Take Over Three Years to Implement
ERCOT and the Independent Market Monitor have filed a report with the Public Utility Commission of Texas concerning Real-Time Co-optimization of Energy and Ancillary Services in the ERCOT Markets
The report describes the different qualitative benefits of the two approaches under consideration for Real-Time Co-optimization of energy and Ancillary Services: the "minimum" approach, which co-optimizes on a single-interval basis; and the "maximum" approach which incorporates a multi-interval Real-Time Commitment and Real-Time Dispatch.
"However, we are not able to analyze or calculate the quantitative benefits compared to the estimated costs of each approach and believe it may be difficult for any independent consultant to do so as well," ERCOT and the IMM said.
ADVERTISEMENT While ERCOT and the IMM agree that the Operating Reserves Demand Curve, as currently being implemented, may be sufficient for the purpose of achieving the operating reserve shortage pricing aspect of Real-Time co-optimization, they noted beneficial elements of full Real-Time Co-optimization that would not be achieved by the implementation of ORDC.
Among other things, because the implementation of the ORDC does not co-optimize energy and operating reserves within SCED, capacity providing regulation and responsive reserves continue to be blocked from economic dispatch in SCED by the resources' High Ancillary Service Limit (HASL). Full Real-Time Co-optimization of energy and Ancillary Services would remove the HASL, thereby allowing market participants to adjust their portfolio of Ancillary Service responsibilities in the most efficient manner possible, via a transparent, centralized market, based on Real-Time conditions, and also allowing SCED automatic access operating reserves to provide energy when required without manual reserve deployments by the system operators.
ERCOT and the IMM also noted that ERCOT staff has published a concept paper identifying the key aspects of future Ancillary Services (AS) and has begun working with stakeholders to develop a set of services tailored to the needs of a system with an evolving resource mix. "The proposed AS product set contemplates a more complex set of deployment characteristics for resources providing AS ... and Real-Time Co-optimization would prove even more valuable when the AS product set and resource mix is more diversified and flexible," ERCOT and the IMM said.
"For now, ERCOT defers any specific estimates on system impacts related to the simultaneous implementation of Real-Time Co-optimization and the proposed AS product set, at least until the parameters of the AS product set are finalized," ERCOT and the IMM said.
"The Commission nonetheless should be aware that several ongoing projects -- which are designed to improve and upgrade internal systems and reduce operation and settlement risk -- are likely to be impacted by implementation of co-optimization," ERCOT and the IMM said.
"It is also important to note that either the 'minimum' or 'maximum' versions of full co-optimization can be expected to take more than three years," ERCOT and the IMM said.
"It is important to note that ERCOT has in-flight projects that could be impacted by a major market redesign effort depending on the timing of the redesign. There are a number of efforts planned to be started in 2014 and 2015 that would be similarly impacted. These projects are in the key areas of energy management, market management, and financial settlements. The delivery timeline for these projects stretch from those that would go live in the near term to those that are expected to be delivered in the fall of 2016. There are also twenty-one (21) Board-approved market-driven initiatives that could be impacted depending on the timeline of a market redesign. It is assumed that IT Technical Foundation projects would be able to continue along with a market redesign," ERCOT and the IMM said.
"There are three major internal software upgrade projects that are most likely to be impacted by a market redesign effort: Energy Management System (EMS) Upgrade, Market Management System (MMS)/Outage Scheduler (OS) Technical Refresh, and Settlements System Upgrade. These projects are strategically important to ERCOT to ensure the operational health of the systems and delays to these efforts should be considered very carefully. These applications form the foundation of the generation, transmission, and financial elements of ERCOT," ERCOT and the IMM said.
"Finally, ERCOT and IMM note that an additional option may be worth considering -- a market construct with multi-interval Real-Time Commitment and Dispatch incorporating the already-approved reserve price adder based on ORDC, while foregoing the more complex challenges of Real-Time energy and Ancillary Service co-optimization. This approach could potentially have lower implementation costs and provide most of the benefits of the 'maximum' approach -- better scarcity pricing and Load Resource and short notice Generation Resource participation in Real-Time energy price formation."
The report was filed in Project 41837
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December 13, 2013
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Copyright 2010-13 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com
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