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ERCOT Files Presentation Summarizing Preliminary Results Of Reliability Standard Study

"Avoiding All Extreme Magnitude And/Or Duration Events May Require Inordinately High Resource Investment"

June 13, 2023

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Copyright 2010-23
Reporting by Paul Ring •

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ERCOT filed with the Texas PUC a presentation summarizing the preliminary results of ERCOT’s reliability standard study. This presentation will be presented at the June 19, 2023 Reliability and Markets Committee Meeting.

With a simulation year of 2026, ERCOT simulated 24 different Reserve Margin levels, ranging from 9% to 28%, as follows:

‒ Started with November 2022 Capacity Demand and Reserves resources

‒ Wind, Solar, and Batteries were included at their Effective Load Carrying Capacity (ELCC)

‒ Thermal capacity (mainly coal) removed to start at the 9% Reserve Margin level

‒ An increment of generic Combustion Turbine (CT) capacity, 742 MW, added to build up the resource portfolios for simulation

- 1,050 Monte Carlo simulations performed for each resource portfolio

- Initial runs do not fully reflect weatherization standard impacts

ERCOT included the following table of Reserve Margin vs LOLE and Frequency

ERCOT's full presentation can be found here

ERCOT listed Key Takeaways as:

1. Varying Reserve Margin levels in the analysis provide insight into Frequency, Duration, and Magnitude of events.

2. A single metric for Frequency of events will result in a set of events that have a wide range of Duration and Magnitude.

3. Even at 1 in 10 years Frequency (traditionally used LOLE standard) some events will be extreme, illustrating the short coming of just having a Frequency measurement for reliability.

4. Avoiding all extreme Magnitude and/or Duration events may require inordinately high resource investment.

5. Recommend incorporating a risk tolerance metric, like exceedance probability, to appropriately calibrate the reliability standard.

In addition to seeking guidance from the PUC, ERCOT said that, prior to executing further simulations, next steps include making the following model changes:

– Incorporate weatherization standard impacts into the model

– Build a more accurate low temperature vs. thermal outage relationship in the model to improve the representation of winter season impacts to the thermal fleet

– Potentially incorporate the recently proposed ORDC multi-step floor pricing approach

– Align modeled costs to the customer costs realized in E3’s market design study

– Incorporate the impacts of the Firm Fuel Supply Service

– Report findings resulting from PUC and Market Participant feedback to the Board in August 2023.


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