01a_Wholesale.pptx

EE362G - Smart Grids:
How Smart Are We Today
Ross Baldick,
Department of
Electrical and
Computer
Engineering
1
Copyright © 2019
David Maggio,
ERCOT, Inc.
Spring 2019

Outline
 Overview of ERCOT
 Communication
 Day-ahead and leading up to the operating
hour
 Real-time operations
 Current and near-term discussion
 Thoughts and questions
2
Copyright © 2019

Outline
 Communication
hour
3
Copyright © 2019

ERCOT Overview
 ERCOT’s primary responsibilities:
 System reliability, both in the planning and
operations horizons
 Operation and settlement of the wholesale
electricity market
 Retail switching process for customer choice
 Open access to transmission
4
Copyright © 2019

ERCOT Overview
5
Copyright © 2019

ERCOT Overview
6
Copyright © 2019

Outline
 Communication
hour
7
Copyright © 2019

Communication
 Acronyms for market participant types:
 Qualified Scheduling Entities (QSEs)
 Transmission Service Providers (TSPs)
 These entities play a significant role in the
ERCOT communication process and will be
discussed later in the presentation.
Copyright © 2019 8

Communication
 Who is ERCOT communicating with?
Copyright © 2019 9

Communication
 QSEs are the market participants that
actively participate in the Day-Ahead
and Real-Time Markets.
 May represent:
 Resource(s)
 Load
 Power marketer
 List of ERCOT market participants
Copyright © 2019 10

Communication
 Three primary modes of communication with market
participants:
 Inter-Control Center Communications Protocol (ICCP)
 Standard used for communications between control centers
 Market Information System (MIS)
 Public communication
 Operators also will communicate verbally, particularly during
emergencies.
 Done through dedicated lines on a private network

Communication
 ERCOT communicates using ICCP with QSEs and TSPs.
 ~125k ICCP points going between ERCOT and the market
participants
 Hundreds of resources and QSEs
 i.e., 36 points of data between a QSE and ERCOT for a
single resource
 Shared at a rate between 2 and 10 seconds
 Data is sent out and received as packets across a private
network

Communication
 Data elements include:
 Economic base-points
 i.e., target net generation levels for individual resources for the end
of the current 5-minute interval
 Based on resource-specific economics
 Reserve deployments
 Settlement Point Prices
 Resource/equipment power flows
 Resource/equipment conditions, i.e., operating states, limits, etc.
 Including information about dynamically rated transmission lines

Communication
 Telemetry from the QSEs and TSPs has a direct and
indirect impact on all of the energy and market
management system applications.
 As a result, so do any issues within the telemetry.
 It is critical to maintain good quality telemetry to
support reliability and minimize market impacts.
 All points have validation checks, such as comparison against
reasonability limits.
 However, this does not eliminate issues.

Communication
 ICCP communication occurs using ERCOT’s Wide Area
Network (WAN)
 Participants whose facilities connect to ERCOT WAN have
a number of responsibilities, notably compliance with
Critical Infrastructure Protection requirements
 ERCOT is responsible for installing and maintaining
equipment, and is reimbursed by the entities
 These responsibilities and costs may not be things that all
parties are able or willing to deal with
 For example, an individual homeowner
 An “aggregator” may be willing to step into this role

Communication
 The MIS
 Web-based interface
 Communication link to the public and/or
market participants
 As a group (public and secure reports that are
more generally applicable)
 Individually (certified reports that are specific and
perhaps confidential)

Communication
 The MIS provides a wealth of information:
 Dashboards on real-time grid conditions
 Forward market results
 Transmission planning models
 Settlements extracts
 Rules and user guides for market participants
 Data is often left in a relatively raw format to
allow users to incorporate the information into
their analytical tools

Communication

Communication
 The public site and other communication
 www.ercot.com
 Social media
 Mobile app
 Market notices
 Mailing lists

Outline
 Communication
hour
21
Copyright © 2019

Day-Ahead and Leading Up to
the Operating Hour
Congestion
Revenue Rights
Day-Ahead
Market
Reliability Unit
Commitment
Adjustment
Period
Real-Time
Operations

Day-Ahead
 The Day-Ahead Market (DAM)
 Mixed Integer Program used for co-optimizing awards for
wholesale energy bids and offers, Ancillary Service offers and
Point-to-Point Obligation bids across all 24 hours of the day
 Note that Point-to-Point Obligations are financial instruments used for
hedging or speculating on congestion in the wholesale markets
 Objective is to maximize bid-based revenues minus offer-
based costs
 DAM is voluntary but financially binding
 Execution begins at 10 a.m. and takes at least 2.5 hours to
post to the market

Day-Ahead
 The DAM
 How many bids and offers looking across the day and 200+ entities
(using averages from December)?
 ~13k Point-to-Point Obligation bids
 ~1.5K energy-only bids and offers
 ~200 three-part offers
 Transactions can be for 1, multiple or all hours of the day
 Need to decide how to award these transactions taking into
consideration transmission and resource limitations, plus changing
topology, unit commitment, etc.
 8 virtual CPUs and 80GB of memory allocated for the process

Day-Ahead
 The number of transactions in the DAM continues to grow
0
5,000
10,000
15,000
20,000
25,000
30,000
Trend of Transactions in the DAM
Energy-Only Bids Energy-Only Offers
Three-Part Offers Point-to-Points

Leading Up to the Operating
Hour
 Information coming in, generally with granularity of an
hour:
 Demand forecasts
 Multiple models being executed in parallel
 Support includes on-staff meteorologist
 Resource operating plans, bids and offers
 Including multiple renewable resource forecasts
 Network topology information
 Transmission and resource outages
 Historical and current grid conditions

Hour
 How that information is used includes:
 Reliability Unit Commitment (RUC)
 Supplemental Ancillary Service Markets (SASMs)
 Power-flow, voltage stability, short-circuit ratio
analysis

Hour
 RUC
 RUC is a process performed by ERCOT to evaluate if there
is adequate resource and reserve capacity in the proper
locations to meet expected demand
 Answers the question:
 Now that the QSEs have started making operational
decisions for their own resource fleets and are updating their
resource plans, does the system have what it needs to meet
ERCOT’s forecasts for energy demand without having
transmission congestion issues?
 Different than the DAM where the demand and supply of
energy is based on bids and offers, not forecasts within
ERCOT’s systems

Hour
 RUC
 The general philosophy is to let the market make commitment
decisions for their fleet
 The process is using various inputs to determine if additional
commitments are needed
 ERCOT attempts to defer sending out commitment instructions as
long as possible
 Largely driven by the lead time of the particular resource

Hour
 RUC
 Considering 4,800+ contingencies and the planned
operating state of all online resources to evaluate pre- and
post-contingency conditions on power grid
 When needed, the system then identifies a least cost
solution to resolve load and system-wide concerns using
resource costs and temporal constraints
 The cost of short lead-time (<= 1 hour) resources are scaled down
so that the optimization tends to prefer those resources, thus
allowing more time for the market to respond
 The process primarily occurs in the day ahead and hourly
throughout the operating day, and solves in approximately
10 to 15 minutes

Hour
 SASMs
 Ancillary Services are services provided by market
participants to support a reliable, continual supply
of electric power
 This includes during and following system disturbances (i.e., a
large generator trip or sudden, unforeseen changes in demand)
 Ancillary Services are a market opportunity for
resources in addition to solely providing energy
 These services are typically procured in the Day-
Ahead Market, but may be procured via a SASM
under certain unexpected conditions

Outline
 Communication
hour
32
Copyright © 2019

Real-Time Operations
 Understanding the current system state
 State estimator
 Combines real-time telemetry and network topology to
determine where we are
 ERCOT does not receive telemetry for the flow on all
equipment, so gaps must be estimated
 Over 9,000 lines and transformers, plus all the associated
circuit breakers, switches, etc.
 State estimator also helps identify errors
 i.e., incorrect telemetry or modeling errors
 Re-evaluating the system state at least every 5 minutes

 Understanding the current system state
 Real-time contingency analysis
 Executing AC power-flow studies for ~7,400
contingencies
 Identifies thermal and voltage concerns across all the
transmission lines, transformers and electrical buses (69
kV and above )
 A “concern” is based on thresholds entered by the system
operator
 Provides resource sensitivity information for the
identified transmission constraints
 Also, re-evaluates potential congestion issues at least
every 5 minutes

 Simplifying the equations
 The Resource Limit Calculator is used to simplify
all resources down to a high and low dispatch limit
constraint
 Executed every 4 seconds
 Evaluating local market competitiveness every 5
minutes using a Constraint Competitiveness Test
 Determines which resources are flagged for real-time
offer mitigation

 Security-Constrained Economic Dispatch (SCED)
 600+ resources each having multiple optimization constraints,
typically
 0-20 transmission constraints
 The sensitivities of all the resources relative to the transmission
constraints are pre-determined for SCED
 Optimization solves in seconds in determining economic base-
points and prices for all resources
 This includes at least two executions of SCED
 Majority of SCED execution time is for writing and reading of
data between systems

 SCED
 Automatically executed every 5 minutes, but
can be initiated at any time
 Can be manually or automatically triggered following
a frequency event (i.e., a large unit trip)
 As part of outputs, ERCOT posts Locational
Marginal Prices (LMPs) for all electrical busses
 Not just for resources, hubs and load zones
 Also occurs within the overall SCED process that
takes 10 to 30 seconds
 13k+ points on the system

 Monitoring the system between SCED dispatch intervals
 Frequency and area control error
 Responses to SCED instructions
 Reserves
 Ancillary Services, Physical Responsive Capability,
capacity available for economic dispatch, etc.
 Forced outage detection
 Current statuses of equipment vs. planned state
 State of applications (i.e., last run time)

 Deployments between SCED dispatch
intervals
 Regulation Services, including fast response
regulation
 Responsive Reserve Services
 Automatic actions being taken by market
participants (i.e., governor response, frequency
relay trips, TSP remedial action schemes)

 Participants may also be responding to
market incentives other than SCED
instructions and prices
 Four Coincidental Peak (4CP) incentives
 Emergency Response Services and programs
 Other passive demand or Distributed Energy
Resource response

0
500
1,000
1,500
2,000
MW
Reduction
MW Reductions for 4-CP and Near 4-CP Days
2014 - 2017
Near 4-CP Days* 4-CP Days Year Month Linear Trend

0
500
1,000
1,500
2,000
2,500
3,000
1,800
1,850
1,900
1,950
2,000
2,050
2,100
$/MWh
MW
Estimated Distributed Energy Resource Response
for July 19, 2018
Estimated Load w/o DER Deployed
Load w/ DER Deployed
System Lambda
Aggregation of ~100 DERs located behind 93 unique transmission-level loads

Current/Near-Term Discussions
 How to engage current programs/resources in
the wholesale market
 Engagement in price formation
 Distributed energy/demand-side resources
 The Ancillary Services markets
 Changes to the service types
 Real-Time Co-Optimization of energy and Ancillary Services
 Changes to scarcity pricing (Operating Reserve
Demand Curve)

 What’s potentially limiting progress of the
increased engagement
 Historical energy and reserve prices
 Exposure to real-time, nodal pricing
 Cost and/or ability of technology to fit into the
current market design
 These may be things an aggregator is willing to take on

 Peaker Net Margin (PNM)
 PNM is a value calculated by ERCOT that accumulates
during the year and is updated daily for market
participants on the MIS
 One of the purposes of PNM is to provide an estimate
of the annual net revenue of a hypothetical
combustion turbine with a heat rate of 10
MMBtu/MWh in the ERCOT market

 The annual PNM value for 2018 was 62.2k $/MW (through Dec. 21, 2018)

Summary
 Sophisticated systems are in place at the system
operator level
 Volume of data
 Calculations for monitoring and operation
 How can new technologies and systems be joined
with the system operator, and at what level do they
need to be integrated?
 Are policy or market design changes needed to get
us there? If so, what are they?
52
Copyright © 2019

Homework Exercises:
Due Thursday 2/7
3. Calculating a PNM for ERCOT in 2018 using data from the ERCOT
website
 Use the settlement interval prices for 2018, available in the
“Historical RTM Load Zone and Hub Prices” report on the ERCOT
website (file ending in “RTMLZHBSPP_2018.zip”)
 Calculate PNM assuming a Fuel Index Price of 3.35 $/MMBtu.
What is the aggregated annual value for 2018?
 The calculations should be performed using the settlement point name
“HB_HUBAVG”
 Perform the calculation again and change the 10 MMBtu/MWH
assumption in the POC value from 10 to 9. What is the new
aggregated annual value for 2018? In what direction did the value
change, and what does this signify for the hypothetical combustion
turbine?
54
Copyright © 2019

Homework Exercises:
Due Thursday 2/7
4. Evaluation of ERCOT Load Zone wholesale energy prices in 2018
using data from the ERCOT website
 Again, use the settlement interval prices for 2018, available in the
“Historical RTM Load Zone and Hub Prices” report on the ERCOT
website (file ending in “RTMLZHBSPP_2018.zip”)
 Calculate simple average Load Zone prices for the year 2018 for each
of the 8 Load Zones in the ERCOT region. What is the reason for
differences in the values between the Load Zones?
 To get prices for only the Load Zones, filter the data for the settlement
point type of “LZ”
 Based solely on the simple average Load Zone wholesale prices for
2018, which of the 8 Load Zones would be “best” for placement of a
demand-side Resource? What led you to that conclusion?
55
Copyright © 2019

01a_Wholesale.pptx

Recommended

Recommended

More Related Content

Similar to 01a_Wholesale.pptx

Similar to 01a_Wholesale.pptx (20)

Recently uploaded

Recently uploaded (20)

01a_Wholesale.pptx