ERCOT staff and stakeholders began the long process of implementing real-time co-optimization (RTC) last week with the first meeting of the Real-Time Co-Optimization Task Force.
The group spent its Thursday meeting reviewing ERCOT’s current market design and the changes that RTC will necessitate. ERCOT Compliance Director Matt Mereness, the task force’s chair, said it’s important to understand the elements in RTC’s high-level design principles in order to better understand what is being implemented.
“We have a mandate to implement real-time co-optimization, and we will be working to see what market functions have to be changed to enable that,” Mereness said.
RTC is supposed to efficiently coordinate the provision of energy and ancillary services (AS) in the real-time market and price AS shortages according to their defined demand curves. Its elements include: real-time market and AS deployment; reliability unit commitment; day-ahead market operations; internal and external reporting; and performance monitoring.
Implementation of the process will mean the loss of ERCOT’s supplemental AS market.
The Texas Public Utility Commission directed ERCOT to implement RTC earlier this year (Project 48540). The grid operator has said it will take four or five years and about $40 million to add RTC to the energy-only market.
Bryan Sams, director of regulatory affairs for Lone Star Transmission, is serving as the RTCTF’s vice chair. The group is composed of stakeholders and staff from ERCOT, the PUC, the Independent Market Monitor and the Office of Public Utility Counsel. The task force will report directly to the Technical Advisory Committee.
ERCOT to Ask Board for NPRR916 Changes
ERCOT will ask its Board of Directors during its bimonthly meeting Tuesday to accelerate the implementation date for a previously approved Nodal Protocol revision request (NPRR) and to change its mitigated floor offer as a result of negative gas prices.
The TAC endorsed NPRR916 on March 27. The change sets the mitigated offer floor to $0/MWh for “combined cycle” (CCGTs) and “gas/oil steam and combustion turbine” (CTs) resource categories, replacing the fuel index price-based (FIP) calculation. The change also eliminates the grey-boxed language from NPRR664.
During a Thursday webinar, staff explained that negative fuel prices at the Waha Hub coupled with mitigated floor offers are creating “irrational restrictions” for CTs and CCGTs. When gas prices are negative, a floor of zero is excessive relative to the resource’s optimal offer, staff said.
ERCOT wants to change the offer floor to -$20/MWh, aligning CTs and CCGTs with coal and lignite units’ offer floor.
The grid operator also wants to move up implementation of NPRR916 from May 1 to April 10. Staff said West Texas fuel prices support the need to “make this system adjustment as soon as practicable.” The proposed change to -$20 requires modifications to ERCOT systems that would become effective upon system implementation.
The current floor for CCGTs is set at 1 MMBtu/MWh x FIP, and 6 MMBtu/MWh x FIP/FOP (fuel oil price) for CTs and gas and oil steam turbines. NPRR916 changes those numbers to a straight value of $0/MWh.
The NPRR916 changes are expected to cost less than $10,000 and will be absorbed by ERCOT’s operations and maintenance budgets, staff said.
— Tom Kleckner
