ERCOT Board of Directors Briefs: Aug. 13, 2019

Directors Briefed on Real-time Co-optimization Work

Aug 16, 2019 | Tom Kleckner

ERCOT’s Board of Directors got a look at the work implementing real-time co-optimization, which will add ancillary services to the real-time SCED engine.

ERCOT’s Board of Directors on Tuesday got its first look at the work being done to implement real-time co-optimization (RTC), which will add ancillary services to the real-time security-constrained economic dispatch engine.

ENGIE’s Bob Helton, who chairs the Technical Advisory Committee, and Matt Mereness, ERCOT’s compliance director and chair of the Real-Time Co-Optimization Task Force, briefed directors on the intricate design work and approval process during the board’s bimonthly meeting.

“We’re on our way,” Helton said. “We’ve got a long road to go. It’s a very tight schedule, but there are a lot of meetings to try and get this through.”

Mereness’ task force faces a February deadline to present a final package of RTC principles to the board for approval. Once consensus is reached on the design, the group will begin drafting the protocols, which will set the stage for the 2.5 to 3.5 years of implementation. ERCOT has estimated the project will take four or five years to complete.

The TAC last month approved the task force’s first five RTC key principles. (See “TAC Approves First Real-time Co-optimization Principles,” ERCOT Technical Advisory Committee Briefs: July 24, 2019.)

“We’re not focused on the protocols yet,” Mereness said. “We’re determining the building blocks for real-time co-optimization.”

Helton was quick to say the RTC implementation would not follow the same course as ERCOT’s nodal market project, which was marred by cost overruns and blown timelines before going live in December 2010.

“Give me some comfort that we’re going to design the system, harden that and stop people from hanging their ornaments on the Christmas tree before we start building it,” said Director Clifton Karnei, general manager of Brazos Electric Power Cooperative and representative for the Cooperative market segment.

Claiming Karnei had stolen his words, Helton said, “What we’re trying to do is real-time co-optimization and not redesign the market. That nodal stuff was painful.”

Board Vice Chair Judy Walsh asked Mereness how the task force would respond when it gets stuck on an issue.

“We won’t be stuck silently,” Mereness responded. “If we get stuck, we’re going to let people know.”

IMM: Wind not Outpacing Coal — Yet

Responding to a recent spate of media articles noting that wind generation is outpacing coal generation in ERCOT, Independent Market Monitor Beth Garza tapped the brakes on what she said was a “zeitgeist” moment.

“There were a zillion articles over how wind has surpassed coal,” she said during her midyear market review. “That was absolutely true year-to-date through June. It’s no longer true through July.”

Garza said coal generation reasserted itself over wind generation in July. Coal now accounts for 21.1% of the fuel mix and wind 20.7% through July, she said.

“I do believe at one point, there will be more wind generation than coal generation in ERCOT, because we are very, very close now,” Garza said. She noted the switch is more about a decrease in coal generation, than an increase in wind.

Garza said ERCOT’s average energy prices are down through the first half of the year when compared with 2018 — $27.81/MWh versus $32.45/MWh — despite similar load conditions. She attributed the decrease to a 13% decrease in gas prices, which averaged $2.62/MMBtu through July, compared to $3.03/MMBtu in the first half of 2018.

Lange Approved as TAC Vice Chair

The board formally approved Clif Lange, South Texas Electric Cooperative’s manager of wholesale marketing, as TAC vice chair. Lange replaces Diana Coleman, who stepped down from the TAC when she accepted a position with San Antonio’s CPS Energy.

“We appreciate your willingness to serve,” board Chair Craven Crowell told Lange.

The directors also approved the Finance and Audit Committee’s recommendation to accept Maxwell, Locke & Ritter’s audit report of ERCOT’s 401(k) savings plan. The auditors said they were unable to obtain “sufficient appropriate audit evidence to provide … an audit opinion,” noting they were told not to audit, but did accept the plan’s investments and notes receivable. That information was certified by Fidelity Management Trust Co., the plan’s trustee.

Board OKs 14 Changes

The board approved a Nodal Protocol revision request (NPRR917) that replaces load zone energy pricing with nodal pricing for settlement-only distribution and transmission generators (SODGs and SOTGs). The NPRR allows SODGs and SOTGs to request ERCOT continue to provide them load zone pricing until they opt in for nodal pricing or until Jan. 1, 2030, whichever comes sooner.

The directors unanimously approved their consent agenda, which included nine other NPRRs, a change to the Nodal Operating Guide (NOGRR), an Other Binding Document (OBDRR) and two system change requests (SCRs):

- NPRR823: Synchronizes the protocols’ “affiliate” definition with state law to allow exemptions for portfolio affiliates (two or more publicly traded companies in the same industry with common shareholders).
- NPRR904: Revises the categories of ERCOT-directed actions that trigger the real-time online reliability deployment price adder (RTRDPA) pricing run to include DC tie-related actions to reflect current system conditions and corrects identified flaws with current RTRDPA design.
- NPRR931: Modifies the hub average 345-kV price calculation to reflect the use of aggregated shift factors, as opposed to simple averaging of the component hubs’ prices.
- NPRR932: Clarifies that new load added to an existing ERCOT system zone (including load from a non-ERCOT control area) can take effect immediately without board approval.
- NPRR935: Requires ERCOT to post values for wind and solar forecasts and include an indication of which model is being used for each forecast. Also requires ERCOT to issue a market notice and sponsor an NPRR proposing requirements for any new future forecasts.
- NPRR942: Clarifies in the protocols the timing of the posting of the final allocated transaction limit for the congestion revenue rights auction, also known as the second-round limit.
- NPRR943: Adds Martin Luther King Jr. Day to the list of ERCOT-observed holidays.
- NPRR944: Updates the day-ahead market’s energy bid curve criteria language to align with current validation.
- NPRR949: Removes the use of standard voice telephone circuits as an option for the grid operator to retrieve ERCOT-polled settlement meter data, effective Jan. 1, 2023.
- NOGRR187: Aligns the NOG with NPRR863’s revisions to ancillary services.
- OBDRR009: Paired with NPRR904, the change revises the online and offline capacity reserves for out-of-market actions related to DC ties, preventing price reversal and price distortion whenever ERCOT makes out-of-market actions.
- SCR801: Corrects the global process ID for Texas standard electronic transaction (Texas SET) 867_03 by applying the same data lifecycle cross-reference consistency for all 867-03 usage transactions.
- SCR802: Improves system inertia communications by showing the real-time system inertia value under the Real-Time System Conditions display on the ERCOT website.