FERC last week accepted SPP’s proposed tariff revisions to add an uncertainty reserve product to its Integrated Marketplace (ER22-914).
SPP said the product will address the need for flexible capacity when realized generation, load and net scheduled interchange deviate from its forecasts. The rising penetration of renewable resources in the RTO’s resource mix has increased the variability that it must manage in its market and reliability operations, it argued.
The RTO will procure uncertainty reserves by reserving a portion of a dispatchable resource’s upward ramping capability to address increasing net obligations in future dispatch intervals.
Resources that can follow real-time dispatch instruction and increase and maintain its output, once the specified output is met, for at least one hour can provide the product. That applies to both online and offline resources.
The grid operator’s resources will make themselves available through self-certification but can opt out with qualification and dispatch status. SPP will derive the value of resources clearing online uncertainty reserve using a loss-of-opportunity metric, similar to how it treats its existing ramp capability-up product. Offline resources offering uncertainty reserves will have an offer cap of $1,000/MW and a $0/MW floor; a demand curve will price the product when its availability on the system is scarce.
The RTO will impose a nonperformance penalty on resources when cleared real-time uncertainty reserves does not operate in a responsive manner.
SPP’s Market Monitoring Unit intervened in support of the RTO, saying the changes would significant improvements over manual commitments and will provide a market solution for midterm ramp capacity. That will result in increased flexibility to meet ramping needs, increased price accuracy for online resources and increased price transparency of ramping capacity’s value, the MMU said.
In its Aug. 16 order approving the proposal, FERC agreed with SPP’s request for a placeholder effective date so that it can develop the necessary software changes to implement the revisions. The grid operator expects the changes to be ready later this year and committed to specify the effective date at least 30 days in advance.
The tariff revisions were filed with FERC after the SPP Board of Directors and stakeholders approved the proposal in July 2021 after several years of development. The uncertainty reserve product was one of 21 recommendations made in 2019 by the Holistic Integrated Tariff Team. (See “Uncertainty Product Endorsed,” SPP Markets and Operations Policy Committee Briefs: July 12-13, 2021.)
