07/27/2006

Overview of Replacement Reserve Procurement

ERCOT Staff

PRS RPRS Task Force

207/27/2006

RPRS Objectives

Procure capacity from which energy would be available to solve the following power system security violations:– System Capacity insufficiency

• Using any RPRS bid (or Generic for units with no bids)

– Zonal Congestion• Using RPRS bids by Zone in Merit Order (or Generic

for units with no bids)

– Local Congestion• Using Resource Category Generic Cost

307/27/2006

Three Step Clearing Process

Three Step Clearing Process

Step 1: Local Congestion first• only thermal limits, voltage related units are OOMCed before

RPRS

Step 2: Zonal Congestion & System Balance simultaneously

Step 3: MCPC Calculation• Marginal cost for insufficiency determines MCPC• Marginal cost to solve CSC determines Shadow Price for

Capacity for CSC Congestion

407/27/2006

RPRS Participation

Capacity procured from:

– Generation Resources Off-line.

– Generation Resources expected to be Off-line in the requested hours

– LaaRs not able to participate upon initiation of the RPRS functionality.

507/27/2006

RPRS Capacity Procurement

Scheduled

On-line

Capacity

Day

Ahead

Forecast

Load

Regulation &Responsive

607/27/2006

RPRS Inputs

Inputs– Resource Plans (at time of procurement)

• HSL• LSL

– Day Ahead Load Forecast– QSE Schedules (at time of procurement)– Reserves– Transmission Limits

707/27/2006

RPRS Clearing

The goal of the RPRS Clearing Engine is 24 Hour Optimization to minimize total cost, based on:

• Resource Category Generic Cost• RPRS Bid Price• Resource Shift Factors

And also respect;• Lead time• Minimum Up time• Minimum Down time

For the whole Operating Day while meeting security constraints for each hour.

807/27/2006

Outstanding RPRS Issues being Addressed by WMS RPRS TF

Combined Cycle Combustion Turbines Procurement

Zonal RPRS Market Procurement

Consideration of Joint Owned Units in RPRS Market

Issues with Black Start Units in RPRS Market

RPRS Procurement and Non Spinning Reserves Units

907/27/2006

PRR659- Reporting of ERCOT Replacement Reserve Service Procurements

“ERCOT shall provide a monthly report by the 20th day of the following month showing the quantity of RPRS procured by hour for system capacity based on the Day Ahead estimate of total ERCOT Load versus the quantity of RPRS that, in hindsight, would have been the proper amount to procure based on actual average adjusted metered Load. This theoretical amount of RPRS procurement shall be calculated as the difference between the actual average adjusted metered ERCOT Load (for an hour) minus the Day Ahead Resource Plan generation On-line used before the RPRS market is run for the hours when RPRS is procured by ERCOT.”

1007/27/2006

Response to PRS RPRS TF Question 1

Question 1:

How does ERCOT consider Load forecast and corresponding standard deviation adjustment?

Answer:

When procuring RPRS, ERCOT system utilizes the recent Load forecast produced by the mid-term Load forecast tools.

1107/27/2006

Response to PRS RPRS TF Question 2

Question 2:

How are the Resource Plan inputs used in RPRS procurement?

Answer:

The available High Sustained Limit (HSL) as indicated in the Resource Plan is considered in the RPRS procurement process; those Off-line and available Resources are subject to RPRS procurement.

1207/27/2006

Response to PRS RPRS TF Question 3

Question 3:

Step 1 procurement to resolve Local Congestion vs. the Resource Plan submitted

Answer:

When the RPRS engine requires that ERCOT procure capacity in Step 2, the step one Local Congestion procurement will be considered as On-line and available capacity.

In other words, both the Resource On-line capacity and step 1 Local Congestion procurement are considered in the step 2 capacity procurement process.

1307/27/2006

Response to PRS RPRS TF Question 4

Question 4:

RPRS procurement for additional capacity vs. the Resource Plan submitted

Answer:

This questions is similar to Question 3.

When the RPRS engine analyzes whether to procure additional capacity, it considers all the On-line capacity as indicated in the Resource Plan and Step one Local Congestion RPRS procurement.

1407/27/2006

Response to PRS RPRS TF Question 5

Question 5:

What is the effect of schedule mismatches on RPRS procurement?

Answer:

No impact, schedule mismatches are not considered in the RPRS procurement process.

1507/27/2006

Response to PRS RPRS TF Question 6

Question 6:

What is the effect on RPRS procurement of a QSE scheduling ERCOT as a Resource?

Answer:

RPRS does not consider schedules during procurement, it only considers available online capacity.

If there is enough online capacity scheduled from other QSEs, to cover the forecast load then there is no impact. If, however; many QSEs schedule ERCOT as a resource, it could result in a RPRS procurement.

1607/27/2006

RPRS CASE STUDYFor market day 6/20/2006

(Day with the biggest difference between Day ahead online capacity and actual metered load)

1707/27/2006

6/20/2006 Weather/Load Forecast

• Due to thunderstorms and rain, the Day Ahead weather forecast was 7.5 degrees higher than the actual temperature for the coast (Houston Area),

• As a result, the actual Real Time load was much lower than the Day Ahead forecasted load.

1807/27/2006

System Data for Those Hours with Step 2 Procurement

Hour

Ending

Resource Plan

(MW)

Load Forecast

(MW)

Metered

Load

(MW)

AS requirement (MW)

13:00 55,505 48,940 43,581 2,050

14:00 57,189 51,449 45,910 2,050

22:00 57,451 49,150 44,126 2,090

23:00 51,688 45,643 41,058 2,090

1907/27/2006

Step 1: Solving Local Congestion

Hour

Ending

No. of local violations

No. of Units procured

Cleared MW

Capacity Procured for local

(MW)

13:00 3 3 918 918

14:00 3 3 918 918

22:00 5 11 1,555 1,616

23:00 5 11 2,323 2,345

2007/27/2006

Step 2: Solving capacity insufficiency

Hour

Ending

No. of Units procured

Cleared MW Capacity Procured from step 2

(MW)

13:00 5 404 404

14:00 3 168 168

22:00 2 240 240

23:00 4 420 420

2107/27/2006

Case study: 6/20/2006 HE22:00

1: Resource Plan On-line Capacity2: Load Forecast3: Original Resource On-line Plan Level4: Adjusted Resource On-line Plan Level5: Total Procured Capacity (S1+S2)6: URS+RRS requirement7: RPRS Cleared MW

RRSReq URSReqForecast SystemLoadMaxMWCap

System Capacity Constraints:

1+5 >= 2+6

System Power Balance Constraints:

4+7=2

ForecastSystemLoadDispatchMW

2207/27/2006

Observations

• System capacity constraints can be satisfied most of the time

• Due to Local Congestion, Resources can not always reach maximum output. Like the case shown, On-line Resource dispatch MWs were even reduced

• Thus, ERCOT must procure more Resources to satisfy system power balance constraints

• Minimum up time can also cause additional RPRS procurement