ancillary services analysis · 2014-06-23 · ancillary services costs to wind generators at ......
TRANSCRIPT
Considerations in opposition to the Wholesale Market Subcommittee recommendation of the Reliant proposal for
assignment of ancillary services costs to wind generation
presented to the
ERCOT Technical Advisory Committee
March 4, 2010
1
data source: ERCOT
$-
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
$80,000,000
$90,000,000
$100,000,000
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
Inst
alle
d W
ind
Cap
acit
y (M
W)
wind capacity Total $ spent for all services
Combined cost per month for URGS, DRGS, NSRS, and RRS (March 2008-Dec. 2009)
source: Potomac Economics, 2008 ERCOT State of the Market Report, p. 3
4source: Potomac Economics, 2008 ERCOT State of the Market Report, p. 33.
5
source: Market Operations Report to the ERCOT Board of Directors, Jan. 19, 2010
6
Comparisons of installed wind capacity vs. monthly volume procured for Reg Up, Reg Down, NSRS, and RRS (March 2008-Dec. 2009)
0
100,000
200,000
300,000
400,000
500,000
600,000
0
2000
4000
6000
8000
10000
Mar
-08
May
-08
July
-08
Sep
-08
No
v-0
8
Jan
-09
Mar
-09
May
-09
July
-09
Sep
-09
No
v-0
9
MW
Re
g U
p
MW
inst
alle
d w
ind
wind capacity Reg Up
0
200,000
400,000
600,000
800,000
1,000,000
0
2000
4000
6000
8000
10000
Mar
-08
May
-08
July
-08
Sep
-08
No
v-0
8
Jan
-09
Mar
-09
May
-09
July
-09
Sep
-09
No
v-0
9
MW
NSR
S
MW
inst
alle
d w
ind
wind capacity Non-Spin
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
0
2000
4000
6000
8000
10000
Mar
-08
May
-08
July
-08
Sep
-08
No
v-0
8
Jan
-09
Mar
-09
May
-09
July
-09
Sep
-09
No
v-0
9
MW
RR
S
MW
inst
alle
d w
ind
wind capacity Responsive
Wind generation has had limited impact on ancillary services procurement
In November 2008, ERCOT modified the methodology for procurement of NSRS to account for net load uncertainty. No other
ancillary services procurement methodologies have been modified due to wind penetration on the system. As the charts below
illustrate, the monthly procured volumes of capacity services have remained relatively stable with the exception of NSRS.
0
100,000
200,000
300,000
400,000
500,000
600,000
0
2000
4000
6000
8000
10000
Mar
-08
May
-08
July
-08
Sep
-08
No
v-0
8
Jan
-09
Mar
-09
May
-09
July
-09
Sep
-09
No
v-0
9
MW
Re
g D
ow
n
MW
inst
alle
d w
ind
wind capacity Reg Down
data source: ERCOT
Comparisons of installed wind capacity vs. average daily price per MW for Reg Up, Reg Down, NSRS, and RRS (March 2008-Dec. 2009)
Cost per MW for capacity services has decreased as wind capacity has increased
The average daily price per MW for capacity services has generally declined from a multi-year peak in April-June 2008 even as
installed wind capacity has increased approximiately 3,400 MW. Note the fluctuations in per MW cost of NSRS do not synch
with the Nov. ’08 methodology change. Also note the one service with a wind consideration added to the procurement
methodology has been and still remains the least expensive of the market-based capacity services.
data source: ERCOT
7
$-
$10.00
$20.00
$30.00
$40.00
$50.00
0
2000
4000
6000
8000
10000
Mar
-08
May
-08
July
-08
Sep
-08
No
v-0
8
Jan
-09
Mar
-09
May
-09
July
-09
Sep
-09
No
v-0
9
MW
wind capacity Reg Up
$-
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
0
2000
4000
6000
8000
10000
MW
wind capacity Reg Down
$-$2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00
0
2000
4000
6000
8000
10000
Mar
-08
May
-08
July
-08
Sep
-08
No
v-0
8
Jan
-09
Mar
-09
May
-09
July
-09
Sep
-09
No
v-0
9
MW
wind capacity Non-Spin
$-
$10.00
$20.00
$30.00
$40.00
$50.00
0
2000
4000
6000
8000
10000
MW
wind capacity Responsive
Comparisons of installed wind capacity vs. monthly cost of Reg Up, Reg Down, NSRS, and RRS (March 2008-Dec. 2009)
Total ancillary services costs have decreased as wind capacity has increased
Ancillary services pricing outcomes through much of 2009 trended downward even as installed wind capacity significantly
increased. As the charts below illustrate, the combined monthly costs of Regulation, Non-Spin, and Responsive fell from a June
2008 high of $85.7 million to a Sept. 2009 low of $10.4 million while installed wind increased 3,000 MW during those months.
data source: ERCOT
8
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
0
2000
4000
6000
8000
10000
Mar
-08
May
-08
July
-08
Sep
-08
No
v-0
8
Jan
-09
Mar
-09
May
-09
July
-09
Sep
-09
No
v-0
9
MW
inst
alle
d w
ind
wind capacity Reg Up
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
0
2000
4000
6000
8000
10000
Mar
-08
May
-08
July
-08
Sep
-08
No
v-0
8
Jan
-09
Mar
-09
May
-09
July
-09
Sep
-09
No
v-0
9
MW
inst
alle
d w
ind
wind capacity Reg Down
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
0
2000
4000
6000
8000
10000
Mar
-08
May
-08
July
-08
Sep
-08
No
v-0
8
Jan
-09
Mar
-09
May
-09
July
-09
Sep
-09
No
v-0
9
MW
inst
alle
d w
ind
wind capacity Non-Spin
$-
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
0
2000
4000
6000
8000
10000
Mar
-08
May
-08
July
-08
Sep
-08
No
v-0
8
Jan
-09
Mar
-09
May
-09
July
-09
Sep
-09
No
v-0
9
MW
inst
alle
d w
ind
wind capacity Responsive
9source: Potomac Economics, 2008 ERCOT State of the Market Report, p. 29
10
11
12
a better
approach
13
Recommended motion for adoption by TAC
TAC declines to endorse either of the WCATF options for assignment of
ancillary services costs to wind generators at this time.
TAC recommends to the ERCOT Board of Directors that further discussion of
possible assignment of ancillary services costs to market participants based
on cost causation principles be tabled until such time as sufficient volume
and quality of data from nodal market operations is available to inform the
discussion.
In the interim, TAC directs its subcommittees, working groups, and task
forces to continue the work of addressing the planning and operational
challenges of integrating wind and other renewable technologies as
appropriate within the constraints imposed by the zonal to nodal market
transition effort.