general overview of resource costs by ino gonzález
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General Overview Of Resource Costs By Ino González. Nov 8, 2010. Resource Costs. Resource Costs Proxy for marginal operating costs Fuel Costs Operation and Maintenance (“O&M”) costs. 2. How are Resource Costs Used. Resource Costs - PowerPoint PPT PresentationTRANSCRIPT
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General Overview Of
Resource Costs By
Ino González
Nov 8, 2010
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Resource Costs
Resource Costs• Proxy for marginal operating costs
• Fuel Costs• Operation and Maintenance (“O&M”) costs.
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How are Resource Costs Used
Resource Costs • Used in the three stages of the power generation cycle:
• Startup to LSL◦ Startup Fuel and Incremental O&M
• Operation at LSL◦ Fuel at LSL and Incremental O&M
• Operation above LSL◦ Mitigated Offer Curve for Incremental Cost Above LSL
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Use of Resource Costs in Three-Part Supply Offers
Three Part Supply Offer
• Startup Offer
• Minimum-Energy Offer
• Energy Offer Curve
$/MWh to operate at sustained
level
$ to Startup
$/MWh to operate at given MW
quantities above sustained level
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Offer Caps – DAM and RUC
Cap Supply Offers
• Startup Offer
• Minimum-Energy Offer
$/MWh to operate at sustained
level
$ to Startup
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Real Time Mitigation
Cap Supply Offer
• Energy Offer Curve in SCED
$/MWh to operate at given MW
quantities above sustained level
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Startup Offer Cap ($/Start)
Startup Offer Cap = Fuel Costs + O&M
• O&M = Operation & Maintenance Costs
• Calculated for each Startup Type• Cold Start• Hot Start• Intermediate Start
How are Startup Offer Caps Calculated
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Minimum Energy Offer Cap ($/MWh)
Minimum Offer Cap = Fuel Costs + O&M
• Costs at LSL
How are Min Energy Offer Caps Calculated
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Startup Offer and Min Offer CapsUsing
Generic Costs
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How are Startup Offer Caps Calculated
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Generic Startup Offer Cap ($/Start) for CCP > 90MW
Startup Offer Cap = $6,800/Start
• Startup Offer Cap applies to all configurations
• Same value for each start type• Cold Start• Hot Start• Intermediate Star• Use as default value by ERCOT if no other costs are
filed Note: CCP = Combined Cycle Plant
How are Startup Offer Caps Calculated
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How are Min Energy Offer Caps Calculated
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Generic Min Energy Offer Cap ($/MWh) for CCP > 90MW
Minimum Offer Cap = 10 MMBtu/MWh * FIP
• Costs at LSL
• Fuel costs based on generic heat rate
• Use as default value by ERCOT if no other costs are filed
How are Min Energy Offer Caps Calculated
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Startup Offer and Min Offer CapsUsing
Verifiable Costs
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Verifiable Costs include:• Fuel consumption rates (actual)• Incremental Operation & Maintenance (O&M) costs
• Variable O&M• Emission credit costs• Nodal Surcharge Factor
Permissible Verifiable Cost
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Startup Fuel and Incremental O&M• Verifiable Startup Offer costs
• Replace generic caps on Startup Offers• Are calculated using
◦ FIP/FOP◦ Verifiable fuel rates◦ Incremental O&M
How Verifiable Costs are Used
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QSE’s Startup Offer
_ Startup Offer Cap calculated using verifiable costs
<
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Minimum-Energy Fuel and Incremental O&M• Minimum Operating Costs
• Replace generic caps on Minimum Energy Offers• Are calculated using
◦ FIP/FOP◦ Verifiable fuel rates at LSL◦ Incremental O&M
How Verifiable Costs are Used
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QSE’s Minimum
Energy Offer_
Minimum Energy Offer cap calculated using verifiable
costs<
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Verifiable Startup Costs ($/Start)
Startup Offer Cap = Fuel Costs + O&M
• O&M = Verifiable Operation & Maintenance Costs
• Calculated for each Startup Type• Cold Start• Hot Start• Intermediate Start
How are Verifiable Costs used
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How are Verifiable Costs used
Verifiable Fuel Cost to Start ($)
• Fuel Quantity = MMBtu• Fuel Quantity Price = $/MMBtu
Fuel Cost = Fuel Quantity x Fuel Price x Fuel Percentage
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How are Verifiable Costs used
Verifiable O&M to Start ($)
O&M Cost = O&M costs + Emissions Costs + Nodal Surcharge
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Verifiable Minimum Energy Costs ($/MWh)
Minimum Offer Cap = Fuel Costs + O&M
• Costs at LSL
How are Verifiable Costs used
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How are Verifiable Costs used
Verifiable Minimum Energy Fuel Cost at LSL ($/MWh)
• Fuel Quantity = MMBtu/MWh
Fuel Cost = Fuel Quantity x Fuel Price x Fuel Percentage
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How are Verifiable Costs used
• Energy Offer Curves may be subject to mitigation in Real-Time operations using a Mitigated Offer Cap
• ERCOT will construct an incremental Mitigated Offer Cap Curve
• Generating Resources online after January 1, 2004 the Mitigated Offer Cap Curve will be the greater of (point by point):
14.5 MMBtu/MWh x minimum of FIP or FOP
OR
Resource’s IHR Curve x ((percentage of FIP x FIP) + (percentage of FOP x FOP))/100 + verifiable variable O&M costs times a multiplier
• For Resources online before January 1, 2004 the Mitigated Offer Curve will be the greater of (point by point)10.5 MMBTU/MWh or the IHR curve
Mitigated Offer Curve
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Where Verifiable Costs are Used
Protocol Requirements for Calculating Make-Whole Payments
• Price used for Make-Whole payments is as follows:
Before ERCOT Approval After ERCOT Approval
• Generic Startup Offer Cap for the Resource Category; and
• Startup Offer Cap based on
approved verifiable unit-
specific costs; and
• Generic Minimum-Energy Offer Cap for the Resource Category
• Minimum-Energy Offer Cap
based on approved
verifiable unit-specific costs
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Standard Costs
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Standard Costs Include:• Fuel consumption rates (actual)• Operation & Maintenance (O&M) costs
• As defined in the Protocols
Permissible Standard Costs
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Differences Between Generic Costs
Verifiable CostsStandard Costs
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Differences in Cost Categories
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Type of Cost Filing with ERCOT
Generic Not required
Verifiable Required*
Standard Required**
* For Resources receiving 5 RUC deployments in a year** May substitute Standard Costs (O&M) in lieu of actual verifiable O&M** Only valid through 12/31/2011 unless Board approves changes/extensionNote: Cannot mix costs, part generic, part verifiable or part Standard
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Differences in Cost Categories
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Start Up Cost Startup Fuel Rate(MMBtu)
O& M($)
Generic None Protocol value(4.4.9.2.3.1)
Verifiable Resource actual Resource actual
Standard Resource actual Protocol value(5.6.1.6)
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Differences in Cost Categories
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Min Energy Cost Heat Rate(MMBtu/MWh)
O& M($/MWh)
Generic Protocol value(4.4.9.2.3.2)
None
Verifiable Resource actual Resource actual
Standard Resource actual Protocol value(5.6.1.6)
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Differences in Cost Categories
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RT Mitigation Fuel Rate(MMBtu/MWh)
O& M($/MWh)
Generic Generic Heat Rate(4.4.9.4.1)
None
Verifiable Resource actual Resource actual
Standard None None
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Any Questions?
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Module Summary
Related Links• Verifiable Costs template
• http://nodal.ercot.com/readiness/golive/kd/Verifiable_Costs_Submission_Template_v9.xls
• Verifiable Costs Manual• http://nodal.ercot.com/readiness/golive/
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