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“Rethinking” Ancillary Services in ERCOT and Efforts to Incorporate “Loads In SCED”

ERCOT Staff

Operator Training SeminarSpring 2014

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IntroductionThis presentation an overview of the current effort to “rethink” the Ancillary Services in ERCOT and an overview of the efforts to incorporate “Loads in SCED”.

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Objectives (part 1)At the completion of this course of instruction

you will:

Identify drivers for rethinking the Ancillary Services in ERCOT.

Identify the AS products being discussed for a new AS framework.

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Objectives (part 2)

Identify Load Resources that can participate in Security Constrained Economic Dispatch (per NPRR 555).

Identify Real-Time Market Energy Bid Characteristics for Load Resources participating in SCED.

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Drivers for new AS Framework

• Current AS Framework has performed well but has issues• Resources could provide some services more efficiently if the

requirements were decoupled (PFR/ FFR/ Contingency Reserve)• New service needed to ensure technical requirements are met

that used to be provided, inherently, by generators (e.g. inertia)• Awkward to fit capabilities of new technologies (e.g. CCGTs with

duct firing, wind turbines) that could provide services efficiently • Changes in market design and control systems(e.g. 5 minute

dispatch, HRUC) have reduced the need for other services• New regulatory requirements (BAL-003)

• Need for changes has been highlighted in discussion of Fast Responding Regulation Service (FRRS), NPRR 524(Resource Limits in Providing Ancillary Service), etc.

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Goal

Current AS Framework- Based on capabilities of

conventional steam generating units

- Unique services bundled together due to inherent capabilities of conventional units

- Mix of compensated and uncompensated services

- New technologies are cobbled on, with difficulty

Future AS Framework- Technology neutral- Market-based- Based on fundamental

needs of the system, not resource characteristics

- Unbundled services- Flexible for new

technologies- Pay for performance,

where practical- Co-optimized

procurement- Will evolve over time

5+ YearsNow

Transition Plan TBD

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Scope of Proposed AS Framework

• Long-term Ancillary Services (AS) framework intended to guide:– Decisions on near-term changes to current AS– Requirements for changes to ERCOT systems (EMMS, etc.)– Investment in new resources and new resource types by the mkt.

• Framework will be developed in phases, due to complexity of issues– Current Phase will only address frequency control services– Future Phases may address Voltage Support and other services

• Framework should eventually include roadmap for transition from current AS to future framework– Prioritization of services to be transitioned– Inter-relationship of services that must transition concurrently – High-level consideration of ERCOT systems and market impacts

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Proposed AS Products

ERCOT proposes the transition to the following five AS products:

1. Synchronous Inertial Response Service (SIR),

2. Fast Frequency Response Service (FFR),

3. Primary Frequency Response Service (PFR),

4. Regulating Reserve Up (RRU) and Regulating Reserve Down (RRD) Service, and

5. Contingency Reserve Service (CR).

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ERCOT Proposal

• This revised AS set adds and/or redefines specific AS products currently used by the ERCOT System and

– Subsumes different elements within the current Responsive Reserve Service into several of the newly defined services.

– Recognizes during the transition period from today’s AS to the future AS set, there may be the need for a Supplemental Reserve Service that would be similar to today’s 30-minute Non-Spin Service.

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Regulation

Responsive

Non-Spin

Regulation

Fast Frequency Response

Primary Frequency Response

Contingency Reserve

Supplemental Reserve

Synchronous Inertial

Response

Current Framework Proposed Framework

• 400-600 MW

• 2800 MW

• Max 1500 (incl.

• 500 to RRS)

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SYNCHRONOUS INERTIAL RESPONSE (SIR) SERVICE

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Synchronous Inertial Response (SIR) Service SIR is stored kinetic energy that is extracted from the rotating mass of a synchronous

machine following a disturbance in a power system

Maintain minimum Rate of Change of Frequency (RoCoF) Provide sufficient time from Point A to Point C, for Fast Frequency Response and

Primary Frequency Response No triggering RoCoF protection of synchronous generators (generally 0.5 Hz/s)

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Synchronous Inertial Response Service

SIR has significant implications on the RoCoF during power imbalances;

With increasing use of non-synchronous generation, changing load characteristics (less motor loads), increase in Combined Cycle units (lower inertia), the system SIR response is reduced:

RoCoF increases, leaving insufficient time for PFR to deploy and arrest the system frequency excursion.

High RoCoF may trigger generation RoCoF protection, tripping additional synchronous generators.

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Synchronous Inertial Response Service

So far, the RoCoF during high wind/low load condition was less than 0.2 Hz/s and the average time to reach frequency nadir during frequency events is 4 to 6 seconds.

The system inertia available in the real time operations under current conditions is still sufficient.

Studies based on 2012 system conditions indicated RoCoF as high as 0.4 Hz/s for two largest unit trip (2750 MW as per recently approved NERC BAL-003 standard).

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Monitor and project the trend of ERCOT system inertial response and RoCoF

Identify the minimum needs of system inertia and duration between points A and C

Gather data to determine each generator’s RoCoF tolerance

Investigate capability and value of synthetic inertial response from renewable energy resources to contribute to system’s SIR

SIR, Future work

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FAST FREQUENCY RESPONSE (FFR) SERVICE

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Fast Frequency Response (FFR) ServiceNeed

To changing frequency to supplement the inherent inertial response from synchronous machines

To provide sufficient time for PFR to deploy and arrest fast frequency excursion in the event of sudden power imbalance

Deployment and Performance Self deployment Provide full response within 30 cycles (0.5 secs.) at a

specified frequency thresholds and sustained for at least 10 minutes

FFR service will require a high resolution measurement

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Fast Frequency Response (FFR) ServiceDiscussion

Presently there is no separate FFR Service in ERCOT, however up to 1400 MW of Responsive Reserve Service (RRS) procured from Load Resources (LR) satisfy FFR characteristics

In the proposed AS framework FFR and PFR are highly interdependent and the required quantity of each service can vary based on the system conditions

FFR and PFR work together to produce the desired system response

FFR service cannot completely replace the PFR service A performance requirement needs to developed

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PRIMARY FREQUENCY RESPONSE (PFR) SERVICE

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Definition of PFR Service

Primary Frequency Response (PFR) is defined as the instantaneous proportional increase or decrease in real power output provided by a Resource in response to system frequency deviations.

This response is in the direction that stabilizes frequency.

Primary Frequency Response is attained due to Governor or Governor-like action

PFR is instantaneous response relative to the frequency deviation,

PFR is generally delivered completely within 12 to 14 seconds.

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Primary Frequency Response (PFR) Service- Need

ERCOT as a single Balancing Authority Interconnection with only limited interconnection to the other Interconnects is solely responsible for maintaining frequency to maintain reliability and meet NERC standard requirements.

All of ERCOT’s frequency response can only come from Resources within the ERCOT Interconnection.

The BAL-003 NERC Frequency Response StandardBAL-003 sets a Frequency Response Obligation (FRO)

for each BA based on loss of two largest single units. The minimum FRO for ERCOT is 413 MW/0.1 Hz

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Determination of the Amount of FFR and PFR Reserves

The objective of Fast Frequency Response (FFR) and Primary Frequency Response (PFR) Reserves should be to ensure Frequency is arrested above UFLS threshold of 59.30 Hz and to meet NERC FRO Standard (BAL-003).

Frequency Response Obligation (FRO) for ERCOT is determined based on instantaneous loss of two largest units (2750 MW).

ERCOT must develop methodologies for the regular assessment of the needed concurrent amounts of both FFR and PFR.

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Determination of the Amount of FFR and PFR Reserves

How much PFR is needed will be based on minimum requirement for FFR while maintaining minimum PFR capability within Generators (for example, in the current RRS, Load Resources can provide up to 50% of 2800 MW RRS).

System Load FFR PFR(5% Droop)

<=35000 MW

840 MW(30% 0f 2800) 1960 MW

<=35000 MW

0 MW 4480 MW

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REGULATING RESERVE (RR) SERVICE

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Regulating Reserve (RR) Service – Up & Down

An amount of reserve responsive to Load Frequency Control, which is sufficient to provide normal regulating margin.

ERCOT generation is dispatched through Security Constrained Economic Dispatch (SCED) every five minutes to balance the generation and demand. The power imbalance between each SCED interval will cause frequency deviation that requires Regulating Reserve to compensate. This action will be provided by RR service.

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Regulating Reserve (RR) Service – Up & DownWhile not substantially changing from todays Regulation Service ERCOT is proposing to implement the following:

LFC signals will be delivered by ERCOT to the QSE specifically for the Resource providing this service

The deployment instructions should be determined by taking into consideration ramp rates, HSLs etc. of each of the individual Resources.

Resources providing RR should be limited to min(NURR,NDRR)*5*0.70, where NURR and NDRR are Normal-Up Ramp Rate and Normal-Down Ramp Rate

The pay for performance approach should reward those Resources that closely follow the ERCOT LFC signal

ERCOT will re-visit its LFC and RLC to avoid deploying RR for more than 10 continuous minutes in one direction during normal operation.

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CONTINGENCY RESERVE (CR) SERVICE

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Contingency Reserve (CR) Service – Need & Purpose CR is to ensure that the Balancing Authority is able to restore

Interconnection frequency within defined limits following a DCS event or large net load forecast error within 15 minutes and restore its Primary Frequency and Regulating Reserve.

According to NERC BAL-002-1 Disturbance Control Standard (DCS), The minimum amount of CR required is equivalent to “Most Severe Single Largest Contingency”, in ERCOT’s case this is currently 1375 MW.

ERCOT may additionally procure CR reserve to cover for large net load forecast errors.

To ensure ERCOT can meet the standard, the CR must be fully deliverable within 10 minutes so that frequency can be restored to the pre-disturbance level within 15 minutes

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Qualification Resources providing CR should be qualified up to the MW value to

which they are able to ramp within 10 minutes from the time of deployment.

Deployment ERCOT will deploy CR for a sizable generation trip. Resources providing CR must telemeter their ramp-rates such that

SCED can dispatch the full Resource CR responsibility within 10 minutes.

Performance Resources providing CR must be able to deliver and sustain the

reserve deployments for the full hour it is carrying that obligation.

Contingency Reserve

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SUPPLEMENTAL RESERVE (SR) SERVICE

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Supplemental Reserve (CR) Service SR service is needed to compensate for net load forecast error

and/or forecast uncertainty on days in which large amounts of reserve are not available online

Generation Resources capable of being ramped to a specified output level within thirty (30) minutes or Load Resources that are capable of being interrupted within thirty (30) minutes and that are capable of running (or being interrupted) at a specified output level for at least one (1) hour

Supplemental Reserve Service would be similar to today’s 30-minute Non-Spin Service

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Review of “Future Ancillary Services”

ERCOT proposes the transition to the following five AS products:

1. Synchronous Inertial Response Service (SIR),

2. Fast Frequency Response Service (FFR),

3. Primary Frequency Response Service (PFR),

4. Regulating Reserve Up (RRU) and Regulating Reserve Down (RRD) Service, and

5. Contingency Reserve Service (CR).

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NPRR 555 LOADS IN SCED

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NPRR 555: Loads in SCED 1.0

• NPRR 555 provides a mechanism for demand response to contribute to price formation

• Targeted to be implemented by Summer 2014

• Discussion about Loads in SCED version 2.0 in progress

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High-level summary

• Eligibility to participate: LSE QSEs representing Load Resources capable of following 5-minute SCED base point instructions– Existing or new single-site Controllable Load Resources (CLRs)

• SCED qualification will be a new attribute for redefined CLR – Aggregate Load Resources (ALRs) composed of multiple sites within

single ERCOT Load Zone (subset of CLR)• New interface will allow QSEs to maintain ALR populations

• Will not support direct participation by third-party DR QSEs• Will not support DR with temporal constraints or block energy

bids– If LR’s bid is on the margin, base point instructions could require LR to

move up or down incrementally every 5 minutes to any level between its LPC and MPC

– SCED will honor LR’s telemetered ramp rates

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High-level summary (cont.)

• QSEs with LRs in SCED will submit Bids to buy (not Offers to sell)• Bids will reflect LR’s willingness to consume “up to” a specified five-

minute Load Zone LMP• May be a curve or a MW bid at single strike price

– Bid curve option could allow the QSE to submit bids with different strike prices for separate loads within the LR

• Bid will modify the SCED demand curve and have ability to set price– SCED Generation to be Dispatched (GTBD) will be adjusted to accommodate

LR participation – This will ensure proper price formation and reduce the likelihood of oscillating

dispatch instructions• Bids from LRs capped at the System Wide Offer Cap

– This is to avoid stranded AS and PRC• ‘Bid to buy’ creates settlement outcomes equivalent to the “volumetric

flow” LMP minus G methodology endorsed by TAC, while avoiding need for ERCOT to “send back” the DR value to the LSE

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High-level summary (cont.)

• LR benefits and opportunity:– Avoided cost of consumption above specified price– Price certainty due to ERCOT dispatch– Eligibility to provide Non-spin

• Treated similarly to Offline Generation providing Non-spin• Energy Bids ≥$180 will need to be released to SCED within 20 minutes

following dispatch

• NPRR 555 also proposes that any CLR providing RRS also must be dispatched by SCED

• Market impacts:– LR Bids may set price in the RTM– No make-whole payments– No load ratio share uplifts to market for DR value

• SCED will dispatch LRs for power balance and congestion management using the applicable Load Zone Shift Factor

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LRs in Ancillary Services & SCED

• RRS and Non-Spin from CLR will be deployed via economic dispatch of DR capacity via SCED – CLR will have RTM Energy Bid that covers the RRS and/or Non-

Spin capacity released to SCED – Also can optionally bid additional DR capacity for SCED dispatch

• SCED will only consider CLR for dispatch if its telemetered Resource status is ONCLR or ONRGL– Cannot be OUTL if carrying AS responsibility unless QSE moves

responsibility to a different Resource• No change to existing participation in RRS by UFR-type Load

Resources– UFR-LR-RRS may still be deployed manually in EEA 2– Prices will be at SWCAP any time this happens because Gen-

RRS is deployed first• No change to existing ERS

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CLR with Bid to Buy: SCED Objective & Power Balance

• SCED optimization will minimize cost of dispatch of supply and maximize revenue from demand while meeting Power Balance

Minimize { Sum(OfferPricegen * BasePointgen) – Sum(BidPriceLR * BasePointLR) }

• BasePointgen is instruction on how much to produce• BasePointLR is instruction on how much to consume• NPFLR is current telemetered real power consumption• All Resources can follow 5 minute SCED Base Points

• Power Balance Constraint:Supply=DemandSupply = Sum (BasePointgen)Demand = GTBD = Inelastic Demand + Elastic DemandInelastic Demand = GTBD - Sum(NPFLR)Elastic Demand = Sum (BasePointLR)Sum (BasePointgen) = GTBD - Sum(NPFLR) + Sum (BasePointLR)

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Example of SCED outcome: CLR with Bid to Buy

  t t+5 t+10 t+15 t+20 t+25LMP 50 200 300 300 200 50Inelastic Demand 58,500 59,700 60,050 60,125 59,075 58,500NPF_LR 1,000 1,000 300 0 0 925GTBD 59,500 60,700 60,350 60,125 59,075 59,425BP_G1 59,500 60,000 60,000 60,000 60,000 59,500BP_G2 0 0 50 125 0 0BP_LR 1,000 300 0 0 925 1,000

• G1 Offer to Sell: 60,000 MW @ $50/MWh• G2 Offer to Sell: 2,000 MW @ $300/MWh• LR Bid to Buy: 1,000 MW @ $200/MWh willingness to consume up to 1,000 MW if

LMP at or below $200/MWh• No ramp rate limitations for any Resource• All Resources follow 5 minute SCED Base Points• LR Base Point is instruction on how much to consume

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RTM Energy Bid Characteristics

• The RTM Energy Bid is CLR specific

• The RTM Energy Bid is used only in the Real-Time Market (SCED)

• The RTM Energy Bid must be submitted before the end of the Adjustment Period for a given Operating Hour

• Bid price cannot exceed SWCAP

• Regulation Up & RRS capacity on bid curve shall be priced at SWCAP

• Non-Spin capacity on bid curve shall be priced no lower than $180/MWh

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RTM Energy Bid Characteristics

• The RTM Energy Bid is submitted as a curve having up to 10 points (MW/price combinations)

• The MW range on the bid curve goes from zero to total demand response capability– First bid MW point is at zero MW (left-most point on the bid curve)– Last bid MW point is the total demand response capability (right-

most point on the bid curve)

• The prices on the bid curve from 0 MW to last bid MW are monotonically non-increasing going from left to right– Price at 0 MW is highest– Price at last bid MW is equal to or lower than price at 0 MW– Price in between 0 MW and last bid MW are monotonically non-

increasing

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RTM Energy Bid Characteristics

• The RTM Energy Bid can be submitted with a fixed not-to-exceed price for an “up to bid MW”– This is a submission of a bid curve with two

(MW/price) points having the same price for both MW points.

– The first MW point is at 0 MW (left-most point)– The last MW point is the total demand response

capability (right-most point)

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RTM Energy Bid Characteristics: Example Bid Curve

$/MWh

MW

RTM Energy Bid

0

180

SWCAP

RegUp

Total DemandResponse Capability0

RRS NSpin

SWCAP

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RTM Energy Bid Characteristics

• There is no mitigation of the RTM Energy Bid in SCED Step 2

• For each SCED run, the RTM Energy Bid is right shifted so that the last MW on the bid curve coincides with the telemetered Maximum Power Consumption (MPC)– By this right shift of the bid curve, if the telemetered Low

Power Consumption (LPC) is less than the first point of the right-shifted RTM Energy Bid, then ERCOT shall create a proxy bid extension from LPC to this right-shifted first point of the bid curve with a price of SWCAP

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RTM Energy Bid: Example Bid Curve Right Shift for SCED Use

$/MWh

MW

RTM Energy Bid

0Total DemandResponse Capability

0 $/MWh

MW

Right shiftedRTM Energy Bid

0

MPCLPC

SWCAP SWCAP

Proxy Bid extension

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Scenario 1

• For any SCED intervals that the LR’s bid to buy is greater than the five-minute Load Zone LMP, SCED Base Point will instruct the LR to consume at its telemetered Maximum Power Consumption, subject to ramp rate limitations from its current consumption level (NPF)

ALR CLR(No Non-spin responsibility)

10 MW Firm

5 MW DR-capable

MPC →

LPC →

► $1,000

RTM Bid to Buy

(up to):Load Zone

LMP

$50

SCED Base Point

MPC► ►

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Scenario 2

• For any SCED intervals that the LR’s bid to buy is less than the five-minute Load Zone LMP, SCED Base Point will instruct the LR to consume at its telemetered Low Power Consumption, subject to ramp rate limitations from its current consumption level (NPF)

ALR CLR(No Non-spin responsibility)

10 MW Firm

5 MW DR-capable

MPC →

LPC →

► $1,000

RTM Bid to Buy

(up to):Load Zone

LMP

$1,500

SCED Base Point

LPC► ►

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Scenario 3

• For any SCED intervals that the LR’s bid to buy is equal to the five-minute Load Zone LMP, SCED may dispatch the LR in either direction (up or down) in increments as small as 0.1 MW, within the bounds of the LR’s telemetered Maximum Power Consumption and Low Power Consumption, subject to its telemetered ramp rate limitations from its current consumption level (NPF)

• In this scenario, the LR sets the Load Zone LMP

ALR CLR(No Non-spin responsibility)

10 MW Firm

5 MW DR-capable

MPC →

LPC →

► $1,000

RTM Bid to Buy

(up to):Load Zone

LMP

$1,000

SCED Base Point

LPC≤ BasePoint ≤ MPC► ►

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Scenario 4a

ALR CLR(5 MW Non-spin responsibility;

5 MW additional DR capability)

5 MW Firm

MPC →

LPC →

► $5,000

RTM Bid to Buy

(up to):Load Zone

LMP SCED

Base Point

LPC+5MWsubject to ramp rate limitations from its current

consumption level (NPF)

►5 MW Non-spin

► $1,000

$1,500►

5 MW add’lDR-capable

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Scenario 4b

ALR CLR(5 MW Non-spin responsibility;

5 MW additional DR capability)

5 MW Firm

MPC →

LPC →

► $5,000

RTM Bid to Buy

(up to):Load Zone

LMP SCED

Base Point

►5 MW Non-spin

► $1,000

$5,000►

LPC≤ BasePoint ≤ LPC+5 subject to ramp rate limitations from its

current consumption level (NPF)

5 MW add’lDR-capable

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1. Drivers for moving to a new Ancillary Services Framework includes the following:

a) The Generation mix in ERCOT is changing new regulatory requirements

b) A new framework should allow better use of the capabilities of existing and new Resources

c) Better specifications and performance based pay would likely lead to a more efficient way to acquire and deploy AS

d) All of the above

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2. The proposed AS products (currently in discussion) within the new AS framework does NOT include:  

a) (SIR) Synchronous Inertial Service b) (FFR) Fast Frequency Responsec) (PFR) Primary Frequency Response

ERSd) (QFR) Quick and Flexible Ramping

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3. The objective of Fast Frequency Response (FFR) and Primary Frequency Response (PFR) Reserves should be to ensure Frequency is arrested above UFLS _________ __ _____ __ and to meet NERC FRO Standard (BAL-003). 

a) threshold of 59.30 Hzb) threshold of 59.70 Hz c) threshold of 59.91 Hzd) threshold of 59.80 Hz

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4. The following are eligible to participate as a Load Resource in SCED (per NPRR 555). 

a) Existing or new single-site Controllable Load Resources

b) Aggregate Load Resources (ALRs) composed of multiple sites within single ERCOT Load Zone

c) Load Resources with temporal constraints or block energy bids

d) Both a and b

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5. Which of the following are true about Load Resources participating in SCED:

a) QSEs with LRs in SCED will submit Bids to buy (not Offers to sell)

b) Bids will reflect a LR’s willingness to consume “up to” a specified five-minute Load Zone LMP

c) Base Point instructions could require a LR to move up or down incrementally every 5 minutes to any level between its LPC and MPC (subject to ramp rate limitations)

d) All of the above

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ON

OFF

Questions?