Discussion Items: 15. Calculations of each adder value. ERCOT: Whats changed since Uri and what weaknesses remain By Barbara Clemenhagen, V.P. items are complete and in operation, such as the new Minimum Contingency Level (MCL) and High System-Wide Offer Cap (HCAP) for the Operating Reserve Demand Curve (ORDC). The IMM recommended that the maximum price for energy offers in ERCOT be no lower than $2,000/MWh. Is a policy analyst consultant for TCAP, a coalition of political subdivisions in Texas that purchase electricity in the deregulated market for their own governmental use. The ERCOT Steel Mills argued no changes are needed to the rule now because even though capacity got tight Aug 13, the grid never reached an Energy Emergency Alert level as plenty of quick-start resources were available to come online. ORDC is a curve that represents the value of reserves at different reserve levels based on the probability of reserves falling below the minimum contingency level and the Value of Lost Load (VOLL)" The data set includes the underlying calculations producing values matching ERCOT's data when all parameters are the same. This will be an adder to the Real-Time LMP based on NPRR568 Real-Time Reserve Price Adder Based on Operating Reserve Demand Curve. "Changes to the Operating Reserve Demand Curve and the System-Wide Offer Cap: decrease the SWCAP and cap the total system price at a lower value in the range of $5,000/MWh; decrease the Minimum Contingency Level (MCL) to 1,430 MW; and increase the Value of Lost Load (VOLL) to a higher value in the range of $20,000/MWh." Based on 2013 ERCOT historical wind and load profiles. Determination of ORDC - Minimum Contingency Level X 20 ERCOT will start taking out -of-market actions well before available reserves drop to zero. To factor in the price impacts of these out -of-market actions when reserves are steadily being depleted, a Minimum Contingency These adders use the current rules, which lower the price cap to $5000/MWh but raise the Minimum Contingency Level to 3000 MW. The Electric Reliability Council of Texas (ERCOT) operating reserve demand curve (ORDC) is a complex mathematical tool used as the ERCOT markets scarcity pricing mechanism. During Winter Storm Landon, ERCOT increased the amount of reserves in the market. The ORPA was implemented in mid-2014 to account for the value of reserves based on the probability of reserves falling below the minimum contingency level and the value of lost load. 3.1. Another, which is being fast tracked, is the ERCOT contingency reserve service that will allow ERCOT to procure reserves on a market basis, rather than relying on out-of-market deployments. Additionally, ERCOT will compensate generators for voltage support service. Multi-Interval Real-Time Market 19. The minimum contingency level is the online reserve margin below which operating reserve demand charge (ORDC) price adders are added to LMPs. There is a minimum level of operating reserve (e.g., 3%) to protect ERCOT launched implementation of the ORDC in in 2014. ERCOT Public Recent Events 5 Removed Reliability Unit Commitment (RUC) and Reliability Must -Run (RMR) capacity from available Real -Time reserves (2018) In January 2019, PUCT directed ERCOT to: Make changes to the value of mean used in ORDC but did not make changes to: Minimum contingency reserve value (X = 2,000MW) Table 1 : Energy-weighted average energy price adder (and Online reserve price) ($/MWh) for 2011 & 2012 While the headline from the re-vamped ORDC is a lower price cap (actually, an offer cap) ERCOT also raised the Minimum Contingency Level of reserves (MCL) from 2000 MW to 3000, a change whose effects are less immediately apparent. Historical data from 2015 through 2017 supports this theory, although the calculated Both phases would have a Minimum Contingency Level (MCL) of 3,000 MW and a high system-wide offer cap (HCAP) of $5,000/MWh. the Minimum Contingency Level sets the scarcity level at which the ORDC kicks in. the minimum contingency level at 3,000 MW, and increasing the ORDC standard deviation parameter. 2.6.1. The suggestion of multiplying the standard deviation ( ) used in the Electric Reliability Council of Texas (ERCOT) Operating Reserve Demand Curve (ORDC) loss of load probability (LOLP) by a factor greater than 1.0 has been posited to solve the missing money argument.. 2. Determination of ORDC - Minimum Contingency Level X . 2. In response to a Texas regulator s concern that a price adder designed to ensure that sufficient generation reserves remain available has been too low during periods of scarcity, Electric Reliability 6.5.9.3.4, Emergency Notice. 3. ERCOT is considered to be in an insecure state whenever ERCOT Transmission Grid status is such that a Credible Single Contingency event presents the threat of uncontrolled separation of cascading outages and/or large-scale service disruption to Load (other than Load being served from a single-feed transmission service) The teal bars show what the ORDC adder would have been if the historical rulesthe $9000 price cap, and the 2000 MW MCLhad still been in rpt.00013231.0000000000000000.20220703.102041081.rtm_ordc_rel_dply_prc_addr_rsrv_2022.zip 3. Recent ERCOT Capacity, Demand, and Reserve Reports (CDRs) have consistently forecasted near-term reserve margins climbing to the 30%-40% range. On May 8th, ERCOT released two important reports that will give customers a picture of what generation ERCOT will have for summer 2019 as well as for a. It was this curve that the PUCT chose to adjust last winter, reducing the system-wide offer cap maximum price, but at the same time fattening the long ramp in of the curve. Abstract. Disaggregation of the ORDC into RegUp, RRS, Non-Spin Demand Curves 14. Others are only in the concept stage-for example, a voltage support compensation program. 3. ERCOT 2015 data. NextEra strongly argued that any reduction in the HCAP needs to be offset by changes to the ORDC parameters that will shift the ORDC to the right so that the revised curve causes scarcity pricing to occur at higher reserve margins. ERCOT. (VOLL), the minimum contingency level (X), and the loss of load probability (LOLP). Last February, Winter Storm Uri rolled through Texas and triggered controlled outages effecting more than four million customers, leaving some without power for days. 2.6. The commission agreed to set a future rulemaking on making parameter changes to the ORDC, which is an automated system employed but ERCOT that adds additional dollars to price offers by generators during scarcity conditions. This means that even though the HCAP was reduced, high prices are more likely to occur more frequently because the ORDC price adders will take effect at higher levels of reserves. The transmission grid that the ERCOT independent system operator administers is located solely within the state of Texas and is not synchronously interconnected to the rest of the United States. As reserves get closer to a predefined level, called the minimum contingency level (MCL), these reserves grow quickly to top out at the price cap. Mathematically, the ORDC is formalized as follows. of Market Intelligence at Customized Energy Solutions. [ ERCOT ORDC Options Analysis ] Back to TOC Market Analysis | ERCOT Public Electric Reliability Council of Texas, Inc. | Page 2 6 List of Figures Figure 1. The ERCOT data is just the actual data. (ORDC) charges at the same level of reserves versus in 2018. History of ORDC at ERCOT ERCOT is an energy-only market Energy pricing must support an appropriate level of investment in Resources 5 When operating reserves are low, the probability of having a scarcity event increases. From an economic perspective, a way to interpret and define these contingency reserves would Microsoft Word - Hogan_ORDC_110112 Author: 20 ERCOT will start taking out -of-market actions well before available reserves drop to zero. An ERCOT Window of Opportunity William W. Hogani November 1, 2012 operators must maintain a minimum level of contingency reserves. Immediately actionable: Changes to the ORDC should be made fective January 1, 2022 to set the Minimum Contingency Level (MCL) at 3,000 megawatts (MW) and set the high system-wide fer cap (HCAP) and value of lost load (VOLL) to $5,000 per megawatt-hour (MWh). 2.7. the minimum contingency level (the value of "x" in the ORDC B+ formula) utilized in prior back casts is set at 2300 megawatts (MW). be appropriate, if properly coordinated with other changes to the operating reserve demand curve (ORDC) parameters and shape. Commissioner McAdams supported a Minimum Contingency Level (MCL) of 3,000 MW, noting that at this level it would kick in prior to an Energy Emergency Alert (EEA), allowing Emergency Response Service (ERS) to be deployed after reaching the MCL, when scarcity pricing goes into effect. This is misleading, for several reasons: Excess reserve crediting for wind and solar: The CDR methodology uses average renewable output levels during top-20 historical load hours. TCPA appreciates the Public Utility Commission of Texas (Commissions) recognition that lowering HCAP without commensurate adjustments to the probability of reserves falling below minimum contingency level (PBMCL) would take revenues The energy prices resulting from a FRSP policy are highly dependent on the specific scarcity penalty values that are chosen. The ORDC in ERCOT does not apply to regulation reserves. of Texas's (PUCT's) approval of changes to the minimum contingency level for the Operating Reserve Demand Curve (ORDC) ERCOT Client Services. High Level Description of the Inputs, Clearing Process and Outputs 20. Operating Reserve Demand Curve (ORDC) Chairman Lake noted that he had made some changes in his recommendation concerning ORDC reform, including breaking it into two phases. 3.1.1. Market Notices concerning Power Operations and related Technical Issues at ERCOT. In the previous analyses submitted, ERCOT conducted a back cast OF 2011-2012 conditions using minimum contingency levels of 1375 MW and 1750 MW. To factor in the price impacts of these out -of-market actions when reserves are steadily being depleted, a Minimum Contingency Level of 2000 MW was decided upon by the PUCT. lowest level for a prompt-year summer reserve margin since at least 2000. Let us denote R as the reserves level, and let X be the minimum contingency reserve level. At the December 16, 2021 Public Utility Commission of Texas (PUCT) Open Meeting, the PUCT ordered ERCOT to change the minimum contingency level (X) used in the ORDC process from 2,000 MW to 3,000 MW, effective January 1, 2022.