Hi Everyone,

 

First of all, thanks to ERCOT for organizing the ISO Lessons Learned meeting
- it was very informative.

 

A few important items that we learned from all the ISOs (PJM answers were
not very clear):

1.	ISOs do not re-procure AS capacity that is deployed to provide that
service and provide both capacity payment and energy payment for the
deployed energy during the deployment period. They said that NERC does not
require re-procurement (which is also ERCOT's current practice) and that
re-procuring would lead to AS price spike that is not justified (there is no
scarcity of the reserve just because the energy is being deployed - similar
to Regulation Service). This is the same concern that I've had as well as
the concern about Resources not being paid for an ancillary service while
it's actually providing that service by either a frequency event or ERCOT
instruction and thus being exposed to AS imbalance charge if it sold the
service in DAM. This is true for batteries, load, and generators responding
to frequency or manually being instructed by ERCOT. This really becomes
clear when considering batteries. When batteries respond to a frequency
event, it provides it's full AS capacity in the current SCED interval and is
paid both the AS capacity payment and the energy for that first interval.
But if the battery is not going to be paid the AS capacity payment in
subsequent SCED intervals, it makes no sense for the battery to keep
providing the services for free especially if the energy price doesn't
justify discharging (there's no makewhole payment either).
2.	ISOs substitute higher value AS capacity for lower value AS capacity
and maintain the substituted AS capacity as the higher value service. This
is exactly the substitution equations that I shared and this results in
higher level of reliability, make each ASDC continuous curves so that
additional higher value products always has value greater than or equal to
lower value AS service, and ensures higher or equal clearing price for
higher value AS compared to lower value AS. We were told at earlier meetings
that this is not done by other ISOs - which these ISOs said was not the
case. ERCOT expressed the concern that this would mean changes to DAM engine
- however, we are opening up the DAM engine by using the same ASDCs as in
SCED. The other concern about changes to ERCOT Operating Procedures - these
changes should be minimal and beneficial to reliable operation as done in
these other ISOs. We might actually save money in SCED (RTC) implementation
since this seems to be the standard treatment in RTC. This is the more
reliable, economic, and theoretically correct treatment - so we should
seriously consider this.

 

Regards,

Shams Siddiqi, PhD

President, Crescent Power, Inc.

11412 Bee Caves Rd, Suite 202

Austin, Texas 78738

Tel. +1.512.619.3532

Email:  <mailto:[log in to unmask]> [log in to unmask]

 <http://www.crescentpower.net> www.crescentpower.net 

 

 

 


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