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Day-Ahead Market Discussion/Clarification

Day-Ahead Market Discussion/Clarification. TPTF April 24, 2006. ISSUES. DAM delay due to A/S Offer Insufficiency Derating PTP Options declared to be settled in RT Ancillary Service Procurement and Unit Commitment Evaluation of A/S Capacity Insufficiency Load Forecast Distribution Factor.

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Day-Ahead Market Discussion/Clarification

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  1. Day-Ahead Market Discussion/Clarification TPTF April 24, 2006

  2. ISSUES • DAM delay due to A/S Offer Insufficiency • Derating PTP Options declared to be settled in RT • Ancillary Service Procurement and Unit Commitment • Evaluation of A/S Capacity Insufficiency • Load Forecast Distribution Factor

  3. Issue 1: DAM delay due to insuff. A/S offers Protocol Requirements (4.5.2): • ERCOT shall determine if there is an insufficiency in A/S offers before executing the DAM; • ERCOT shall declare an A/S insufficiency and issue an Alert; • ERCOT shall request additional A/S offers; • QSE resubmit offers or submit additional offers; • ERCOT must reduce the A/S Plan for DAM purpose if A/S offer insufficiency continues.

  4. Issue 1: DAM delay due to insuff. A/S offers ERCOT Determines A/S Insufficiency ERCOT Reduce A/S Plan for DAM Purpose ERCOT Requests add’l A/S offers x min? 30 min? 10:00? QSE Starts to Resubmit A/S Offers Execute DAM ERCOT Declares A/S Insufficiency and Issue Alert Note: Normally x shouldn’t be more than 10 minutes

  5. Issue 1: DAM delay due to insuff. A/S offers ? Execute DAM Execute DRUC 14:30 10:00 • Should DRUC be delayed too if DAM (including communicating DAM awards, QSE updating COP, etc) is delayed? • If yes, what’s the new timeline?

  6. Issue 2: Derate PTP Options Protocol Requirements (4.5.1(8)): The directional network element flows for PTP Options declared for settlement in Real-Time must be properly accounted for in determining available transmission network capacity in the DAM. In the event the available transmission capability in the DAM cannot accommodate all PTP Options declared for settlement in Real-Time, any PTP Option declared for settlement in Real-Time that impacts overloaded directional network elements must be appropriately derated for DAM modeling purposes only, in proportion to that impact.

  7. Issue 2: Derate PTP Options • In which market should the amount of PTP options derated be settled? • One option is: • settle in DAM those derated MWs with offer price lower than DAM market clearing price • settle in RTM those derated MWs with offer price higher than DAM market clearing price

  8. Issue 2: Derate PTP Options • Derating in proportion to impact is easy to do when there is only there is only one network element involved. • Derating in proportion to impact cannot be accurately done when more than one network elements are involved.

  9. Issue 3: A/S Procurement and Unit Commitment • 4.4.6.2.1 Ancillary Service Offer Criteria • (1) Each Ancillary Service Offer must be submitted by a QSE and must include the following information: • (a) The selling QSE; • (b) The Resource represented by the QSE from which the offer would be supplied; • (c) The quantity in MW from that Resource for this specific offer and the specific quantity in MW of any other Ancillary Service offered from this same capacity; • (d) The first and last hour of the offer; • (e) A fixed quantity block, or variable quantity block indicator for the offer; • (f) The expiration time and date of the offer. There is no reference to the Resource’s online/offline status.

  10. Issue 3: A/S Procurement and Unit Commitment Is UC required to clear A/S offers from an offline Resource? N Y w 3-part Offer w/o 3-part Offer w 3-part Offer: (As the QSE doesn’t know whether its Resource will be committed or not, it will have difficulties to decide whether it’s A/S offer should include startup and min energy costs.) w/o 3-part Offer Make-Whole? A/S offer still considered valid? A/S offer validation: No DRS offers will be allowed; only URS and RRS offers allowed. Y N Y N 3-part Offer cleared? Deduct A/S Revenue from Make-Whole Payment? End Self-commitment if A/S offer cleared; No Make-Whole payment Create generic 3-part offer for the Resource End Y N Make-Whole; No A/S revenue deduction from Make-Whole payment No Make-Whole Make-Whole? Y N Deduct A/S Revenue from Make-Whole Payment? End

  11. Issue 3: A/S Procurement and Unit Commitment NSRS • NSRS offers can be cleared with or without unit-commitment • If both NSRS offer and 3-part supply offer are cleared, there may be a make-whole payment. • If NSRS offer is cleared but not 3-part supply offer, there will be no make-whole payment. • For NSRS, the QSE will have difficulties deciding whether it should include Start-Up and Min Energy costs in its NSRS offer.

  12. Issue 4: Evaluation of A/S Capacity Insufficiency During AP and RT • 6.4.8.1 Evaluation and Maintenance of Ancillary Service Capacity Insufficiency • (1) ERCOT shall evaluate Ancillary Service requirements and capacity insufficiency using the Ancillary Service Capacity Monitor, described in Section 6.5.7.5, Ancillary Services Capacity Monitor, throughout the Adjustment Period and Operating Period and may procure Ancillary Service in the Adjustment Period for: • Increased need of Ancillary Services capacity above that specified in the Day-Ahead; • Replacement of Ancillary Services capacity that is undeliverable due to transmission constraints; or • Replacement of Ancillary Services capacity due to failure to provide. • 6.5.7.5 Ancillary Services Capacity Monitor • (1) ERCOT shall calculate the following every 10 seconds and provide Real-Time summaries to ERCOT operators and all Market Participants using the MIS Secure Area and ICCP, giving updates of calculations every 10 seconds, which shows the Real-Time total system amount of…

  13. Issue 4: Evaluation of A/S Capacity Insufficiency During AP and RT • A/S Capacity Monitor provides system capacity information based on real-time telemetry, not on COP. • COP should be given more weight when ERCOT evaluates A/S sufficiency to open a supplement A/S market for future hours. • Should ERCOT also consider other factors such as sudden weather changes and observed binding transmission constraints?

  14. Issue 5: Load Forecast Distribution Factor 4.5.1(5) ERCOT shall determine the appropriate Load distributions to allocate offers, bids, and source and sink of CRRs at a Load Zone across the Electrical Buses that are modeled with Load in that Load Zone. The default distribution is the State Estimator hourly distribution for the seven days before the Operating Day. If ERCOT decides, in its sole discretion, to change this distribution for reasons such as anticipated weather events or holidays, ERCOT shall select a State Estimator distribution from a proxy day reasonably reflecting the anticipated distribution in the Operating Day.

  15. Issue 5: Load Forecast Distribution Factor • What if there is a planned bus outage? The original distribution factors may allocate offers/bids to that bus anyway. Can ERCOT adjust the distribution factors?

  16. ? Issue 5: Load Forecast Distribution Factor RAPs & SPSs Dynamic rating Network topology builder Outage schedules Network topology & limits CRR Day-ahead Feasibility Test Notify awards to QSE Load distribution factor Network model De-rate: CRR options declared to settle in RT Post market information Generic constraints (voltage limit & stability limit) DAM Clearing DAM Information to settlement Price validation & correction AS requirement Notify AS insufficiency to DRUC DAM AS sufficiency check QSE AS obligations QSE: AS self-arrangements AS offers QSE: Energy offers/bids, A/S offers, CRR offers declared to settle at RT PTP obligation bids, COPs, etc RMR offers

  17. Issue 5: Load Forecast Distribution Factor • State Estimator runs every five minutes. Should the hourly distribution be the average of the 12 five-minutes or any of those 12 five-minutes?

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