Transcript 7 SERE ERCOT Pres

Raine Cotton
[email protected]
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Registered DG settlement is in accordance
with Protocol Section 6.6.3.2 as Real-Time
Energy Imbalance at a Load Zone
Compensated at the Load Zone Settlement
Point Price (SPP).
◦ Average of Real-Time LMPs at Electrical Buses in the
Load Zone for which the DG is located
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Less than 10MW and connected below 60KV
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6.6.3.2 Real-Time Energy Imbalance Payment
or Charge at a Load Zone
◦ The payment or charge to each QSE for Energy
Imbalance Service is calculated based on the RealTime Settlement Point Price for the following
amounts at a particular Load Zone Settlement Point:
◦ (h) The aggregated generation of its Non-Modeled
Generators in the Load Zone.
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The payment or charge to each QSE for
Energy Imbalance Service at a Load Zone for a
given 15-minute Settlement Interval…
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Minor Protocol modification would allow DG
to participate in a more market based
approach
Specifically, if DG were guided by a Market
approach then DG may be able to play a
larger role in relieving congestion
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Change DG’s compensation to the LMP that is
the most logically connected existing LMP
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DG can provide generation much faster than
larger Resources (construction and ramp)
Interconnection is typically far shorter and
more straight forward
◦ Interconnection process is directly between the
TDSP and generator with less involvement with
ERCOT
◦ Compared with the cost to interconnect at
Distribution Voltage, interconnection cost per MW
at Transmission Voltage can be prohibitive for DG.
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Investments do not have to be as long term
compared to typical “larger plants” because
there is a fluid secondary market of smaller
equipment
Project development time is shorter
◦ Permitting
◦ Land
◦ Funding
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Could provide bridge to more permanent
and/or larger installation
5.2 MW
*This example would exceed 10MW threshold
West Texas Oil and Gas growth causes congestion
We ship Gas behind the congestion to Power Plants
And then struggle to get power back
There is only so much generation that distribution lines can
accommodate; however, just because a node is congestion
it does not mean that there is only one downstream
distribution line for DG
Example:
Congested
Node
Nodes having “congestion” pricing signals because of
upstream congestion
Congested
Node
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While DG cannot solve all congestion issues it
can play a role.
We have a market structure in place that is
currently sending pricing signals so why not
allow the market to help determine when DG
is feasible?
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Current DG players may not want to change
their pricing structure
◦ Allow changes going forward
◦ Make it an opt-in program
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Increase of staff time “studying logical nodes”
◦ Set minimum size for program (i.e. >1MW)
◦ Charge fee to offset cost
◦ The reality is that the logical node will be evident
without much effort
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What about REPs?
◦ Contract price based on applicable LMP
◦ If a generator is going to be exporting energy (not
just net metering) is direct to QSE an option?
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Startup and Ancillary Energy?
• If DG is being compensated for production at the LMP
price should energy consumption be priced the same
• Blackbox (no import of energy)
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Having DG LMPs assigned to existing Nodes
may help the modeling of DG
There is currently no incentive for a
moderately sized DG to help relieve
congestion even though it is often moderate
and small loads that ultimately cause
congestion
We are already settling at the Load Zone SPP
so perhaps changing to a Logical LMP will
not be a difficult Protocol tweak
This idea will produce actual electrons
flowing to a physical location that is in need
of power as determined by the market
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Physical, not paper solution
Raine Cotton
[email protected]