Future Ancillary Service Team (FAST) and Technical Advisory Committee

(TAC) Workshop #2

ERCOT Staff

August 25, 2014

1

• Recap and Overview of Schedule

• Review How AS Requirements are Determined

• Review Options on When Quantities are Finalized and Provided to the Market

• Discuss Specific Policy Cuts

• Update on RFP for CBA

• Review Synchronous Inertial Response (SIR)

• Next Steps

Outline

2

1. Develop Request for Proposals (RFP) for Cost Benefit Analysis (CBA) 2. Specific Policy Questions and items to include in the base-line 8/15/14

3. FAST/TAC Workshop 8/25/14

4. TAC meeting 8/28/14 (policy cuts)

5. Comments on draft NPRR due to ERCOT 10/1/14

6. Post revised NPRR 11/1/14

7. CBA initiated on revised NPRR 11/1/14

From July 31 TAC Meeting

3

Summary of Proposed Future Ancillary Services

Regulation Up

Fast-Responding Regulation Up

Current Proposed

Fast Frequency Response 1

Primary Frequency Response

Contingency Reserves 1

Synchronous Inertial Response

Supplemental Reserves 1

Mostly unchanged

59.8 Hz, Limited duration

59.7 Hz, Longer durationFast Frequency Response 2

Contingency Reserves 2

SCED-dispatched

Manually dispatched

Supplemental Reserves 2

SCED-dispatched

Manually dispatched

Ongoing development

Non-Spin

Responsive

Regulation Down

Fast-Responding Regulation Down

Regulation Up

Fast-Responding Regulation Up

Regulation Down

Fast-Responding Regulation Down

4

Determining AS Quantities

AS Framework

AS Framework

Technical Studies

Technical Studies

Regulatory Reqs

Regulatory Reqs

AS Methodology

AS Methodology

Expected Operating Conditions

Expected Operating Conditions

Hourly AS QuantitiesHourly AS Quantities

Technical AS ReqsTechnical AS Reqs

•Defines AS Products,

settlements, perf.

Reqs, etc

•Implemented in NPRR

•Defines AS Products,

settlements, perf.

Reqs, etc

•Implemented in NPRR

•Studies of S

ystem

perform

ance under diffe

rent

conditions

•Updated as needed

•Studies of S

ystem

perform

ance under diffe

rent

conditions

•Updated as needed

•e.g. N

ERC BAL-003-1

standard•

e.g. NERC BAL-003-1

standard

• Defines AS requirements

as a function of operating

conditions

• Updated when studies or

regulatory requirements are

updated

• Defines AS requirements

as a function of operating

conditions

• Updated when studies or

regulatory requirements are

updated • Documents AS

technical requirements

• Defines how operating

conditions will b

e used

to determine

procurement quantities

• Updated Annually

• Documents AS

technical requirements

• Defines how operating

conditions will b

e used

to determine

procurement quantities

• Updated Annually

•Determ

ined at

lead time(s)

defined in AS

Methodology•Determ

ined at

lead time(s)

defined in AS

Methodology

5

Determining AS Quantities

AS Framework

AS Framework

Technical Studies

Technical Studies

Regulatory Reqs

Regulatory Reqs

AS Methodology

AS Methodology

Expected Operating Conditions

Expected Operating Conditions

Hourly AS QuantitiesHourly AS Quantities

Technical AS ReqsTechnical AS Reqs

6

Study results and proposed methods to determine AS

Requirements

PFRS and FFRSCriteria : Frequency nadir shall be equal to

or above 59.4 Hz for loss of two largest units. (0.1 Hz margin for the first stage of UFLS at 59.3 Hz)

No angular and voltage instabilityWill include

Minimum amount of PFRS Minimum amount of PFRS and FFRS Equivalency ratio between PFR and FFR

High Frequency Over-shoot

8

Minimum Amount of PFR:BAL-003-1: The ERCOT Interconnection Frequency

Response Obligation (IFRO) is currently 413MW/0.1 HzNo FFR Response is expected for 0.3 Hz band

between 60 Hz and 59.70 Hz assuming no FFR1 participation

PFR(min) = 413 MW/0.1 Hz * 3 (since FFR does not respond up to 0.3 Hz deviation) = 1,239 MW

Stability analysis is used to determineMinimum Amount of PFRS and FFRSInterdependence ratio between PFR and FFRMinimum PFR can be changed based on annual review

of IFRO by NERC

PFRS and FFRS (Continued)

9

Numerous frequency stability runs were conducted on multiple scenarios.

Key Assumption:No wind dynamic modelsLoad Resources responded within 30 cyclesGovernor response modeled only for Resources

assigned PFRS in the simulation of a low frequency event 30% PFRS are provided by Coal units 70% PFRS are provided by NG units

Minimum Amount of PFRS and FFRS

10

FFR1(59.8 Hz) Vs FFR2(59.7 Hz)

PFR (MW)Equivalency Ratio(FFR2 v.s. FFR1)

1000 1.06

1400 1.07

1800 1.09

2200 1.11

2600 1.08

1 MW FFR1 ≈ 1 MW FFR2

Test: Twelve Study Cases

15-20 20-25 25-30 30-35 35-40 40-45 45-50 50-55 55-60 60-65

250

300

350

400

450

500

550

600

650

700

Netload Level (GW)

Ine

rtia

(G

W*s

)

Inertia v.s. Netload (June, 2013 - May, 2014)

case1

case2case3

case4

case5

case6

case7

case8

case9

case10

case11

case12

Inertia=2*Kinetic Energy=2*H*MVA

12

An Example of Case StudyMinimum amount of FFR and PFR is determined by preventing frequency from dropping below 59.4Hz for loss of 2 largest units (2750MW)

Preliminary FFR and PFR Study ResultsCase

1Case

2Case

3Case

4Case

5Case

6Case

7Case

8Case

9Case

10Case

11Case

12

FFR/PFR 2.2:1 2.0:1 1.5:1 1.4:1 1.3:11.25:

11.13 :

11.08:

11:1 1.0:1 1:1 1:1

Net load Level(GW)

15-20 15-20 20-25 25-30 30-35 35-40 40-45 45-50 50-55 55-60 60-65 60-65

Inertia (GW∙s) 239 271 304 354 403 459 511 556 593 631 664 700

PFR needed(no FFR)

5200 4700 3750 3370 3100 3040 2640 2640 2240 2280 2140 2140

Case1

Case2

Case3

Case4

Case5

Case6

Case7

Case8

Case9

Case10

Case11

Case12

FFR/PFR 2.2:1 2.0:1 1.5:1 1.4:1 1.3:11.25:

11.13 :

11.08:

11:1 1:1 1:1 1:1

PFR Min 1240 1240 1240 1240 1240 1240 1240 1240 1240 1240 1240 1240

FFR needed with PFR Min

1800 1696 1641 1511 1431 1440 1239 1296 1000 1040 900 900

Combined Total 3040 2936 2881 2751 2671 2680 2479 2536 2240 2280 2140 2140

14

PFR vs FFR (59.7Hz) Result Summary

Case1 Case2 Case3 Case4 Case5 Case6 Case7 Case8 Case9 Case10 Case11 Case12

FFR/PFREquivalence

Ratio2.2:1 2.0:1 1.5:1 1.4:1 1.3:1 1.25:1 1.13 :1 1.08:1 1:1 1:1 1:1 1:1

Net load (GW) 15-20 15-20 20-25 25-30 30-35 35-40 40-45 45-50 50-55 55-60 60-65 60-65

Inertia(GW s)∙ 239 271 304 354 403 459 511 556 593 631 664 700

Conclusion:As system inertia increases, FFR/PFR ratio gradually decreases to about 1 where PFR and FFR are approximately same in terms of arresting system frequency

Conclusion:As system inertia increases, FFR/PFR ratio gradually decreases to about 1 where PFR and FFR are approximately same in terms of arresting system frequency

15

Maximum of : – 98.8 percentile of the five minutes net load change

and deployment during the 30 days period to the time of the study.

– 98.8 percentile of the five minutes net load change for the same month of the previous year

– Additional adjustment based on CPS1 score for each hour

REG-UP and REG-DOWN

16

Contingency Reserve Service (CRS) Recover frequency from settling point to 60

Hz Build in a margin based on the amount of

CRS a single Resource can provide CRS need will be dynamic based on system

conditions just like PFRS and FFRS requirement

17

95 Percentile 6-Hour-ahead net-load forecast error

SRS for any 4-hour block is equal to 95 percentile of 6-hour ahead net load forecast error less Reg-Up, Contingency Reserve and portion of combined PFRS/FFRS

For extreme weather condition, SRS requirement to be based on unit forced outage rate

Supplemental Reserve

18

This is open to discussion

This is open to discussion

Determining AS Quantities

AS Framework

AS Framework

Technical Studies

Technical Studies

Regulatory Reqs

Regulatory Reqs

AS Methodology

AS Methodology

Expected Operating Conditions

Expected Operating Conditions

Hourly AS QuantitiesHourly AS Quantities

Technical AS ReqsTechnical AS Reqs

19

Efficiency versus Certainty in Setting AS Quantities

Efficiency versus Certainty

• Max Certainty:– A fixed amount of a particular service could be procured for every

hour based on the amount needed to cover worst case conditions– This would result in too much being procured for most hours

• Max Efficiency:– The amount to be procured for each hour of the next day could be

set prior to the DA market, based on expected conditions for that next day

– This would make it difficult to hedge requirements

• Need to determine an appropriate tradeoff– May vary by service

21

Options for PFRS/FFRS Procurement

1. ERCOT is offering five different options for procurement of PFRS and FFRS

2. The options differ based on how early market prefers to know the minimum quantities

3. Day-Ahead adjustment proposed is consistent with current protocol language and ERCOT does not anticipate performing the day-ahead adjustment routinely Day-Ahead analysis look at projected net load

conditions and unit commitmentsPlease note : The Options discussed for PFRS and FFRS

can be tailored for all AS products

22

Options for procurement of PFRS and FFRS

  DA MA YA

Option 1   √

Option 2 √

Option 3 ∆ √  

Option 4 ∆ ∆ √

Option 5 ∆ √

DA: Day-Ahead, MA: Month-Ahead, YA: Year Ahead√: Determine the needs for the entire period∆: Determine the “incremental” needs based on the system condition

23

Option I for PFRS and FFRS Requirements

Determine a number based on the study performed to simulate extreme condition and procure that amount for all hours

24

Proposed Options for PFRS/FFRS Requirements

Option IIPublish the minimum PFRS and FFRS

requirement and FFR to PFR equivalence ratio by 6am for the next operating day

Posting will include minimum requirements for each hour of the operating day

25

Option II for PFRS and FFRS Requirements

Time

AS

Req

uire

men

t

• Publish the requirement in Day-Ahead.

• Publish the requirement in Day-Ahead.

Real Time Needs

Day-Ahead

26

Proposed Options for PFRS/FFRS Requirements

Option IIIPublish the 80% of calculated minimum PFRS and

FFRS requirement, and FFR to PFR equivalence ratio by 20th of each month for the upcoming month

Make any necessary Day-Ahead adjustment and post the adjustments by 6 am for the next operating day

Monthly and Day-Ahead posting to MIS will include requirements and equivalency ratio between FFRS and PFRS, for each 4-hour block of the operating day

This percentage is open to discussion

27

Options III for PFRS and FFRS Requirements

Time

AS

Req

uire

men

t

• Publish the requirement using 80% of the need Month-Ahead

• Day-Ahead : determine incremental need

• Publish the requirement using 80% of the need Month-Ahead

• Day-Ahead : determine incremental need

Real Time Needs

80% of Month-Ahead Day-Ahead

28

Proposed Options for PFRS/FFRS Requirements

Option IVPublish 80% of calculated minimum PFRS and FFRS

requirement, and FFRS to PFRS equivalency ratio by December 1st, for each month of upcoming year

Perform monthly adjustments if needed and post it to MIS by 20th of each month for the upcoming month

Perform day-ahead adjustments and post it to MIS by 6 am for the next operating day

Annual, Monthly and Day-Ahead posting will include requirements and equivalency ratio between FFRS and PFRS, for each 4-hour block of the operating day

This percentage is open to discussion

29

Options IV for PFRS and FFRS Requirements

Time

AS

Req

uire

men

t

Real Time Needs

80% of Year-Ahead Month-Ahead

Day-Ahead

• Publish the requirement using 80% of the need Month-Ahead

• Month-Ahead/Day-Ahead : determine incremental need

• Publish the requirement using 80% of the need Month-Ahead

• Month-Ahead/Day-Ahead : determine incremental need

30

Proposed Options for PFRS/FFRS Requirements

Option VPublish 80% of calculated minimum PFRS

and FFRS requirement, and FFRS to PFRS equivalency ratio by December 1st, for each month of upcoming year

Perform day-ahead adjustments and post it to MIS by 6 am for the next operating day

Annual and Day-Ahead posting will include requirements and equivalency ratio between FFRS and PFRS, for each 4-hour block of the operating day

This percentage is open to discussion

31

Options V for PFRS and FFRS Requirements

Time

AS

Req

uire

men

t

• Publish the requirement using 80% of the need annually

• Day-Ahead : determine incremental need

• Publish the requirement using 80% of the need annually

• Day-Ahead : determine incremental need

Real Time Needs

80% of Year-Ahead Day-Ahead

32

Similar to PFRS and FFRS, Regulation , CRS and SRS requirements can be published day-ahead, monthly or annually

Other Services

33

Policy Decisions

Luminant ERCOT Steel Companies Energy Storage Association Co-operative Segment

Summarize Specific Policy Cuts for TAC consideration at the 8-28-14 TAC meeting

Discuss Specific Policy Cuts

35

Cost/Benefit Assessment Status

• Met with Segment Representatives on 8-20-14 and discussed the draft “High Level Description of the Cost Benefit Analysis of the Future Ancillary Service Framework”

• ERCOT to revise the document and include more language on deliverables expected from the Contractor.

• Plan to send out revised document to the group for their review after the 8-28-14 TAC meeting.

• The new target is to send out the RFP soon after the 8-28-14 TAC meeting

• Draft timeline indicates that a Contractor could possibly start in November and the final report and presentations could possibly be expected in February

Update on RFP for CBA

37

Synchronous Inertia Response Service

SIR is stored kinetic energy that is extracted from the rotating mass of synchronous machines following a disturbance in a power system

SIR is not included in the proposed future AS framework and the draft NPRR.

Synchronous Inertial Response

39

SIR can be provided by synchronous machines, whenever in operation.

Quantity of inertia contribution is determined as kinetic energy that can be provided by a synchronous machine during system imbalance:

2·H·MVA

where H is machine inertia constant in seconds, MVA is machine’s rated power

SIR is based on actual physical characteristics of a machine SIR is independent of machine’s operating point.

Synchronous Inertial Response

40

Maintain minimum Rate of Change of Frequency (RoCoF) Provide sufficient time from Point A to Point C, for the Ancillary

Services to respond. With increasing use of non-synchronous generation, changing load

characteristics, increase in Combined Cycle units (lower inertia), the system SIR is reduced.

As a result, RoCoF increases, leaving less time for primary frequency response to deploy and arrest the system frequency excursion.

SIR Need

41

42

SIR, Current Conditions

Case TimeGeneration

(MW)Load (MW)

WIND (MW)

Wind Penetration

Ratio

Inertia(GW-Sec)

A3/31/2014

2:00 24,822 24,534 9,514 0.39 266

B3/26/2014

20:00 36,423 35,827 10,120 0.28 354

C4/19/2014

2:00 24,313 24,822 6,822 0.27 260

Case A: Highest Wind Penetration CaseCase B: Highest Wind MW CaseCase C: Lowest Inertia Case

Synchronous Inertia (June 2013 - May 2014)

15-20 20-25 25-30 30-35 35-40 40-45 45-50 50-55 55-60 60-65

250

300

350

400

450

500

550

600

650

700

Netload Level (GW)

Ine

rtia

(G

W*s

)

Inertia v.s. Netload (June, 2013 - May, 2014)

Inertia=2*Kinetic Energy=2*H*MVA

43

To date, RoCoF at HWLL conditions during frequency events is around 0.2 Hz/s and the average time to reach frequency nadir is 4-6 seconds.

Analysis based on Jan-May 2014 system conditions indicated RoCoF of 0.65 Hz/s for two largest unit trip

SIR available under current operating conditions is still sufficient. SIR will not be introduced as a new AS yet. ERCOT started to monitor SIR in real-time since July 2014. ERCOT will continue to analyze the need of SIR and value of

emulated inertia* response from non-synchronous generation resources.

* Emulated Inertia Response is super-fast (20ms), short duration (8 - 20 s) active power injection in response to frequency decrease below pre-set threshold

SIR, Summary and Future Work

44

• ERCOT in collaboration with EPRI is conducting studies to verify value of wind generation resources providing EIR and/or PFR and associated uncertainty in the day ahead

• Two types of studies:

− Dynamic studies:

− EIR&PFR uncertainty: comparing Day Ahead wind power production forecast vs actual wind power production, DA wind turbine availability vs Real Time turbine availability and how that impacts EIR and/or PFR that wind generation resources can offer in the DA and deliver in RT.

• The results of these studies are expected by the end of this year

Case Study: EIR & PFR from Wind Generation Resources

45

WGRs do not provide AS

WGRs provide EIR

WGRs provide PFR

WGR provide EIR&PFR

HWLL √ √ √ √MWML √ √ √ √LWHL √ √ √ √