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July 26, 2019

TAC adopts key principles for Real-Time Co-optimization design

Mark Bruce
Posted 07/25/2019

The first batch of “key principles” for the design of Real-Time Co-optimization (RTC) of energy and ancillary services were presented to ERCOT Technical Advisory Committee (TAC) Wednesday.  All five key principles were adopted after lengthy discussion by the group.  The process for developing RTC functionality calls for TAC to endorse key design principles prior to ERCOT performing the detailed work necessary to develop specific proposed protocol language.

Key Principle 1.4 regarding systems that provide input into the Real-Time optimization engine

TAC endorsed the concept that under RTC, for Resources that are being economically dispatched by ERCOT, the current practice of pre-reserving portions of their capacity to provide for ancillary services through telemetry from the resource’s Qualified Scheduling Entity (QSE) will be discontinued.  Ancillary services awards in the future will be an output of RTC.

Key Principle 1.5 regarding the process for deploying ancillary services

Regulation instructions from ERCOT will become resource-specific.  This means Regulation Service will no longer be deployed by QSEs at the portfolio level and participation factors will be removed.

Key Principle 1.6 regarding ancillary service imbalance settlement with RTC

The current Real-Time ancillary service imbalance settlement process is driven by Operating Reserve Demand Curve (ORDC) prices and megawatt amounts; it does not consider that under RTC ancillary services will be awarded in Real-Time.  Because the ORDC process will be removed and ancillary services will be awarded in Real-Time, the ancillary services imbalance settlement process must be modified.  TAC endorsed the concept that the new ancillary services imbalance settlement process will not create new sources of uplift or make-whole charges or payments to Load Serving Entities (LSEs) and that ancillary service imbalance calculations will be created for each ancillary service product in the Real-Time Market (RTM).

Key Principle 3 regarding Reliability Unit Commitment (RUC)

The RUC process will continue to ensure adequate capacity to meet Real-Time energy and ancillary services needs but with added flexibility to resolve transmission constraints.  The RUC process will be midwifed to be able to use RUC ancillary services demand curves.  The values for these curves are to be determined at a later date.  Resources will be constrained in the amount of ancillary services they can provide by their qualifications and capabilities and proxy ancillary services offers will be used in RUC where ancillary services offers have not been submitted.  The enhanced RUC design will maintain the current process in which ERCOT operators will review recommendations from the RUC engine and make commitment decisions that allow adequate lead time for units to self-commit.

Key Principle 4 regarding the Supplemental Ancillary Services Market (SASM)

RTC implementation will eliminate the need for a SASM.

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