CRR Auction Scope

John Moseley

To outline aspects of the CRR market process to assure that these proposed CRR market protocols (as interpreted by ERCOT staff) produces the CRR market (as envisioned by the market participants), prior to writing finalized requirements documents.

(Auction Engine/SFT/Interfaces, etc)

Objective of Presentation

Presentation Outline• CRR Characteristics/Types• Auctioning Element Capacity (What

amounts?/ When?)• CRR Models• CRR Models in relation to Auction Engine• Insides of the Auction Engine• Nodal Definitions ->Settlement Points -> CRR Paths• CRR Auction Products

What are the characteristics of a CRR?

• Yes, it is a financial instrument, not a physical one.• Quantity of 1 MW for a duration of 1 hour• Defined source Settlement Point and defined sink

Settlement Point.• Can be a flowgate (bundle of directional elements)

not discussed here.

Types of CRRs• Point-to-Point Option

– Weekday On-peak– Weekend On-peak– Off-peak– 24x7

• Point-to-Point Obligation– Weekday On-peak– Weekend On-peak– Off-peak– 24x7

What’s being auctioned, when?Point-to-Point Transactions Weighed Against Element Capacity

100%

90%

55%

15%

Element Capacity

Annual Auction year 1

Annual Auction year 2Monthly Auctions

Year 1 Year 2 Year 3

Quick Annual Auction Timeline• Annual Auction occurs first Tuesday in December• Cases must be posted 20 Day Prior to Auction• Each Case must :

– Have outages and upgrades modeled– Voltage and stability limits (requires Dynamic Studies)– Remedial Action Plans (RAPs) modeled– Special Protection Schemes (SPSs) modeled– Have lines dynamically rated.

• This is not an automatic operation, each case is an engineering study, and will take approximately (BEST GUESS?) two weeks.

» Hence the information on hand in October will be used to produce a case modeling a situation that will occur in a December - 14 months later.

Single Option/Obligation PathOffered Auction Products

0700-2200 Mon-Fri

2300-0600 Mon-Sun

0700-2200 Sat-Sun

0000-2400 Mon-Sun

AuctionEngine

SFT Single Monthly Model

AuctionEngine

SFT Weekday On-Peak

SFT WeekendOn-Peak

SFTOff-Peak

Option 1

Option 2

Option 1: Use one case 24x7 representing Weekday On-Peak, Weekend On-Peak, Off Peak Option 2: Use three separate cases representing

Weekday On-Peak, Weekend On-Peak, Off Peak

How many models will be needed for each month?2 options have been proposed:

Single Option PathOffered Auction Products

0700-2200 Mon-Fri

2300-0600 Mon-Sun

0700-2200 Sat-Sun

0000-2400 Mon-Sun

Single Option PathOffered Auction Products

0700-2200 Mon-Fri

2300-0600 Mon-Sun

0700-2200 Sat-Sun

0000-2400 Mon-Sun

Single Option PathOffered Auction Products

0700-2200 Mon-Fri

2300-0600 Mon-Sun

0700-2200 Sat-Sun

0000-2400 Mon-Sun

Single Option PathOffered Auction Products

0700-2200 Mon-Fri

2300-0600 Mon-Sun

0700-2200 Sat-Sun

0000-2400 Mon-Sun

Single Option PathOffered Auction Products

0700-2200 Mon-Fri

2300-0600 Mon-Sun

0700-2200 Sat-Sun

0000-2400 Mon-Sun

Single Option PathOffered Auction Products

0700-2200 Mon-Fri

2300-0600 Mon-Sun

0700-2200 Sat-Sun

0000-2400 Mon-Sun

Single Option PathOffered Auction Products

0700-2200 Mon-Fri

2300-0600 Mon-Sun

0700-2200 Sat-Sun

0000-2400 Mon-Sun

Single Option PathOffered Auction Products

0700-2200 Mon-Fri

2300-0600 Mon-Sun

0700-2200 Sat-Sun

0000-2400 Mon-Sun

Single Option PathOffered Auction Products

0700-2200 Mon-Fri

2300-0600 Mon-Sun

0700-2200 Sat-Sun

0000-2400 Mon-Sun

Single Option PathOffered Auction Products

0700-2200 Mon-Fri

2300-0600 Mon-Sun

0700-2200 Sat-Sun

0000-2400 Mon-Sun

Single Option PathOffered Auction Products

0700-2200 Mon-Fri

2300-0600 Mon-Sun

0700-2200 Sat-Sun

0000-2400 Mon-Sun

Single Option PathOffered Auction Products

0700-2200 Mon-Fri

2300-0600 Mon-Sun

0700-2200 Sat-Sun

0000-2400 Mon-Sun

AuctionEngine

SFT Single Monthly Model

SFT Single Monthly Model

SFT Single Monthly Model

SFT Single Monthly Model

SFT Single Monthly Model

SFT Single Monthly Model

SFT Single Monthly Model

SFT Single Monthly Model

SFT Single Monthly Model

SFT Single Monthly Model

SFT Single Monthly Model

SFT Single Monthly Model

SFT Weekday On-Peak

SFT WeekendOn-Peak

SFTOff-Peak

SFT Weekday On-Peak

SFT WeekendOn-Peak

SFTOff-Peak

SFT Weekday On-Peak

SFT WeekendOn-Peak

SFTOff-Peak

SFT Weekday On-Peak

SFT WeekendOn-Peak

SFTOff-Peak

SFT Weekday On-Peak

SFT WeekendOn-Peak

SFTOff-Peak

SFT Weekday On-Peak

SFT WeekendOn-Peak

SFTOff-Peak

SFT Weekday On-Peak

SFT WeekendOn-Peak

SFTOff-Peak

AuctionEngine

SFT Weekday On-Peak

SFT WeekendOn-Peak

SFTOff-Peak

SFT Weekday On-Peak

SFT WeekendOn-Peak

SFTOff-Peak

SFT Weekday On-Peak

SFT WeekendOn-Peak

SFTOff-Peak

SFT Weekday On-Peak

SFT WeekendOn-Peak

SFTOff-Peak

SFT Weekday On-Peak

SFT WeekendOn-Peak

SFTOff-Peak

Option 1: 12 models Option 2: 36 modelsScaled for Yearly Auctions: 12 Months Auctioned Simultaneously

Monthly Auction Engine requires optimization of 4 Auction Spacesto maximize revenue.

24x7 Auction Product

On-peak Weekday, On-peak WeekendOff-Peak Auction Products

Annual Auction Engine requires (assuming annual and quarterly products) optimization of 68 Auction Spaces to maximize revenue.

Inside Auction Engine

Number of CRR Paths:A CRR Path is point-to-point where each point is a

Settlement Point.

Settlement point – A Resource Node, Load Zone, or Hub.

• Resource Node – The Electrical Bus defined in the Network Operations Model at which a Resource's measured output is settled. For a Generation Resource that is connected to the ERCOT Transmission Grid only by one or more radial transmission lines that all originate at the Generation Resource and terminate in a single substation switchyard, the Resource Node is an Electrical Bus in that substation. For all other Generation Resources, the Resource Node is the Generation Resource's side of the Electrical Bus at which the Generation Resource is connected to the ERCOT Transmission Grid

Nodal Protocol Definitions:• Resource - A term used to refer to both a Generation

Resource and a Load Resource. “Resource” used by itself in these Protocols does not include a Non-Modeled Generator.

• Generation Resource - A generator that is capable of providing energy or Ancillary Service to the ERCOT System and is registered with ERCOT as a Generation Resource. “Generation Resource” used by itself in these Protocols does not include a Non-Modeled Generator.

• Load Resource - A load that is capable of providing Ancillary Service to the ERCOT System and is registered with ERCOT as a Load Resource.

Nodal Protocol Definitions:• Load Zone - A group of Electrical Buses assigned to the same zone

under Section 3.4, Load Zones. Every Electrical Bus in ERCOT with a Load must be assigned to a Load Zone for settlement purposes. A NOIE Load Zone is a type of Load Zone.

• Hub - A designated Settlement Point consisting of a group of Resource Nodes and other Electrical Buses, including transmission junction points, and the settlement price calculation methodology that is set out in the definition of the Hub in Section 3.5.2, Hub Definitions. Hubs may only be created by an amendment to Section 3.5.2, Hub Definitions. The list of Resource Nodes and other Electrical Buses and the settlement price calculation methodology that define a Hub can never be modified and a Hub, once defined, exists in perpetuity.

How Many CRR Paths Are There?

• 3 Settlement Point model

• AB, BC, CA

• Since CRR are unidirectional, also have

• BA, AC, CB

Point A

Point BPoint C

How Many CRR Paths Are There in ERCOT?

Settlement Points:• 4 Load Zones• Up to 20 NOIE Load Zones• 3 DC Tie “Zones”• 6 Hubs• ~180 Plants / ~ 550 Generation Resource Nodes

• Hence an Estimate of between 200-583 Settlement Points Therefore: Depending on interpretation between

19,900-169,653 combinations and since CRR are single directional.

CRR Paths = combinations x 2Total CRR Paths = 39,800-339,306

How many monthly CRR products will exist?

• For Monthly auction: – Auction Engine will maximize revenue for bids

and offers on 39,800-339,306 CRR auction paths with 2 CRR types of 4 possible auction products per path while simultaneously conducting a security constrained feasibility test modeling 5000+ contingencies on one(1) or three(3) models containing 23,500+ Electrical Buses

For a Grand total of: 318,400-2,714,448 Auction Products offered in the

monthly auction.

How many yearly CRR products will exist?

• For Yearly auction: – Auction Engine will maximize revenue for bids

and offers on 39,800-339,306 CRR auction paths with 2 CRR types of 68 possible auction products per path while simultaneously conducting a security constrained feasibility test modeling 5000+ contingencies on twelve (12) or thirty-six (36) models containing 23,500+ Electrical Buses

For a Grand total of: 5,412,800-46,145,616 Auction Products offered in the

annual auction.

As a side note:

There is no 2-year auction, or 24 month auction. There are 2nd year auction

products which are valid in the year after the 1st year auction products expire. The 2nd year auction products are auctioned using the same models as the 1st year

auction models.

• This is a very big problem (mathematically, programmatically, tracking, testing, etc.), and regardless of whether or not functionality is used, since it is called for in the protocols, it must be implemented in the design specifications.

• Is this much functionality needed? If its not feasible what aspects of the auction are you willing to give up?

• Is it useful to the market to have something so complex that just the names of the CRR Auction Products can’t fit into a standard Excel spreadsheet?

Conclusion

Questions?