1
• Financial Market (Just like DAM)
- Energy Only
- No physical obligation, No ERCOT deployments
• Customers/LSEs strategies:
- Buy their supply at an “up to price”
- Sell back supply “at or above price”
Hour Ahead MarketFocus on Demand Response
EDF TRADING
DAM DRUC Hour-Ahead Operating HourAdjustment PeriodDay-Ahead Operations Operating Period
Hour-Ahead Operating HourAdjustment Period Operating Period
Submit bid/offers
Run Hour Ahead Mkt
Notice to Participants Known Price
2
• HAM is a market solution for demand response. It is in addition to It allows the demand response to extract value from the market. Provides Load what they have asked for:
- Notice Period to curtail
- Known Price
- No ERCOT performance criteria
• The HAM is another market run by ERCOT for each hour, one hour ahead of each hour.
- Closer to real-time, the better information
- HAM is in addition to DAM
• Requires a three settlement system
- DAM settlement
- HAM settlement (DAM awards settle at HAM price)
- RT settlement (HAM awards settle at RT price.
• Requires two steps of PTP Obligations
- DAM to HAM
- HAM to RT
• PTP Obligation award in DAM should cover your collateral in the PTP in the HAM. Allowing carrying CRR hedge to RT.
A Few Details
EDF TRADING
3
Load Example OneCustomer Arranges for supply in the forward marketOffers to Sell Back Supply at VOLL
4
ERCOT
LSE
Customer
$
energy
energyLoad QSE
$
TransactingQSEs
energy
$
imbalance
imbalance
Base TransactionsExplanation via Follow the Energy and $
5
ERCOT
LSE
Customer
$300
10 MWH
10 MW
HLoad QSE
$300
TransactingQSEs
10 MWH
$300
$0
0 MWH
Energy Trade Transaction10 MW customer with Energy price at $30/MWH
6
ERCOT
LSE
Customer
$4500
6 MWH
Net 6 M
WH
Load QSE $300
Transacting QSEs
$4800
4 MWH
HAM Transactions Customer offers to sell 4 MW @ $1000 @ zoneHAM clears $1200 @ zone
MW$ $4800
10 MWH
$300
7
ERCOT
LSE
Customer
$4500
6 MWH
6 MW
H
Load QSE4 MWH shortin HAM @$4800
Transacting QSEs
$0
0 MWH
RT Transactions Customer reduces Consumption to 6 MW No imbalance
MW$ $4500
10 MWH
$300
8
RT Transactions Customer Consumes 7 MW creating an imbalance Zonal clearing price is $3000
ERCOT
LSE
Customer
$1500
7 MWH
7 MW
H
Load QSE4 MWH shortin HAM @ $4800
Transacting QSEs
$3000
1 MWH
MW$ $4500
10 MWH
$300
$3000
9
• $ exchange could be exact, as shown
- Fits large industrial
• $ exchange could be a flat payment to customer for curtailment
- Fits residential
• REPs and Customers may structure the transaction that best fits their needs.
Exchange of $ between LSE and Customer
10
Load Example TwoCustomer Buys from the Spot MarketBids in the HAM at an Up to Price
11
ERCOT
LSE
Customer
$0
0 MWH
?? MW
HLoad QSE
$??
TransactingQSEs
0 MWH
$0
$0
0 MWH
Energy Trade Transaction
12
ERCOT
LSE
Customer
$300
10 MWH
10 MW
H
Load QSE $300
Transacting QSEs
$300
10 MWH
HAM Transactions Customer bids to buy 10 MW @ $35 @ zoneHAM clears $30 @ zone
MW$
0 MWH
$0
13
ERCOT
LSE
Customer
$300
10 MWH
10 MW
H
Load QSE10 MWH longin HAM
Transacting QSEs
$0
0 MWH
RT Transactions Customer Consumes 10 MW, no imbalance RT Zonal Price is $100
MW$ $300
0 MWH
$0
14
ERCOT
LSE
Customer
$400
11 MWH
11 MW
H
Load QSE10 MWH longin HAM
Transacting QSEs
$100
1 MWH
RT Transactions Customer Consumes 11 MW RT Zonal Price is $100
MW$ $300
0 MWH
$0
$100