Highlighting issues with ERCOT's demand curves for ancillary services and SCED's ability to make trade-offs between products.
Discussion on hierarchical pricing tiers and the need to potentially use higher value products over slow-ramping products.
Methodology for disaggregating the AORDC, including two components: fitting product amounts in the flat portion and sloping the remaining down the demand curve.
Figures presented to clarify methodology and discussions on price caps.
Explains equations used for disaggregating ORDC in simpler terms.
Explanation of distribution of products in non-linear portions of AORDC, written in technical language with additional commentary for clarity.
Preparation to review comments from Shams and others, highlighting a need to revisit uplift questions and price cap issues.
Shams Siddiqi with Crescent Power, representing HEN, discussed the interpretation of ERCOT's AORDC protocols based on February's presentation.
Clarified the distinction between ORDC adders and ancillary service demand curves (ASDCs).
Explained the concept of adders added to energy prices to reflect the opportunity cost of providing ancillary services without real-time co-optimization.
Discussed ERCOT's method of fitting the AORDC using regression on adder values, not the MCPC, potentially undervaluing the demand curve.
Highlighted that the current protocols lack clarity on the equation for curve fitting the AORDC and contain inaccuracies.
Advocated using the unaltered ORDC for the sloping portion of the AORDC to reflect accurate demand during scarcity.
Emphasized the necessity to fix the protocols and clarify the AORDC curve while considering HEN recommendations.
Concerns were raised about the impact of the implementation of RTC and the market price suppression effect.
Discussed discrepancies in historical data used for mu and sigma in the AORDC calculation.
ERCOT mentioned the flexibility in the protocols for fitting different regression models, but emphasized project timeline risks.
Former discussions indicate there's no uplift for capped prices at $5000, aligning with past NPRR decisions.
ERCOT's operations showed preference for a blended approach with adjusted prices that preserve necessary ancillary services.
▶️3.2 - Potential ERCOT comments to remove 100 point requirement on ASDC
ERCOT is considering removing the 100-point requirement for linear approximation of ancillary service demand curves to reduce complexity and improve accuracy.
The current requirement may create complexities in IT design, especially given the increased slope in the curves for ancillary services.
The proposal suggests utilizing more than 100 points for a more accurate representation of the curve shapes.
Discussion on capping MCPCs (Market Clearing Price for Capacity) for the day-ahead market, considering different max prices on the curves and no explicit capping for energy prices.
Question raised about potential need for capping in day-ahead market due to disparity in max prices on the curves, ensuring MCPCs do not exceed certain limits.
Discussion about maintaining or changing cap for system lambda and consideration of energy pricing strategies in the day-ahead market.
Clarification that the real-time ancillary service price cannot exceed $5,000.
Suggestions to tweak NPRR with minor adjustments and terminology updates, replacing ORDC with AORDC segments.
Plans to file comments incorporating these discussions and suggested updates to the protocols.
Current proxy offer formulation does not align with the true price of providing services.
Suggestion to use a methodology similar to the verifiable cost method for energy.
Technology-specific offer prices could be employed; however, this might involve complications such as including opportunity costs, especially for batteries.
Discussion on whether there should be penalties for failing to submit complete offers.
Consideration of implementing an explicit 'must offer' requirement, which is not typical for ERCOT as it doesn't have a capacity market.
The proxy offer level should reflect the service cost more accurately.
Suggestion of using a fixed price per ancillary service to simplify the process.
Concerns over high max price numbers potentially encouraging incomplete offers.
Discussion on involving different cost components for different resources, e.g., wear and tear for turbines, opportunity costs for batteries.
Concerns about zero-priced reserve capacity being reduced through NPRR1270.
Discussion about maintaining appropriate revenue streams for older resources to prevent them from leaving the ERCOT market.
Mention of the need to consider the cost structure of older power plants when determining proxy offers.
▶️4.1.1 - Potential IMM addition of must offer and compliance language
Acknowledgment of differences between a ‘must offer’ requirement and a capacity market construct, and the overlap with self-commitment.
Concerns about the need for transparency and the potential for arbitrary shortages if static values are implemented.
Importance of complete and accurate information submission from market participants to avoid penalties.
Clarification that ‘must offer’ is implied, but not explicitly mandated in real-time scenarios unless proxies are created.
Discussion on the challenges of setting proxy offers, especially for resources with higher maintenance costs.
Consideration of the 95th percentile as a baseline for offer values and the need for flexibility and transparency in adjustments.
Concerns about applying uniform thresholds across different services, particularly non-spin services.
Need for potential minimum values for certain services like non-spin to prevent them from being too low when plans are small.
Discussion on specific scenarios with Day-Ahead Market (DAM) Energy Storage Resources (ESR) offers, including High Sustained Limit (HSL) and Low Sustained Limit (LSL).
Explanation that because proxy offers are not created like in real time, a specific approach is required to ensure the DAM solution is feasible.
Processes for handling ESR offers are similar to self-committed resources but include new considerations such as negative LSLs.
Details on how ESRs offer into DAM with potentially negative and positive megawatt ranges.
Clarification that submission of an ESR energy bid off curve is considered online and self-committed in DAM.
Protocols outline treating self-committed generators by ignoring resource constraints other than HSL.
Explanation of a two-step process for generator treatment: setting LSL to zero if greater than zero, and extending the energy offer curve to zero.
Necessity of these steps to allow DAM flexibility without causing infeasible solutions.
How ancillary services are handled alongside this process.
Adjustments for ESRs include handling negative LSL/HSL values.
Examples shown of normal scenarios where Energy Bid/Offer Curve (EB/OC) includes zero megawatts and scenarios requiring adjustment.
Q&A session addressing clarifications and practical examples related to these processes.
Discussing the strategy of ensuring ESRs can be dispatched from zero megawatts to prevent DAM infeasibility.
Addressing the possibility of future improvements for transparency in the process.
▶️7.3 - IT updates from TWG 1/30/25 RTC Digital Certs and ICCP requests
