TRN101 - Module 1: Course Introduction - ERCOT.com

NODAL MARKET EDUCATION
Transmission 101

Transmission 101
Course Introduction

Course Objectives
Upon completion of this course, you will be able to
describe:
•Overall structure of Nodal Market
•Outage O t coordination di ti
•Network modeling
•TSP S activities and impacts on:
◦ Congestion Revenue Rights (CRR)
◦ Da Day-Ahead Ahead Market (DAM)
◦ Adjustment Period
◦ Real-Time Real Time Operations
Module 1 : Slide 3

Course Audience
This course is designed for:
• TTransmission i i SService i PProvider id OOperators t
• ERCOT Transmission System Operators
Other audiences:
– Outage g pplanning g & coordination ppersonnel
– Operations support & planning engineers
– Engineering technicians
– IT staff, Management
Module 1 : Slide 4

Course Modules
Modules in this course include:
Module 1
Nodal Market Basics
Module 2
Outage Coordination
Module 3
Module 4
Network Modeling
Congestion Revenue Rights
Module 5 Day-Ahead y through g Real-Time
Module 6
Additional Real-Time Topics
Module 1 : Slide 5

Module 1:
Nodal Market Basics

Module Objectives
Upon completion of this module, you will:
•Describe Nodal Market Overview
•Describe ERCOT and TSP responsibilities
•Describe Locational Marginal Price (LMP) basics
•Describe relationships between Transmission outages and
LMP calculations
Module 1 : Slide 7

Nodal Market Overview
Module 1 : Slide 8

Nodal Market Overview (continued)
Module 1 : Slide 9

Nodal Market Overview (continued)
Module 1 : Slide 10

Nodal Market Overview (continued)
Module 1 : Slide 11

Nodal Market Overview (continued)
Module 1 : Slide 12

Nodal Market Overview (continued)
Module 1 : Slide 13

Nodal Market Overview (continued)
Module 1 : Slide 14

Nodal Market Overview (continued)
Module 1 : Slide 15

Nodal Market Overview (continued)
Module 1 : Slide 16

Nodal Market Overview (continued)
Module 1 : Slide 17

Nodal Market Overview (continued)
Module 1 : Slide 18

Nodal Market Overview (continued)
Module 1 : Slide 19

Nodal Market Overview (continued)
Module 1 : Slide 20

Roles and Responsibilities
ERCOT Operations
• Facilitate markets
• Operate Ancillary Service, Day-Ahead and
Real-Time Energy markets
• Provide timely information relevant to the
operation of markets
• Ensure transmission system reliability
• Process outage and Network Model requests
• Coordinate transmission system planning
Module 1 : Slide 21

Roles and Responsibilities (continued)
Transmission Service Providers (TSP)
• Keep ERCOT continually informed of
transmission outages and updates
• PProvide id accurate and d timely i l ddata
• Comply with ERCOT dispatch instructions
• Coordinate transmission system planning
• Update & validate Network Operations Models
Module 1 : Slide 22

Locational Marginal Pricing
What is Locational Marginal Pricing
(LMP)?
Pricing: Cost
Marginal: ag a to o se serve e the e next e increment c e e oof Load oad
Locational: at an Electrical Bus
Module 1 : Slide 23

Locational Marginal Pricing
LMPs are determined by:
Day-Ahead Market
- Hourly LMPs
Real-Time Operations
- Every 5 minutes*
* LMPs generated at each SCED cycle (possibly more often than 5 minutes)
Module 1 : Slide 24

Locational Marginal Pricing
Important LMP Factors
Locational Marginal Pricing
BBalance l of f St Strong
reliability & economics market signals
• LMP Market control of
reliability
• Drives utilization of
transmission space p
Effi Efficient i t
Dispatch
• Reliability problems • ERCOT instructed
• Price response to
reliability problems
• At Resource level
Module 1 : Slide 25

Locational Marginal Pricing
Calculating LMPS
•Calculated at “Network Nodes”
•Points of connection to grid
– Source (injection point)
– Sink (withdrawal ( point) p )
– Switching station
Module 1 : Slide 26

Locational Marginal Pricing
Calculating LMPS
•DC DC PPower Fl Flow model d l used d tto calculate l l t LMP LMPs
Constraints
Real Real Power
Studies:
Voltage Stability
Transient Stability
Transmission Limits
GGeneric i Li Limits it
DC
Model
LMPs
Module 1 : Slide 27

Settlement Point Prices
LMPs are used to calculate
Settlement Point Prices
• Financial settlement finalized at
Settlement Points
Module 1 : Slide 28

Settlement Point Prices
Types of Settlement Points:
Resource Load
Nodes Zones
Hubs
Module 1 : Slide 29

Settlement Point Prices
What is a Resource Node?
• An Electrical Bus where a Resource’s
measured output is settled
Settlement Point Price
• Calculated from
LMPs at the Resource Node
Resource
Nodes
Resource
Electrical
Bus
Module 1 : Slide 30

Settlement Point Prices
What is a Load Zone?
• A grouping i of f El Electrical t i l BBuses with ith LLoad d
Settlement Point Price
• Calculated from the load-weighted average of
all LMPs in the zone
Three types of Load Zones
• Competitive Load Zones
• NNon-Opt O t in i Entity E tit (NOIE) Load L d Zones Z
• DC Tie Load Zones
Load
ZZones
All Load must be assigned to a
Load Zone for Settlement purposes
Module 1 : Slide 31

Settlement Point Prices
What is a Hub?
• GGrouping i of f 345kV El Electrical t i l bbuses
• Defined by Protocols
Settlement Point Price
• Calculated from the simple
average of LMPs at defined
Hub buses
Hubb
Module 1 : Slide 32

Settlement Point Prices
Six Hubs in ERCOT Market
Four Regional Hubs
• North
• West
• South
• Houston
Two Average Hubs
ERCOT Hub Average
ERCOT Bus Average
Module 1 : Slide 33

Settlement Point Prices
How often are LMPs & Settlement Point Prices calculated?
• Every Hour
•LMPs ffor
each electrical bus
• Settlement Point Prices
• Every 5 minutes
• LMP LMPs ffor each h electrical l t i l b bus* *
• Every 15 minutes
• Settlement Point Prices
* LMPs generated at each SCED cycle (possibly more often than 5 minutes)
Slide 34

Settlement Point Prices
Impact of Outages on Prices
•Outages O t and d limits li it iimpact t
– Locational Marginal Prices (LMPs)
– Settlement Settlement Point Prices
Outage
Outage
Outage
Module 1 : Slide 35

Scenario: Outages and LMPs
G1 QSE offers 100 MW @ $30/MWh
100 100 MW Li Limit it
G2 QSE offers 200 MW @ $10/MWh
150 MW
Load
L1
Module 1 : Slide 36

Scenario: Outages and LMPs (continued)
G1 QSE offers 100 MW @ $30/MWh
0 MW dispatched
@ $ $30/MWh
150 MW dispatched
@ @$ $10/MWh
100 100 MW Li Limit it
G2 QSE offers 200 MW @ $10/MWh
150 MW
Load
L1
Module 1 : Slide 37

Scenario: Outages and LMPs (continued)
G1 QSE offers 100 MW @ $30/MWh
0 MW dispatched
@ $ $30/MWh
150 MW dispatched
@ @$ $10/MWh
100 100 MW Li Limit it
G2 QSE offers 200 MW @ $10/MWh
L1
150 MW
Load
LMP = $10 / MWh
Paid to Generators (G2)
G1 ( 0 MW * $30/MWh ) = $0
G2 ( 150 MW * $10/MWh ) = $1500
Charged g to Loads (L1) ( )
( 150 MW * $10/MWh ) = $1500
Module 1 : Slide 38

Scenario: Outages and LMPs (continued)
G1 QSE offers 100 MW @ $30/MWh
100 100 MW Li Limit it
G2 QSE offers 200 MW @ $10/MWh
150 MW
Load
L1
Module 1 : Slide 39

Scenario: Outages and LMPs (continued)
G1 QSE offers 100 MW @ $30/MWh
50 MW dispatched
@ $ $30/MWh
100 MW dispatched
@ @$ $10/MWh
100 100 MW Li Limit it
G2 QSE offers 200 MW @ $10/MWh
150 MW
Load
L1
Module 1 : Slide 40

Scenario: Outages and LMPs (continued)
G1 QSE offers 100 MW @ $30/MWh
50 MW dispatched
@ $ $30/MWh
100 MW dispatched
@ @$ $10/MWh
100 100 MW Li Limit it
G2 QSE offers 200 MW @ $10/MWh
L1
150 MW
Load
LMP = $30 / MWh
Paid to Generators (G2)
G1 ( 50 MW * $30/MWh ) = $1500
G2 ( 100 MW * $10/MWh ) = $1000
Charged g to Loads (L1) ( )
( 150 MW * $30/MWh) = $4500
Module 1 : Slide 41

Scenario: Outages and LMPs (continued)
G1 QSE offers 100 MW @ $30/MWh
50 MW dispatched
@ $ $30/MWh
100 MW dispatched
@ @$ $10/MWh
100 100 MW Li Limit it
G2 QSE offers 200 MW @ $10/MWh
• Differences (between payments and
charges) goes into congestion rent
• Covered in more detail later
L1
150 MW
Load
LMP = $30 / MWh
Paid to Generators (G2)
G1 ( 50 MW * $30/MWh ) = $1500
G2 ( 100 MW * $10/MWh ) = $1000
Charged g to Loads (L1) ( )
( 150 MW * $30/MWh) = $4500
Module 1 : Slide 42

Scenario: Outages and LMPs (continued)
G1 QSE offers 100 MW @ $30/MWh
0 MW dispatched
@ $ $30/MWh
50 MW dispatched
@ @$ $10/MWh
Sometimes Outages don’t impact LMPs . . .
100 100 MW Li Limit it
G2 QSE offers 200 MW @ $10/MWh
L1
50 MW
Load
LMP = $10 / MWh
Module 1 : Slide 43

Scenario: Outages and LMPs (continued)
G1 QSE offers 100 MW @ $30/MWh
0 MW dispatched
@ $ $30/MWh
50 MW dispatched
@ @$ $10/MWh
Sometimes Outages don’t impact LMPs . . .
100 100 MW Li Limit it
G2 QSE offers 200 MW @ $10/MWh
RResult: lt
• Either line can support load
• No change in LMPs
L1
50 MW
Load
LMP = $10 / MWh
Module 1 : Slide 44

Module Summary
In this module we:
• IIntroduced t d d th the ERCOT Nodal N d l Vi Visual l PProcess MMap
• Identified key roles and responsibilities
• Discussed Discussed basics of Locational Marginal Prices (LMPs)
• Discussed outage impacts on LMPS
Module 1 : Slide 45