ERCOT Overview Paul Wattles Senior Analyst, Market Design & Development Solar Energy Industries Association
History of Electric Reliability Council of Texas, Inc. 1941 Utilities band together to aid war effort 1970 Texas Interconnected System (TIS) forms ERCOT to comply with North American Electric Reliability (NERC) requirements 1981 ERCOT assumes central operating coordinator role 1995 Texas legislature votes to deregulate wholesale generation 1996 ERCOT becomes first Independent System Operator (ISO) in US 1999 Legislature votes to deregulate retail electric market 2001 Ten control centers merged into one control center 2002 Retail electric market opens, enabling customer choice for 6.1 million 2010 ERCOT implements Nodal Markets 2012 ERCOT has about 600 employees and an annual budget of about $170 million ERCOT is a 501 (c)(4) nonprofit corporation 2
ERCOT Overview RESPONSIBILITIES The Texas Legislature restructured the Texas electric market in 1999 by unbundling the investor-owned utilities and creating retail customer choice in those areas, and assigned ERCOT four primary responsibilities: System reliability planning and operations Open access to transmission Retail switching process for customer choice Wholesale market settlement for electricity production and delivery. QUICK FACTS 75% of Texas land 85% of Texas load More than 40,500 miles of transmission lines 550+ generation units 68,379 MW peak demand (set August 3, 2011) Physical assets are owned by transmission providers and generators, including Municipal Utilities and Cooperatives ERCOT connections to other grids are limited to direct current (DC) ties, which allow control over flow of electricity (Maximum of 1100 MW on a 69,000 MW system) 3
North American ISOs and RTOs Independent System Operators and Regional Transmission Organizations are the air traffic controllers of the bulk electric power grids 4
One more way of looking at ERCOT Dozens of REPs competing for residential and small commercial accounts Mostly flat-price options including prepaid, renewables AMI deployment underway Utility in the traditional sense in no longer a valid term MWh 12/1/10 thru 8/11/11 Muni s and co-ops are still vertically integrated Many have existing and developing smart grid initiatives: -- AMI -- Smart thermostats -- Other DLC Possible triggers: Real-time prices, congestion management, 4CP response 5
ERCOT Operations Fundamental concept: generation must match load at all times ERCOT directs traffic on the grid to maintain reliability and ensure supply of electricity Balances load and generation at all times (instantaneously!) Manages congestion (flow of power) across the system Secures resources to meet reliability requirements under normal and contingency conditions Coordinates planned outages of generators and transmission lines Coordinates emergency actions & recovery 6
Annual Energy & Peak Demand (2003-2011) 340,000 330,000 320,000 310,000 300,000 Total 9-year Growth Energy 17.5% Peak Demand 13.8% Annual Energy and Peak Demand 299,227 305,715 307,064 62,339 62,188 312,401 62,174 308,278 Annual Energy Peak Demand 63,400 319,097 65,776 335,000 70,000 68,379 68,000 66,000 64,000 62,000 GWh 290,000 284,954 60,095 289,113 60,274 MW 60,000 280,000 58,531 58,000 270,000 56,000 260,000 54,000 250,000 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year 52,000 7
May 2012 Capacity, Demand and Reserves Report (CDR) 95,000 MW Currently Installed Resources MW under Interconnection Agreements Coal Projects under FIS Natural Gas Projects under FIS Other Fuel Projects under FIS Solar Projects under FIS Wind Projects under FIS Forecast Forecast + Reserve * FIS = Full Interconnection Studies Firm Load Forecast + 13.75% Reserve 90,000 85,000 MW 80,000 Resources 75,000 70,000 Firm Load Forecast 65,000 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 8
Summer Peak Day Load Shape with Fuel Mix 80,000 August 3, 2011 Natural Gas Wind Nuclear Hydro Other DC Imports Coal Energy Price $3,500 70,000 $3001 $3,000 60,000 $2,500 50,000 Natural Gas MW 40,000 $2,000 $1,500 $/MWh 30,000 20,000 Wind Nuclear $1,000 10,000 $25 - $75 DC Imports Coal $500 0 $0 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 9
Weather impacts on load by customer type Wednesday March 9, 2011 5:15 PM ERCOT Load: 31,262 MW Temperature in Dallas: 64 Residential 51.2% (~35,000 MW) Wed., Aug. 3, 2011 5:00 PM ERCOT Load: 68,416 MW Temperature in Dallas: 109 Residential 27.4% (~8,500 MW) Small Commercial 25.2% Small Commercial 28.9% Large C&I 43.7% Large C&I 23.7% Customer class breakdown is for competitive choice areas; percentages are extrapolated for munis and co-ops to achieve region-wide estimate Large C&I are IDR Meter Required (>700kW) 10
Price duration curve Since Nodal market launched (Dec. 10), high prices and grid shortage conditions are much more closely aligned than before $/MWh 4000 3000 2000 $/MWh # Hours % of Hrs. $<0 - $100 8,586 98.0% $100 - $1,000 137 1.6% $1,000 - $2,000 12 0.1% $2,000 - $3,000 25 0.3% 1000 0 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent of Time Equal To or Exceeding North Load Zone Settlement Point Prices, 2011 (typical of all 4 major Load Zones) 11
Wind Generation April 2012 ERCOT is #1 in the U.S. in wind capacity. Our capacity is three times the amount of #2 (Iowa). If Texas were a separate country, we d be #6 in the world. 12
Smart grid rollout Advanced Meter Deployment in the Competitive Choice Areas May 2012 82.1% of the ERCOT Competitive Load settled with 15-min interval data (AMS and IDR) Advanced meters give customers the data they need to make educated decisions about their electricity usage 13
Questions? ON OFF 14