AUSTIN, Texas – Wind energy is quickly becoming a dominant force in ERCOT’s resource mix, and the grid operator is making changes to address it.
Speaking to a packed house at a Gulf Coast Power Association luncheon last week, Kenan Ögelman, ERCOT’s vice president of commercial operations, said ERCOT is adding a desk in its control room to monitor renewables and rethinking its ancillary services needs.
“That’s how big a deal this is both in terms of managing the system conditions and giving the correct response to what happens,” he said. “We feel we need people dedicated to watching that.”
Fast response, rapid ramping and managing inertia are the biggest needs, he said.
Wind production on ERCOT’s system surpassed nuclear production in 2014 and its growth curve is “more exponential than linear,” Ögelman said.
“The mix of resources is changing,” he said. “The characteristics of those resources is also different than what we had previously, so doing business as we had – as far as ERCOT goes – is different.”
ERCOT’s ancillary services were designed in the 1990s and assumed heavy reliance on gas cogeneration facilities.
Its reliability unit commitment, for example, reimburses unused units but is capped and doesn’t allow for recovering all costs, Ögelman said. The current market isn’t pricing that service efficiently, which is sending inappropriate pricing signals, he said.
Chief among ERCOT’s needs is maintaining reliability. Although ERCOT’s wind-speed data date back to the 1950s, monthly output can vary unpredictably. However, as the lowest-cost resource on the system, wind tends to be dispatched, Ögelman said.
While not a problem during high demand, it becomes one during the spring and fall shoulder periods when load is low and wind makes up a high percentage of dispatched generation. Because wind output can change dramatically, ERCOT has to manage the risk that it might disappear.
This is further complicated by the fact that it’s hard to keep non-renewables operating during low loads. The abundance of wind – running because production tax credits offset uneconomic bids – have increasingly resulted in negative prices on the system from midnight through 5 a.m., Ögelman said.
“The market is saying you have to pay to stay on,” he said.
So with generation at risk of suddenly disappearing and the market providing no incentive to diversify sources, ERCOT is seeking solutions. The process starts with more information to develop better models and forecasts. For example, some risk can be mitigated, he said, by diversifying where the intermittent generation comes from on the system. Wind resources from the three main regions – the panhandle, West Texas and the Gulf Coast – tend to provide wind supply at different times and can balance each other out. For solar, the movement of the sun across the system requires an extra hour in the morning to reach full capacity, but offers an extra hour in the afternoon.
Another challenge is that low load combined with low inertia gives the system no way to recover from disturbances, raising the threat of cascading outages, Ögelman said.
ERCOT performed a “future ancillary services” study, which found that the inertia need will vary based on the capacity of combined cycle units on the system, which provide twice as much inertia as other sources. As economical as they are, even combined cycle units can be forced offline with high enough wind penetrations.
Generation units with governors or other frequency-control devices provide automatic systemwide frequency response. However, as wind pushes them off the system, that service disappears. ERCOT is also looking at how to incentivize load, which can respond quickly and then return to normal. Frequency response provided by the load, Ögelman noted, can be more valuable than that coming from generators.
ERCOT plans to talk to stakeholders at the Technical Advisory Committee about ancillary services to see if needs can be met with market design features that stakeholders want. It will also look into how best to analyze inertial service. The tools exist, Ögelman said, but aren’t fine-tuned to what’s optimal for a market design and reliability standpoint.
The amount of intermittent resources on the system can continue to increase, he said, as long as they agree to be curtailed as necessary.
[NWW note: See also: “Market effects of wind penetration in ERCOT: How wind will change the future of energy and ancillary service prices” (executive summary), by LCG Consulting, October 2016
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