ERCOT Provides Implementation Options For New Dispatchable Reliability Reserve Service (DRRS)

June 26, 2023

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Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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ERCOT filed a presentation at the Public Utility Commission of Texas (Commission) which summarizes two potential implementation options for a Dispatchable Reliability Reserve Service (DRRS), which is required by recent legislation

House Bill (HB) 1500 amended Public Utility Regulatory Act (PURA) § 39.159 to require that ERCOT develop and implement an ancillary services program to procure DRRS. The statutory deadline for DRRS program implementation is December 1, 2024.

PURA § 39.159(d) requires that DRRS be procured on a day-ahead and real-time basis, that the quantity of services be determined based on historical variations in generation availability, and that Reliability Unit Commitment (RUC) be reduced by the amount of DRRS procured. Furthermore, Resources participating in DRRS must be capable of running at least four hours at their High Sustained Limit (HSL), be online within two hours of instruction, and have dispatch flexibility to address inter-hour operational challenges.

ERCOT has identified two potential options to implement DRRS -- one that can be implemented on an expedited timeframe by modifying existing products ('Option A') and another that could be developed over a more extended timeframe that would result in an entirely new product ('Option B').

ERCOT said that Option A would entail the repurposing of the current Non-Spinning Reserve (Non-Spin) ancillary service to serve as the new DRRS by allowing provision by longer lead-time Resources (Non-Spin currently requires participating Resources to be online or interruptible within 30 minutes). ERCOT would also procure more ERCOT Contingency Reserve Service (ECRS) ancillary services to cover the gap created by the modified Non-Spin’s longer lead time. Go-live for Option A could be achieved by November 2024. ERCOT said that Option A is advantageous because it is the quickest means to implement DRRS while also minimizing the impact on other priority projects, such as Real-Time Co-optimization, the Performance Credit Mechanism, the Energy Storage Resource single model, and other initiatives. ERCOT said that the drawbacks of Option A include an increased reliance on the recently launched ECRS product with which ERCOT has relatively less experience, the need to further consider how best to address the lack of overlap between the 2-hour ECRS duration requirements and the 2-hour DRRS lead time, and the general loss of incentives for Resources with a 30-minute lead time

Under Option B, ERCOT would create a new ancillary service for off-line, dispatchable Resources that can be available within two hours and are able to run for at least four hours at their HSL. Go-live could be achieved by the third quarter of 2025. ERCOT said that the advantages of Option B include that it would minimize impacts to the structure of existing Ancillary Services, retain incentives for existing 30-minute lead-time Resources via Non-Spin, and ensure that all Resources providing the new product have comparable requirements, are deployed equitably, and receive equivalent compensation. ERCOT noted that, for both Options A and B, DRRS must be an off-line product in order to mitigate the need for RUC, as required by section 39.159(d)(3), as amended by HB 1500. ERCOT said that the primary disadvantage of Option B is that, due to the complexity of developing a new standalone product, it would not meet the statutory deadline of December 1, 2024 even if it is given top priority over other projects. Additionally, Option B would require Market Participant system changes and market readiness testing, it would be more complex than Option A for dispatch by the control room, and it would have a significant impact on other high-priority projects.

Projects 54444, 55156

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