Customer Aggregations Among Potential Sources Of Demand Response ERCOT To Seek Via RFP To Address Summer 2024 Transmission Overloading

May 3, 2024

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Copyright 2010-24 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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ERCOT issued a market notice stating that it will seek to procure Demand response Capacity Sources for the summer of 2024 that provide up to 500 MW of relief on the relevant transmission facilities that deliver power from South Texas into the San Antonio region, as more fully described below

ERCOT said in a market notice that it, "has identified a need to procure capacity to meet Load and reserve requirements during the summer 2024 Peak Load Season."

"This need is informed by several factors, including significant Load growth since last summer and a reliability need to limit power transfers across specific transmission interfaces that deliver power from South Texas into the San Antonio region under certain conditions involving high, systemwide Demand," ERCOT said in the notice.

"Such conditions arise when (1) the ERCOT System is experiencing a near-scarcity of generating reserves to meet systemwide Demand, (2) insufficient generation exists to meet Demand in the portion of the ERCOT System north of the specific transmission constraints, and (3) an excess of generation is available to be exported from South Texas to the rest of the ERCOT System, including over the relevant transmission lines. The involved transmission facilities have been identified as Interconnection Reliability Operating Limits (IROLs), as defined by the North American Electric Reliability Corporation (NERC), because under certain circumstances, overloading of such transmission facilities and the occurrence of an additional contingency could lead to cascading outages that adversely impact the reliability of the Bulk Electric System. ERCOT is obligated by NERC Reliability Standard IRO-009-2, Requirement R2, to develop a plan to avoid the exceedance of IROLs," ERCOT said in the notice

ERCOT is seeking Demand response capacity that would provide up to 500 MW of relief on the constraints based on observed power flows over the relevant transmission facilities in the summer 2023 Peak Load Season. The maximum exceedance observed was 139%; 40% of each facility’s limit equals 472 MW. Thus, an amount of up to 500 MW will address a historical max exceedance recognizing continued Load growth, ERCOT said in the notice

The RFP is to be released on May 8, with proposals due June 13

ERCOT in the notice identified the following potential sources of Demand response that ERCOT considers acceptable for providing the capacity that ERCOT seeks to procure:

1. Customers at individual sites with peak Demand response capability exceeding 1 MW that have not previously exhibited price-responsive behavior and are not a participant of any other Demand response program that covers the hours of 3:00-9:00 PM CPT nor Emergency Response Service for the hours of 3:00-9:00 PM CPT.

2. Aggregations of Customer sites that have not previously exhibited price-responsive behavior, including sites with unregistered dispatchable generation that may offset Load if such aggregations exceed 1 MW of Demand response. Such sites may not be a participant of any other Demand response program that covers the hours of 3:00-9:00 PM CPT nor Emergency Response Service for the hours of 3:00-9:00 PM CPT.

ERCOT will only seek capacity from eligible providers of Demand response capable of contributing relief on the constraints, i.e. having beneficial shift factors on the constraints.

The time period during which awarded Demand response capacity sources could be deployed is 3:00-9:00 PM CPT, with no more than one deployment per day, and no deployment exceeding four hours. Additional details, including a maximum number of deployments over the contract period will be provided in the forthcoming RFP and Governing Document, ERCOT said

Qualified Scheduling Entities (QSEs) will be allowed to respond to the RFP and offer capacity sources of Demand response. A QSE’s submission must include a form identifying the sites that comprise the Demand response source.

ERCOT said in the notice that the demand response procurement is in accordance with ERCOT Protocols § 6.5.1.1(4), which ERCOT said recognizes ERCOT’s, "authority to prevent an anticipated Emergency Condition relating to serving Load in the current or next Season by procuring existing capacity that may be used to maintain ERCOT System reliability in a manner not otherwise delineated in the[] Protocols and the Operating Guides."

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