EnergyTech: ERCOT moves forward on pilot to evaluate DERs in wholesale markets

Oct. 24, 2022
Rod Walton, senior editor of EnergyTech, describes an ERCOT pilot project with implications for microgrids.

Rod Walton, EnergyTech senior editor, describes an ERCOT pilot project with implications for microgrids.

FERC 2222 is coming to the Lone Star State.

The Electric Reliability Council of Texas (ERCOT), the system operator which manages the state’s grid, has authorized a pilot project to evaluate the participation of aggregated distributed energy resources (DERs) in the ERCOT wholesale electricity market. The approval follows the Texas Public Utilities Commission’s directive on studying the impact of DERs into the competitive grid market.

This could eventually open up the inclusion of megawatts (MW) and maybe gigawatts of generation capacity from rooftop solar, residential and business battery storage and microgrids within the Texas system. For now, ERCOT plans to keep limits and controls on the pilot study.

“Initial system-wide participation will be limited to 80 MW of registered capacity … and 40 MW of Non-Spinning Reserve Service (Non-Spin),” reads the ERCOT document on the project. “These system-wide limits will initially be used to create Load Zone and Qualified Scheduling Entity (QSE) level limits to allow for the opportunity of diverse geographical and technology participation.”

In 2020, the Federal Energy Regulatory Commission, which included Trump administration appointees from both parties, approved its FERC Order 2222, which focused on removing barriers to aggregated DER assets to participate in all regional whole electric markets. This includes system operators such as PJM Interconnection, ISO-New England, Southwest Power Pool, California ISO and Midcontinent Independent System Operator (MISO).

Some of those ISOs are already implementing phases of the FERC order while others are working through complications. Incorporating intermittent renewables involves unknowns and bi-directional flow challenges to the grid.

The ERCOT order comes as Texas adds more and more renewable capacity. The state already is the largest for installed wind power and in the top five for solar, while increasingly considering the impact of battery storage and microgrids (which can include solar, storage and gas-fired generators) on the system.

“Lessons learned from the early phases will be considered when designing additional phases for the Pilot Project that could create opportunities to expand overall participation while maintaining the reliable operation of the transmission and distribution grid,” the ERCOT document reads. “The use of a phased approach will allow for the pilot to commence as early as possible while minimizing changes to ERCOT and Distribution Service Provider (DSP) systems. It allows ERCOT to gain valuable information before making changes to ERCOT rules and systems that may be needed for the longer-term integration of ADERs.”

DER participants which desire to interconnect their generation into the grid must meet ERCOT telemetry and metering accuracy standards. The grid can be endangered when dispatched generation is unpredictable and threatens the frequency range.

The first phase of the ERCOT DER study will look at dispatching and pricing challenges as well as managing congestion on the system. The pilot also will analyze the ability of aggregated DER (ADER) assets to provide primary frequency response services and other potential activities.

The system operator’s ADER Task Force will prepare its Phase 1 report about one year after the first wholesale market offer comes from an aggregated DER participant.

Article courtesy of EnergyTech. Both EnergyTech and Microgrid Knowledge are part of Endeavor Business Media.

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