ERCOT Testimony to Senate Business y & Commerce Committee, Chairman John Carona August 24, 2010 Trip Doggett President & CEO
Reliability and Generation Adequacy Adequacy 2
Installed Nuclear capacity = 5,091 MW Total capacity = 81,626 MW Example – Nuclear: 5,091/81,626 = 6% 3 Installed Capacity – by Fuel
2009 Energy Actually Produced - by Fuel Example – Nuclear: Nuclear energy produced in 2009 = 41,559,723 MWH Total energy produced in 2009 = 305,432,222 MWH 41,559,723/305,432,222 = 13.6% 4
Reserve Margins for Years 2000 through 2015 60% 60% 50% E i ti Existing plants and plants under l t d l t d Pl Planned generation under d ti d construction Full Interconnection Studies 40% 30% 12.5% Target 20% 10% 10% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 5
The ERCOT Transmission Grid There are 40,327 Miles of Transmission Lines in Texas… There are 40 327 Miles of Transmission Lines in Texas 8,917 Miles of 345kV Lines 19,748 Miles of 138kV Lines , 6,593 circuit miles of transmission built since 1999 5,729 circuit miles of transmission under study $4.4 b investment in $4 4 b i t t i transmission placed in service since 1999 $8 2 b $8.2 b under development d d l t (including CREZ transmission) 6
Challenge of Follow ing Wind Variability 70,000 5000 4500 65,000 4000 60,000 3500 55,000 W Wind MW 3000 3000 50,000 Load MW 2500 45,000 2000 40,000 1500 35,000 1000 30,000 500 25,000 0 8/9/10 8/9/10 8/10/10 8/10/10 8/11/10 8/11/10 8/12/10 8/12/10 8/13/10 8/13/10 8/14/10 8/14/10 8/15/10 8/15/10 8/16/10 8/16/10 Integrated Load Actual Integrated Wind Output 7
8 Transition to Nodal Market
Benefits of a Nodal market • Precise market-based pricing of generation • More granular price signals More granular price signals • Encourage resource competition – Nodal prices send proper price signals to encourage additional generation Nodal prices send proper price signals to encourage additional generation and/or transmission investment in proper locations . • More accurate management of congestion More accurate management of congestion – More accurate unit information. Market model and operations model are more consistent than current structure. 9
Vehicles and Energy Efficiency Smart Grid, Plug-in Electric Smart Grid Plug in Electric 10
Smart Grid from the ISO perspective • Smart Grid generally represents: – An array of modern, primarily digital upgrades to the electric system An array of modern primarily digital upgrades to the electric system – Goals: • Saving energy – “shaving the peak” • Reducing cost Reducing cost • Improving reliability, efficiency and transparency. • Smart Grid upgrades may be driven by policy initiatives or Smart Grid upgrades may be driven by policy initiatives or implemented by utilities, market participants and ISOs as part of their natural course of business 11
Generation Output by Fuel – Summer Peak Day July 13, 2009 Wind Other Hydro Gas Coal Nuclear 80,000 70,000 MCPE = $74.16 60,000 MCPE = $30.04 50,000 50,000 40,000 MCPE = $16.90 30,000 20,000 10,000 0 0 0:15 1:15 2:15 3:15 4:15 5:15 6:15 7:15 8:15 9:15 10:15 11:15 12:15 13:15 14:15 15:15 16:15 17:15 18:15 19:15 20:15 21:15 22:15 23:15 12
Load Participation in ERCOT Resource Type Resource Type Service Service Requirements Requirements Metering Curtailment or reduction Curtailment technology Voluntary Load in response to Market Retail contract with price response Response (VLR) Price or other factors incentives Today Today Interval metering Telemetry Load Acting as a Responsive Reserves Curtailment technology Resource (LaaR) ERCOT Qualification Interval metering Interval metering Emergency Emergency Curtailment in response Curtailment in response Curtailment technology Interruptible Load to ERCOT Verbal ERCOT Qualification Dispatch (10 minutes) Service (EILS) All of the above PLUS additional opportunities for: Interval metering Nodal Telemetry Controllable Load Regulation Service Ability to receive AGC-type signals Market Resources (CLRs) Responsive Reserves Governor-type response ERCOT Qualification All of the above PLUS : Future? To be determined Real-Time Energy Load Participation in Loads would submit DR energy offer Security-Constrained Market and all Ancillary curves to compete with generation in curves to compete with generation in Economic Dispatch E i Di t h S Services i the energy market 13
Future Potential Envisioned with Advanced Meters Future Potential Envisioned with Advanced Meters 14 Advanced Metering
Plug-in Electric Vehicles • ERCOT and the other ISOs are actively preparing for a migration of a significant segment of the transportation sector from liquid fuels to electric power transportation sector from liquid fuels to electric power • Many opportunities but also challenges • Goals of study – Work with policymakers and market participants to encourage smart Work with policymakers and market participants to encourage “smart charging” incentives for PEV owners • Dynamic pricing to encourage smart charging • Emergency demand response g y p • Enhanced aggregation – working with PEV aggregators to ensure efficient scheduling of charging load during off-peak hours – Evaluate possibility of PEV participation in ISO-RTO markets (ancillary services, etc.) i t ) – Project early adoption rates by region -- which areas of the country will be most likely impacted by early adopters? 15
Energy Efficiency • Huge investments in energy efficiency are underway across the country underway across the country • ERCOT Planning dept. is integrating new tools into long-term load forecasting to account for this influx of EE l d f ti t t f thi i fl f EE – Confidence of financial community in ERCOT forecasts is crucial for ensuring long-term resource adequacy 16
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