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Market protocols in ERCOT and their effect on wind generation

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  • Sioshansi, Ramteen
  • Hurlbut, David

Abstract

Integrating wind generation into power systems and wholesale electricity markets presents unique challenges due to the characteristics of wind power, including its limited dispatchability, variability in generation, difficulty in forecasting resource availability, and the geographic location of wind resources. Texas has had to deal with many of these issues beginning in 2002 when it restructured its electricity industry and introduced aggressive renewable portfolio standards that helped spur major investments in wind generation. In this paper we discuss the issues that have arisen in designing market protocols that take account of these special characteristics of wind generation and survey the regulatory and market rules that have been developed in Texas. We discuss the perverse incentives some of the rules gave wind generators to overschedule generation in order to receive balancing energy payments, and steps that have been taken to mitigate those incentive effects. Finally, we discuss more recent steps taken by the market operator and regulators to ensure transmission capacity is available for new wind generators that are expected to come online in the future.

Suggested Citation

  • Sioshansi, Ramteen & Hurlbut, David, 2010. "Market protocols in ERCOT and their effect on wind generation," Energy Policy, Elsevier, vol. 38(7), pages 3192-3197, July.
    • Handle: RePEc:eee:enepol:v:38:y:2010:i:7:p:3192-3197
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    References listed on IDEAS

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    1. Voorspools, Kris R. & D'haeseleer, William D., 2007. "Critical evaluation of methods for wind-power appraisal," Renewable and Sustainable Energy Reviews, Elsevier, vol. 11(1), pages 78-97, January.
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    1. Ricardo J. Bessa & Corinna Möhrlen & Vanessa Fundel & Malte Siefert & Jethro Browell & Sebastian Haglund El Gaidi & Bri-Mathias Hodge & Umit Cali & George Kariniotakis, 2017. "Towards Improved Understanding of the Applicability of Uncertainty Forecasts in the Electric Power Industry," Energies, MDPI, vol. 10(9), pages 1-48, September.
    2. Fischlein, Miriam & Wilson, Elizabeth J. & Peterson, Tarla R. & Stephens, Jennie C., 2013. "States of transmission: Moving towards large-scale wind power," Energy Policy, Elsevier, vol. 56(C), pages 101-113.
    3. Woo, C.K. & Zarnikau, J. & Moore, J. & Horowitz, I., 2011. "Wind generation and zonal-market price divergence: Evidence from Texas," Energy Policy, Elsevier, vol. 39(7), pages 3928-3938, July.
    4. Woo, C.K. & Horowitz, I. & Moore, J. & Pacheco, A., 2011. "The impact of wind generation on the electricity spot-market price level and variance: The Texas experience," Energy Policy, Elsevier, vol. 39(7), pages 3939-3944, July.
    5. Ricardo Bessa & Carlos Moreira & Bernardo Silva & Manuel Matos, 2014. "Handling renewable energy variability and uncertainty in power systems operation," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 3(2), pages 156-178, March.
    6. Moradi-Dalvand, M. & Mohammadi-Ivatloo, B. & Amjady, N. & Zareipour, H. & Mazhab-Jafari, A., 2015. "Self-scheduling of a wind producer based on Information Gap Decision Theory," Energy, Elsevier, vol. 81(C), pages 588-600.
    7. Alagappan, L. & Orans, R. & Woo, C.K., 2011. "What drives renewable energy development?," Energy Policy, Elsevier, vol. 39(9), pages 5099-5104, September.
    8. Daniel F. Salas & Warren B. Powell, 2018. "Benchmarking a Scalable Approximate Dynamic Programming Algorithm for Stochastic Control of Grid-Level Energy Storage," INFORMS Journal on Computing, INFORMS, vol. 30(1), pages 106-123, February.

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