Texas’s grid operator ERCOT may be outside the regulatory authority of the Federal Energy Regulatory Commission, but that doesn’t mean it isn’t interested in rethinking fast-responding regulation services and the types of assets that can provide the services.
In 2011, FERC’s Order 755 required grid operators under its jurisdiction to increase the pay for “fast” responding frequency regulation sources, such as batteries, flywheels and demand response. The resources can respond faster to grid signals than can traditional centralized generators, but can't match their extended duration. The higher payments make it more interesting for assets at the edge of the grid to bid into the markets.
Frequency regulation has always been needed on the grid to provide balancing, but in areas with high penetration of intermittent renewables, faster responses are needed. Although ERCOT doesn’t have to comply with FERC orders, it has increasing amounts of wind power on its system, which will require an increase in faster regulation services to react as wind levels peak and dip throughout the day and night.
“The idea is to rethink all of the ancillary services in ERCOT,” said Kenneth Ragsdale, principal, market design at ERCOT. The Texas grid operator has a white paper out on the topic and will review each of its six ancillary services and how they are compensated in the next few years.
A pilot that will end later this month is one of the first steps in that process. The pilot is testing Duke and Xtreme Power’s 36-megawatt battery in Notrees, but even more interesting is the fact that it is also using a dozen electric delivery trucks to provide sub-one-second regulation services.
The Southwest Research Institute, a nonprofit applied research and development organization, monitors the grid frequency rather than taking a signal directly from ERCOT. When the frequency hits a certain set point, the load from the twelve truck batteries automatically respond. SwRI would not say who owns the trucks.
“We’re just figuring out how to manage the service,” said Sean Mitchem, a principal analyst in SwRI’s Automation and Data Systems Division.
One of the appeals of EV batteries is that they are a storage resource that doesn’t have to be bought and installed only for frequency regulation, said Mitchem. But the grid operator doesn’t want to manage lots of 60-kilowatt-hour batteries.
“The 36-megawatt [device] is fairly easy to represent as both a generator and a load, but when it came to EVs, we’re not really interested in each of the twelve vehicles,” said Ragsdale. “We need it represented as a resource.”
SwRI built a power meter that could monitor frequency and the power from the EV chargers every 25 milliseconds. The chargers respond in just under 500 milliseconds when they receive the signal that the grid frequency hits a specific point just below 60 hertz. The sub-second response includes any time delays in the chargers themselves. Although SwRI’s system speaks to each charger, when it represents the load to the grid, it looks like a single load.
The organization’s goal is to move the technology forward, but it will not commercialize it. Mitchem did not speculate as to which companies might be most interested in commercializing the technology.
Currently, the piloted protocol needs to be approved by ERCOT’s board of directors to be a service that could continue to be provided while the grid operator rethinks its longer-term strategy for ancillary services. ERCOT is looking at a pay-for-performance model, similar to what has already been implemented in PJM due to FERC Order 755. “You’ve got to start somewhere,” Mitchem said of aggregating small, distributed resources for ancillary services. “We’ve proved the case.”
In PJM, a fleet of electric vehicles at the University of Delaware was the first EV asset to provide ancillary services to the grid. The project went through two years of pilots, which included a change to how PJM sends its regulation signal to resources depending on how fast they can respond.
Although most of the assets bidding into PJM for frequency regulation aren’t EV batteries, the amount of resources that have bid into PJM in the past year have tripled because of the higher prices that resulted from FERC Order 755.
In Texas, there are many changes potentially coming to the energy-only market. The operating reserve demand curve has been tweaked so that scarcity prices are higher more often, even if they don’t get all the way up to the market cap. Some experts, such as William Hogan, research director of the Harvard Electricity Policy Group, think this should help incentivize demand response in the market. There is also an ongoing heated debate about whether to move to a capacity market, and if so, what it should look like.
Overhauling the ancillary services market in Texas is less of a hot-button issue, but an important one as more wind is brought on-line. “One of the main benefits [of the pilot],” said Ragsdale, “is it made everyone talk about ancillary services. It’s raised the discussion back up, and now it’s making everyone think.”