Lead from the front Texas Nodal 1 Texas Nodal CRR Optimization Trade-Offs Presentation to address...
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http://nodal.ercot.com 1 Lead from the front Texas Nodal Texas Nodal CRR Optimization Trade-Offs Presentation to address trade-offs between different strategies to limit the Annual CRR auction scope based on recommendations from the CRR Vendor, Nexant (presented to TPTF in November 2006). Compiled by CRR Project Team February 6, 2007
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Transcript of Lead from the front Texas Nodal 1 Texas Nodal CRR Optimization Trade-Offs Presentation to address...
http://nodal.ercot.com 1Lead from the front
Texas Nodal
Texas Nodal
CRR Optimization Trade-OffsPresentation to address trade-offs between different strategies to limit the Annual CRR
auction scope based on recommendations from the CRR Vendor, Nexant (presented to
TPTF in November 2006).
Compiled by CRR Project Team
February 6, 2007
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Today’s Objectives
• Follow-up on optimization runtime resolution alternatives as discussed late last year.– Protocol defined annual auction is estimated to take 1300 hours to
solve.– Requirement SR-1 specifies that the annual auction optimization
complete within 80 hours.• Gain group understanding of the options and trade-offs available.• Receive input from TPTF.
NOTE: Not asking for a formal recommendation or vote.
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Optimization Runtime Description & Background
• NPRR 005 clarified that the annual CRR auction should simultaneously optimize three Times-Of-Use (TOU) blocks across 24 months.
– Combination is referred to as 72 periods (24 months x 3 TOU).
– NPRR 005 became part of the August 2006 Nodal protocols.
• CRR Team is not aware of another software solution that can optimize 72 periods simultaneously within the 80 hour timeframe.
– PJM’s largest solution (using Nexant competitor software) solves 12 periods simultaneously and was thought to be pushing the envelope.
– Note that comparison is not one-to-one due to differences in other elements, such as number of buses, branches, contingencies, etc.
Time-of-UseWD = Week DayWE = Week EndOP = Off-PeakOn = On-Peak
WEWD
OP
WEWD
OP
WEWD
OP
WEWD
OP
WEWD
OP
WEWD
OP
WEWD
OP
WEWD
OP
WEWD
OP
WEWD
OP
WEWD
OP
WEWD
OP
WEWD
OP
WEWD
OP
WEWD
OP
WEWD
OP
WEWD
OP
WEWD
OP
WEWD
OP
WEWD
OP
WEWD
OP
WEWD
OP
WEWD
OP
WEWD
OP
72 Periods Optimized Simultaneously = 1300 Hours
Year One Year Two
P
OP
Year One
P
OP
P
OP
12 Periods Optimized Simultaneously
OP
P
OP
P
OP
P
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Optimization Run-Time Approaches
A. Eliminating a Time-Of-Use block – each TOU acts as another period
B. Increasing Duration of Calendar Periods, such as seasonal models instead of monthly models
C. Decoupling Optimizations – separating groups of periods (e.g. year one and year two)
NOTE: These approaches can be applied individually or in combination.
48 Periods Optimized Simultaneously
Year One Year Two
On
OP OP OPOP OP OPOP OP OPOP OP OPOP OP OPOP OP OPOP
On
OP
On
OP
On
OP
On
OP
On
OP
On On OnOn On On OnOn OnOn OnOn OnOn OnOn OnOn
Year One Year Two
On
OP OP OPOP OP OPOP OP OPOP OP OPOP OP OPOP OP OPOP
On
OP
On
OP
On
OP
On
OP
On
OP
24 Periods Optimized Simultaneously for Each Year
On On On On On On On On On On On On On On On On On On
Year One Year Two
24 Periods Optimized Simultaneously = 147 Hours
OP
PWD OP
WE
OP
PWD OP
WE
OP
PWD OP
WE
OP
PWD OP
WE
OP
PWD OP
WE
OP
PWD OP
WE
OP
PWD OP
WE
OP
PWD OP
WE
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Approach Dimensions
Approach Legend:
A = Eliminate Time-Of-Use (TOU)
B = Increase Duration of Calendar Periods
C = Decouple Optimizations
Calendar Period
TOU Blocks Period Approach
Protocols 24 Months 3 –
WD/WE/OP 72
Not Applicable
Eliminate WE TOU
24 Months 2 – On/OP 48 A
Use Seasonal
8 Seasons 2 – On/OP 16 A + B
12 Months 2 – On/OP 24 Decouple Years / Monthly 12 Months 2 – On/OP 24
A + C
24 Months 1 – WD 24
24 Months 1 – WE 24 Decouple TOU
24 Months 1 – OP 24
C
12 – Year 1 1 – WD 12
12 – Year 2 1 – WD 12
12 – Year 1 1 – WE 12
12 – Year 2 1 – WE 12
12 – Year 1 1 – OP 12
Decouple TOU and Decouple Years / Monthly
12 – Year 2 1 – OP 12
C
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Eliminate Weekend Time-Of-Use
• Eliminating a TOU only does not reduce optimization runtime sufficiently.
• Including a third TOU block increases the number of periods by 50% and optimization runtime exponentially.
• 24-Hour product could still be made available.• All other markets only offer two TOU blocks.
• Is differentiation in Weekend (WE) congestion costs enough to warrant a separate CRR product?
48 Periods Optimized Simultaneously
Year One Year Two
On
OP OP OPOP OP OPOP OP OPOP OP OPOP OP OPOP OP OPOP
On
OP
On
OP
On
OP
On
OP
On
OP
On On OnOn On On OnOn OnOn OnOn OnOn OnOn OnOn
Calendar Period
TOU Blocks Period Approach
Eliminate WE TOU
24 Months 2 – On/OP 48 A
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Changing from Monthly to Seasonal
• Current planning model development activities transition easier as each season represented by one Network Model.
• As seasons will not likely align with calendar quarters, annual auction timing would require modifications.– Example: A season could be December 1st through February 28th.
• Will it be problematic for CRRs to be for terms that bridge calendar years?
Calendar Period
TOU Blocks Period Approach
Use Seasonal
8 Seasons 2 – On/OP 16 A + B
Year TwoOP OP OPOP
Year OneOP OP OPOP
On
16 Periods Optimized Simultaneously
On On On On On On On
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Decoupling Years - Monthly
• Results from Year 1 have no bearing on the results from Year 2.• Significant difference in how much network capacity is made
available in Year 1 versus Year 2.• No previously awarded CRRs in the next annual auction • Separate auctions for each year will not allow the award of a 24
month strip.
• What is more valuable -- Long term products (24 month CRRs) or access to CRRs in second year?
Calendar Period
TOU Blocks Period Approach
12 Months 2 – On/OP 24 Decouple Years / Monthly 12 Months 2 – On/OP 24
A + C
Year One Year Two
On
OP OP OPOP OP OPOP OP OPOP OP OPOP OP OPOP OP OPOP
On
OP
On
OP
On
OP
On
OP
On
OP
24 Periods Optimized Simultaneously for Each Year
On On On On On On On On On On On On On On On On On On
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Texas Nodal
Decouple Time-Of-Use
• Results from the auction of one TOU will have no bearing on the results from the auction of other TOUs.
• 24-Hour product will not be available.
WEWD
OP
Calendar Period
TOU Blocks Period Approach
24 Months 1 – WD 24
24 Months 1 – WE 24 Decouple TOU
24 Months 1 – OP 24
C
WD
WE
OP
24 Periods Optimized Simultaneously
Year One Year TwoWDWD WD WD WDWD WDWD WDWD WD WD WDWD WD WD WDWDWD WDWD WD WD
WE WE WE WE WE WE WE WE WE WE WE WE WE WE WE WE WE WE WE WE WE WE WE
24 Periods Optimized Simultaneously
Year One Year Two
OP OP OP OP OP OP OP OP OP OP OP OP OP OP OP OP OP OP OP OP OP OP OP
24 Periods Optimized Simultaneously
Year One Year Two
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Decouple Time-Of-Use and Decouple Years - Monthly
• The example described above is extreme.• 24-Hour product will not be available.• 24-Month product will not be available.• Six separate auctions will each solve well under the 80-Hour
requirement.
Calendar Period
TOU Blocks Period Approach
12 – Year 1 1 – WD 12
12 – Year 2 1 – WD 12
12 – Year 1 1 – WE 12
12 – Year 2 1 – WE 12
12 – Year 1 1 – OP 12
Decouple TOU and Decouple Years / Monthly
12 – Year 2 1 – OP 12
C++
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Other Considerations
• Multiple combinations of approaches are available.• Year 1 does not require the same dimensions as Year 2.• Any changes to annual auction dimensions will be reflected in
allocations.
In order to meet the 80-hour Requirement, the annual auction needs to be reduced from 72 periods to something in the range of 12-20 periods.
