Generic Settlement Examples

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Generic Settlement Examples

• September 30, 2003
• Pamela Kozlowski
• Barker, Dunn Rossi, Inc.

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Two Sets of Settlement Examples

• Three bus settlement examples
• Bilateral Contracts
• Six bus settlement examples
• Bilateral Contracts
• Congestion Revenue Rights (CRRs)
• Introduces Zones and Hubs

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Three Bus Settlement Examples
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Three bus power system description

• 3 Busses 1 through 3
• 2 Loads
• 3 Generators
• 3 Transmission Lines
• 75 MW thermal limit on line from Bus 1 to Bus 3
• Ignore losses (emphasizes congestion impacts on
  LMPs)

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Three bus power system generation offers

• Generator 1 10/MWh
• Generator 2 12/MWh
• Generator 3 20/MWh

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Three Bus Settlement Examples

• Examples developed to illustrate
• who pays congestion costs and
• impact of bilateral contracts on such congestion
  costs
• Examples build upon one another
• Examples assume DA security constrained dispatch
  with no deviations in real-time

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Three Bus Settlement Examples Description

• No congestion
• Case without bilateral contracts
• Case with bilateral contracts
• Case A
• Congestion with bilateral contracts delivered to
  load
• Case B
• Congestion with bilateral contracts FOB

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Three bus power system overview no congestion
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No Congestion Case ERCOT Settlement
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No Congestion Case with Bilateral Contracts

• G1 has a contract to provide 25 MW of delivered
  power to L3 _at_ 15/MWh
• G2 has a contract to to provide 25 MW of
  delivered power to L3 _at_ 15/MWh
• Bilateral schedules are submitted
• G1 to L3 of 25 MW
• G2 to L3 of 25 MW

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No Congestion Case with Bilateral Contracts
ERCOT Settlement
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Congestion Case A with Bilateral Contracts
(delivered to load)

• Increase load at Bus 3 from 50 MW to 100 MW
• Same bilateral contracts as in the case with no
  congestion
• G1 has a contract to provide 25 MW of delivered
  power to L3 _at_ 15/MWh
• G2 has a contract to to provide 25 MW of
  delivered power to L3 _at_ 15/MWh
• Bilateral schedules are submitted to ERCOT
• G1 to L3 of 25 MW
• G2 to L3 of 25 MW

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Congestion Case A Unconstrained Flows
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Congestion Case A Security Constrained Flows
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Congestion Case A Why is Bus 3 price 14/MWh

• The LMP at bus 3 equals the marginal cost to
  supply 1 more MW of energy to that bus
• Increase load at Bus 3 from 100 MW to 101 MW (see
  next slide)
• To supply 1 more MW of energy to Bus 3 increases
  the total cost from 1,550 to 1,564 1,564 -
  1,550 14
• To supply 1 more MW of energy to Bus 3 the
  generator dispatch changes as follows
• Generator 1 backs down by 1 MW (from 125 to 124
  MWs) at 10/MWh and
• Generator 2 increases by 2 MW (from 25 to 27 MWs)
  at 12/MWh
• (-1MW)(10/MWh) (2MW)(12/MWh) 14/MWh
• The marginal cost to supply 1 more MW of energy
  to Bus 3 is 14/MWh

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One-line showing determination of Marginal Price
at Bus 3
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Congestion Case A with Bilateral Contracts
(delivered to load) ERCOT Settlement
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Case A DA Net Settlement by Entity including
Bilateral Contracts (Settle at Load, Bus 3)
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Congestion Case B with Bilateral Contracts (FOB)

• Same as Congestion Case A, except the bilateral
  contracts are FOB
• G1 has a contract to provide 25 MW of FOB power
  to L3 _at_ 12.00/MWh
• G2 has a contract to to provide 25 MW of FOB
  power to L3 _at_ 12.00/MWh
• Bilateral schedules are submitted to ERCOT
• G1 to L3 of 25 MW
• G2 to L3 of 25 MW

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Congestion Case B with Bilateral Contracts (FOB)
ERCOT Settlement
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Case B DA Net Settlement by Entity including
Bilateral Contracts (Settle FOB)
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Three Bus Examples - Summary
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Six Bus Settlement Examples
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Six bus power system - overview
Load Zone X
Hub
Load Zone Y
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Six bus power system description

• 6 Busses A through F
• 4 Loads LB, LD, LE and LF
• 2 Load Zones
• LB and LD are in Zone X
• LE and LF are in Zone Y
• Load zone price equals load weighted average of
  prices at load nodes within the zone
• 5 Generators G1 through G5
• 8 Transmission Lines
• 250 MW thermal limit on line A-B
• 1 Hub
• Defined by Busses C and E
• Hub price equals arithmetic average of prices at
  nodes that make up the hub
• Ignore losses (emphasizes congestion impacts on
  LMPs)

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Some basic model characteristics

• Generators
• Each has five increasing incremental prices (see
  following table)
• The following diagrams only show the price of the
  last block cleared/dispatched
• Each Generator is capable of being dispatched in
  economic order over its entire range
• Loads
• Each Load is firm (non-price responsive)
• Total Load LB at Bus B will be increased later to
  force congestion
• Transmission
• Line from Bus A to Bus B near limit

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Generator data
Piecewise Linear Curve Model
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6 Bus Settlement Examples

• Examples developed to illustrate
• who pays congestion costs and
• impact of bilateral contracts and CRRs on such
  congestion costs
• Examples build upon one another
• Examples assume DA security constrained dispatch
  with no deviations in real-time

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Six Bus Settlement Examples - Description
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Example 1 Day-Ahead Solution Flows
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Example 1 LMPs for Load Zones and Hub
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Example 1 ERCOT DA settlement
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Example 1a Bilateral Contracts

• Load LB has the following bilateral contracts for
  which only MW amounts are reported to ERCOT
• to buy 220 MW of supply _at_ 15/MWh from G1 at
  ZoneX
• to buy 180 MW of supply _at_ 30/MWh from G5 at Bus F

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Example 1a DA Net Settlement by Entity,
including Bilateral Contracts
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Example 1a Observations

• DA LMPs at all locations the same, 23/MWh
• Effective DA price for
• Generator 1 7,440/400MWh 18.60/MWh
• Generator 5, paid 1,260 for no production
• Load B 8,700/400MWh 21.75/MWh
• No congestion
• No CRR settlement

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Example 2

• In Example 2, the Load at Bus B is increased from
  400 MW to 600 MW

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Example 2 DA Solution Unconstrained Flows
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Example 2 DA Solution Security Constrained
Flows
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Example 2 LMPs for Load Zones and Hub
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Example 2 ERCOT DA settlement
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Example 2a Bilateral Contracts (Settle at Zone)

• Bilateral Contracts are the same as in Example 1
• Load LB has the following bilateral contracts for
  which only MW amounts are reported to ERCOT
• to buy 220 MW of supply _at_ 15/MWh from G1 at
  ZoneX
• to buy 180 MW of supply _at_ 30/MWh from G5 at Bus F

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Example 2a DA Net Settlement by Entity,
including Bilateral Contracts (Settle at Zone)
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Example 2b Bilateral Contracts (Settle at
Generator)

• Bilateral contracts are the same as in Example
  2a, except Load LBs bilateral contract with G1
  settles at Bus A instead of at ZoneX
• Load LB has the following bilateral contracts for
  which only MW amounts are reported to ERCOT
• to buy 220 MW of supply _at_ 15/MWh from G1 at Bus
  A
• to buy 180 MW of supply _at_ 30/MWh from G5 at Bus F

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Example 2b DA Net Settlement by Entity,
including Bilateral Contracts (Settle at
Generator)
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Example 2c Bilateral Contracts (Settle at
Generator) and Load has CRRs

• Bilateral contracts are the same as in Example 2b
• Load LB has the following bilateral contracts for
  which only MW amounts are reported to ERCOT
• to buy 220 MW of supply _at_ 15/MWh from G1 at Bus
  A
• to buy 180 MW of supply _at_ 30/MWh from G5 at Bus
  F
• Load LB acquires 240 MW CRR from Bus A to Zone X

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Example 2c DA Net Settlement by Entity,
including Bilateral Contracts (Settle at
Generator) CRRs
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Example 2d Bilateral Contracts (Settle at Hub)

• Bilateral contracts are the same as in Example
  2a, 2b 2c, except Load LBs bilateral contract
  with G1 settles at the Hub
• Load LB has the following bilateral contracts for
  which only MW amounts are reported to ERCOT
• to buy 220 MW of supply _at_ 15/MWh from G1 at Hub
• to buy 180 MW of supply _at_ 30/MWh from G5 at Bus
  F

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Example 2d DA Net Settlement by Entity,
including Bilateral Contracts (Settle at Hub)
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Example 2e Bilateral Contracts (Settle at Hub)
and Load and Generator have CRRs

• Bilateral contracts are the same as in Example 2d
• Load LB has the following bilateral contracts for
  which only MW amounts are reported to ERCOT
• to buy 220 MW of supply _at_ 15/MWh from G1 at Hub
• to buy 180 MW of supply _at_ 30/MWh from G5 at Bus
  F
• G1 acquires 220 MW CRR from Bus A to Hub
• Load LB acquires 240 MW CRR from Hub to Zone X

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Example 2e DA Net Settlement by Entity,
including Bilateral Contracts (Settle at Hub)
CRRs
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Six Bus Examples 1 and 2 Observations