ERCOT CRR Auction Discussion and Market Operations Analysis
Explore the performance issues and potential changes in ERCOT's CRR Auctions based on discussions regarding transaction behaviors, bidding patterns, and paths forward. Discover administrative guardrails, market incentives, and market redesign solutions to address increasing bid populations and risks.
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Presentation Transcript
CRR Auction Discussion Items Samantha Findley CRR Market Operations CMWG September 23, 2024
Agenda Share more analysis about submitted transactions/bidding behaviors Discussion of potential CRR changes ERCOT s path forward 2 PUBLIC
Avg Transactions submitted by CRRAH over the last 11 LTAS auctions 3 PUBLIC
Avg Transactions submitted by Counter-Party over the last 11 LTAS auctions 4 PUBLIC
ERCOTs 3 types of paths forward Problem statement: ERCOT CRR Auctions have increasing performance issues and risks due to increasing population of bids. Resolution path #1- Administrative guardrails (priority to reduce risk of a TAP and risk of long-running solution times) Resolution path #2- Market Incentives to scale back participation to within administrative guardrails Resolution path #3- Market redesign to increase performance 5 PUBLIC
Resolution path #1- Administrative guardrails (priority to reduce risk of TAP and long-running solution times) 1. Administrative TOU limits- Mitigation has already been introduced (new per- TOU limit for current SEQ6) 2. Administrative lowering of bids per CRRAH- reducing per-CRRAH limit by xx % will reduce risk of Transaction Adjustment Period Update TAC-approved CRR transaction limits, both at total auction level and for per-CRRAH limits In parallel, ERCOT will explore appropriate limits for each LTAS auction in a TAC approved document like CRR Activity Calendar Examples: SEQ 1 450kOverall/150kTOU/4000CRRAH and SEQ6 300k/100kTOU/2500CRRAH 6 PUBLIC
Resolution path #2- Market Incentives to scale back participation to within administrative guardrails 1. Minimum Option Bid Price - Increasing existing min bid price from $0.01 to TAC approved value (example, $0.25) would create downward pressure on volume of CRR Option bids ERCOT-sponsored NPRR 2. Unawarded Bid fee for Options - Introduce bid fee for unawarded Options to create downward pressure on bid levels- NPRR and system change 7 PUBLIC
Resolution path #3- Market redesign to increase performance 1. Discontinue multi-month bids in LTAS - ERCOT to begin a study to convert multi-month bids into single-month bids and assess expected gain in performance (although would create more bids, reduces strain on optimization solving over multiple models/months). 2. Different levels of Network Model Percentages - smaller scale network models <30% have performance issues (SEQ4 SEQ6 auctions). May reconsider current scaling percentages in protocols. 3. Other ideas? 8 PUBLIC
Next steps ERCOT will be working to file an NPRR that conceptually provides for the following discussed items: Administrative TOU limits Administrative lowering of bids per CRRAH Minimum Option Bid Price ERCOT to begin study for removal of multi-month bids 9 PUBLIC
