STEC Seeks To Separate Primary Frequency Response From Responsive Reserve Service In ERCOT
South Texas Electric Coop., Inc. (STEC) has filed with ERCOT a Nodal Protocol Revision Request (NPRR 863) to separate the Primary Frequency Response function from Responsive Reserve (RRS), thereby establishing two discrete Ancillary Services: Primary Frequency Response Service (PFRS) and RRS.
STEC said in its proposal that, "RRS has been a staple of the current suite of Ancillary Services since the beginning of the Zonal Market. This Ancillary Service has always consisted of two components, a Primary Frequency Response component and a 10-minute energy deployment component, and is a reflection of the technology available at the beginning of the market to provide the service - thermal Generation Resources. As technology has advanced, changes have been made to RRS to allow new participants to enter the market (e.g. Load Resources), however, the product has always remained a multi-component Ancillary Service which has proven to not be conducive to the entry of new participants, nor is it conducive to the efficient procurement and deployment of Ancillary Services on the ERCOT System. Several NPRRs with reasonable merit have failed to survive the stakeholder process as a direct result of the inflexibility of the current RRS product."
STEC said in its proposal that, "Under the current version of North American Electric Reliability Corporation (NERC) Reliability Standard BAL-001-1-TRE, Primary Frequency Response in the ERCOT Region, all On-Line Generation Resources are required to have their Governors in service and provide Primary Frequency Response unless exempted by the Balancing Authority (ERCOT). As a result, all Generation Resources on the system are providing an uncompensated service to the ERCOT System and are subject to compliance risk regardless of whether the Resource has a RRS Ancillary Service Resource Responsibility at the time. Additionally, this free service results in increased wear and tear and Operations and Maintenance (O&M) costs that are borne by the generator owner. As is the case with most things that are provided for free, Primary Frequency Response has become used most frequently and often masks the requirements needed to operate the ERCOT grid since its usage front runs the usage of other Ancillary Services which ultimately impacts price formation. This NPRR would allow for compensation to those Resources that hold a Primary Frequency Response Service (PFRS) Ancillary Service Resource Responsibility. At the same time, it creates a blanket exemption by ERCOT to those Generation Resources that do not have a PFRS Ancillary Service Resource Responsibility, thereby mitigating undue compliance risk borne by Generation Resources located in ERCOT. This new exemption policy is consistent with ERCOT’s current modeling practices for gauging frequency response characteristics of the ERCOT System where ERCOT “turns off” the Governors for all Generation Resources that do not have a RRS Ancillary Service Resource Responsibility."
STEC said in its proposal that, "By separating Primary Frequency Response from RRS and creating two distinct Ancillary Service products, barriers to entry are removed, market efficiencies are realized, unnecessary regulatory compliance risk is removed, Resources are appropriately compensated for the service(s) that they provide, and the system’s frequency response characteristics will more closely align with the modeling currently done by ERCOT."