Item 5.1: Summer 2017 Operational and

Market Review

Dan Woodfin

Senior Director, System Operations

Dave Maggio

Manager, Market Analysis & Validation

Board of Directors Meeting

ERCOT Public

October 17, 2017

Item 5.1

ERCOT Public

Summer 2017 Highlights

• System demand peaked in July this year.

– 69,496 MW on July 28 (less than the 2016 peak of 71,110 MW)

– The Aug. peak of 67,873 MW occurred on Aug. 16.

• Pricing

– Relatively low average wholesale electricity prices

• June: $28.71, July: $30.83, and Aug.: $28.50

– Relatively low Fuel Index Price

• June: $3.05/MMBtu, July: $2.97/MMBtu, and Aug.:

$2.86/MMBtu

– Continuation of Intermittent Renewable Resource (IRR) output

during peak demand hours

• Decrease in Reliability Unit Commitment (RUC) activity relative

to 2016

2

Item 5.1

ERCOT Public

Temperature Deviations from Normal

3

Item 5.1

ERCOT Public

ERCOT Demand

4

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

55000

60000

65000

70000

75000

6/1

6/2

6/4

6/5

6/7

6/8

6/1

06

/11

6/1

36

/14

6/1

66

/17

6/1

96

/21

6/2

26

/24

6/2

56

/27

6/2

86

/30

7/1

7/3

7/4

7/6

7/8

7/9

7/1

17

/12

7/1

47

/15

7/1

77

/18

7/2

07

/21

7/2

37

/24

7/2

67

/28

7/2

97

/31

8/1

8/3

8/4

8/6

8/7

8/9

8/1

08

/12

8/1

48

/15

8/1

78

/18

8/2

08

/21

8/2

38

/24

8/2

68

/27

8/2

98

/30

Hourly Average Load

2016 2017

2017 2016

Item 5.1

ERCOT Public

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

7/1 7/6 7/11 7/16 7/21 7/26 7/31 8/5 8/10 8/15 8/20 8/25 8/30

MW

Date

2016 Outaged MW 2017 Outaged MW

2017 vs. 2016 Resource Outaged MW

5

HARVEY

Item 5.1

ERCOT Public

Wind Generation

6

HOURLY AVERAGE WIND MW 2016 2017

July 7,067 5,524

August 4,581 4,445

Item 5.1

ERCOT Public

Wind Generation

7

2017 peak weekly wind

output at HE17

Item 5.1

ERCOT Public

Wind Production at Peak Load vs. Installed Capacity

8

0

500

1000

1500

2000

2500

2016 2017

Coast

-

1,000

2,000

3,000

4,000

5,000

2016 2017

Panhandle

-

500

1,000

1,500

2016 2017

North

-

1,000

2,000

3,000

2016 2017

South

-

5,000

10,000

15,000

2016 2017

West

Remaining Capacity Wind Output

Item 5.1

ERCOT Public

Solar Generation

9

DAILY AVERAGE SOLAR MW 2016 2017

July 105 312

August 106 312

Item 5.1

ERCOT Public

Solar Generation

10

2017 peak weekly

PVGR output at HE17

Item 5.1

ERCOT Public

Operating Notices

11

6/1

6/3

6/5

6/7

6/9

6/1

1

6/1

3

6/1

5

6/1

7

6/1

9

6/2

1

6/2

3

6/2

5

6/2

7

6/2

9

7/1

7/3

7/5

7/7

7/9

7/1

1

7/1

3

7/1

5

7/1

7

7/1

9

7/2

1

7/2

3

7/2

5

7/2

7

7/2

9

7/3

1

8/2

8/4

8/6

8/8

8/1

0

8/1

2

8/1

4

8/1

6

8/1

8

8/2

0

8/2

2

8/2

4

8/2

6

8/2

8

8/3

0

Advisory due to Physical Capability less than 3000 OCN for Capacity Insufficiency

**No Watches issued due to PRC less than 2500

Item 5.1

ERCOT Public

2017 vs. 2016 – HSL of Offline Resources

12

Item 5.1

ERCOT Public

Closer Look at July 28

13

0

2,000

4,000

6,000

8,000

10,000

12,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

G,

H, an

d I

-M

W

A,

B,

C, D

, E

an

d F

-M

W

Hourly Average Demand, Capacity, and Reserves

A - Outages B - Offline C - Renewable HSLD - Non-renewable HSL E - Load G - PRCH - Wind I - Solar PRC = 2300

Item 5.1

ERCOT Public

Transmission

• New series compensation in Panhandle and Valley increase

transfer capability

• No issues in Valley

• One Emergency Notice issued on Aug. 25 due to Hurricane

Harvey having an adverse impact on the ERCOT System due

to transmission line outages

14

Item 5.1

ERCOT Public

Solar Eclipse Aug. 21, 2017

15

0

10000

20000

30000

40000

50000

60000

70000

0

200

400

600

800

1000

1200

Lo

ad

MW

PV

GR

MW

8/21/2017 8/11/2017 8/16/2017 Day Ahead Forecast Estimated Load

Item 5.1

ERCOT Public

Summer 2017 Daily Average Prices

• Prices consistent across the summer months

• Higher prices on June 19 driven largely by transmission congestion

• Higher prices on Aug. 9 more directly due to lower reserve levels

16

0

10

20

30

40

50

60

70

80

90

100

6/1 6/8 6/15 6/22 6/29 7/6 7/13 7/20 7/27 8/3 8/10 8/17 8/24 8/31

Da

ily A

ve

rag

e P

ric

e (

$/M

Wh

)

Real-Time On-Line ReservePrice Adder (RTORPA)

System Lambda

Item 5.1

ERCOT Public

Summer 2017 ORDC Price Adders

17

• Reserves, including off-line reserves, were high and price adders were minimal.

0

50

100

150

200

250

300

350

400

450

500

3000 3500 4000 4500 5000 5500 6000

RT

OR

PA

$(/

MW

h)

Real-Time On-Line Reserves (MW)

Real-Time Online Reserves and Price Adders for Hours Ending 15 through 18

June - August

ORDC with Low and High Values of Off-Line Reserves

Summer 2017 Actual RTORPA in HE15-18

August 9th

Item 5.1

ERCOT Public

RUC Changes

• Market design and system changes which had impact on RUC:

– NPRR 744: Aligned mechanism for RUC pricing run and

settlement treatments, and allowed QSEs to opt out of RUC

settlement after the Adjustment Period

– ERCOT operator displays: Added new displays for load-

weighted shift factors and higher configurations of Online

Combined Cycle Resources

– Shadow price caps: Reduced the shadow price caps on

transmission constraint violations in the RUC optimization

engine from near $1 million/MWh to near $100k/MWh

18

Item 5.1

ERCOT Public

RUC-Instructed Resource-Hours

19

0

50

100

150

200

250

2016 vs. 2017 RUC Instructions

2016

2017

0

50

100

150

200

250

Jun Jul Aug

RU

C I

ns

tru

cti

on

s (

eff

ec

tive

Re

so

urc

e-h

ou

rs)

Not Opted Out

• Less RUC instructions across all 3

months

– 293 vs. 724 effective

Resource-hours

– Includes RUCs for Hurricane

Harvey

• ~43% of RUCs were opted out of

for RUC settlement in 2017

– Similar behavior in 2016

• Did have RUCs for capacity

– 39 effective Resource-hours

primarily around Aug. 4–6

– ~51% of hours were opted out

of for RUC settlement

Item 5.1

ERCOT Public

RUC for Capacity on Aug. 6, 2017

• ERCOT was projecting a

reserve capacity shortage

and issued an OCN at

3:19 a.m.

• 3 Resources were RUC-

instructed during morning

HRUC executions.

• Additional Resource

capacity and an over-

forecasting of load resulted

in more moderate real-time

conditions.

20

-4,000

-3,000

-2,000

-1,000

0

1,000

2,000

3,000

52,000

54,000

56,000

58,000

60,000

62,000

64,000

66,000

12 13 14 15 16 17 18 19 20 21 22 23

MW

(H

AS

L-L

oa

d)

MW

(H

SL

, H

AS

L,

Lo

ad

)

Hour Ending

Forecasted Load vs. Projected Online Capacity

HRUC at 7 AM

HASL-Load HSL HASL Load

Item 5.1

ERCOT Public

Reliability Deployment Price Adder

21

The RTORDPA is an adder to the energy price to mitigate the impact of price taken energy injected by

RUC-instructed Resources.

0

100

200

300

400

500

600

700

0

5

10

15

20

25

30

35

8 9 10 12 13 14 21 22 27 28 6 7 17 20 24 25 26 29 4 5 6 15 17 18 26 27

Jun Jul Aug

RT

OR

DP

A (

$/M

Wh

)

Eff

ec

tive

Re

so

urc

e-H

ou

rsRUC Instructions and Real-Time On-Line Reliability

Deployment Price Adders (RTORDPA) by Day

Effective Resource-Hours

Average RTORDPA

Max RTORDPA

Item 5.1

ERCOT Public

Questions?

22