IEEE Power & Energy Magazine - November/December 2019 - 60

forecast of 7.4% and a nonbinding target of 13.75% (Figure 2), the lowest of any region in the continental United
States. Although this decline is not entirely due to renewable
resources, the energy price reduction, which can be due to
both lower natural gas prices and zero-variable-cost renewables shifting the supply stack, is certainly related. ERCOT
had introduced the operating reserve demand curve (ORDC)
to supplement energy revenue when the system is stressed.
The ORDC is a downward-sloping curve that sets a price
based on the amount of operating reserve available and how
that impacts the probability of being short on energy. It is
then paid to all energy providers in addition to the energy
price. Recently, the Texas Public Utility Commission
approved changes to the ORDC with the intent to incentivize investment and, thus, increase the reserve margins to
achieve goals of a long-term market equilibrium in line with
target reliability reserve margins.
Europe has developed a set of rules and guidelines to harmonize day-ahead, intraday, and balancing markets across regions
to enable cross-border trade on interconnectors in all of these
time frames. In 2018, a pan-European single intraday platform,
XBID, was put into operation, and work is ongoing to have similar European platforms for balancing products. Intraday markets
have been particularly important, with the industry reluctant
to make significant changes (e.g., feed-in tariffs and priority dispatch) before a liquid intraday market was introduced.
Wind and solar are increasingly participating in the markets,
with mandatory participation, penalties avoidance, or ancillary
services revenues as reasons. Curtailing wind production when
necessary has become an important option in the new design.
In 2007, the Irish markets were joined together as the
Single Electricity Market, a single-pool market with dayahead and intraday markets. It has
an explicit market-wide capacity
mechanism to incentivize avail66.7
ability at peak t i mes. Sig n if icant work has also been done to
reinvent an appropriate systemservices procurement framework
14,000 MW
for provision of services from any
technology. This framework has
15-min Ramp Is
facilitated a fundamental transforHigher Than
mation of the capability of existScheduled Hourly
Ramp
ing plants, including reducing
16.7
more than 400 MW in minimum
generat ion l i m it s, i ncent ives
10,000 MW
fo r demand management, and
an allowance for wind to provide
operating reserves. The revised
:45 :00 :15
:45 :00 :15
:45 :00
HE17
HE18
framework has incentivized sufficient capability to manage instanHourly Schedule
Hourly Ramp Rate
15-min Schedule
15-min Ramp Rate
taneous penetrations of up to 75%
of nonsynchronous technologies.
Augmenting this system-services
figure 1. A comparison of the CAISO 15-min versus hourly day-ahead ramp.
framework further to facilitate the
HE: hour-ending intervals.
(MW/min)

for greater ramping capabilities, intraday markets, and price
formation changes. In this section, we will expand on recent
design changes in a few regions experiencing high VRE levels.
CAISO has made numerous changes to incentivize flexibility and ensure it is being provided. The company recently
proposed enhancing its day-ahead market by moving from the
current hourly granularity to a 15-min granularity. This can
better position resources to accommodate the net load ramps
that occur in real time by using more information about when
those ramps may happen within the hour. Currently, the realtime market must dispatch resources to manage granularity differences between the hourly day-ahead and the 5-min
real-time markets. As Figure 1 illustrates, this can allow the
commitment of resources in advance to ensure that when faster
ramps occur in real time, they are met with day-ahead resource
commitments and prices in the day-ahead market are aligned
with real time when those greater ramps are expected.
SPP has developed market tools, such as separate regulation-up and -down products to incentivize all generation
types to provide specific value to the system. This presents
an opportunity for VRE to participate in regulation down
without having to curtail in advance. SPP is currently assessing a ramping product that will provide incentives for the
ramping events experienced by it and is also evaluating the
development of an uncertainty product that assists with net
load changes in longer periods than traditional ancillary services products (e.g., longer than 1 h). New products to ensure
available ramping for different horizons are available in several U.S. markets.
ERCOT serves an "energy-only" market with no capacity market. Its planning reserve margin trends have declined
from a 2017 summer forecast of 9.4% to a 2019 summer

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