DREAM November Meeting

Agenda Introduction and Expectations Path to becoming a Resource Node – ERCOT Registration process for non-modeled resources – ERCOT Distribution Switching 101 Reliability Discussion – DERs (December) Modeling DERs at the Transmission Bus FIS / Screening Study Exemption for DERs Definition Update Resource Optionality and Switching between LZ and Nodal Prices

Expectations Understand and differentiate registration processes for resource nodes and un- registered resources Identify bottlenecks for establishing a resource node for a DER Understand complications associated with DER registration and distribution switching Document task force positions on LZ/Nodal switching

Distribution Switching 101

Feeder A Feeder BFeeder C Main 1Main 2 Feeder D Feeder FFeeder G TBKR1TBKR1 Transmission Line 1 Transmission Line 2 Transformer 1 138/13.8kV Transformer 2 138/13.8kV Fault duty rated disconnect switch TBKR2TBKR2

Substation Fence Residential Service Commercial, Light Industrial, Residential Service DERville Substation Field switching between feeders

Field switching between substations ODER YODER

Modeling DERs at the transmission bus DER Establishing a Logical Resource Node for a DER enables participation in SCED dispatch, ancillary service markets, and CRR markets. The resource’s electrical identity on the grid can be represented by an equivalent circuit, and shift factor relative to the transmission bus A DER with many parallel paths back to a substation still has a shift factor of 1, relative to the T/D transformer, assuming it is truly “radial” to that transformer Downtown networks with tied secondary lines are notable exceptions

Mapping a DER to the Transmission Load DERs can be modeled at the transmission bus Shift factors relative to constraints can accurately represent the resource at the transmission bus Switching between substations may physically move the resource connection relative to it’s DER mapping CIM nodes must be logically adjusted to account for DER output and apparent load. Sub 1Sub 2 DER 1 CIM Load Distribution switching is not currently modeled by ERCOT

Potential Solution for Distribution Switching impact on resource location The ability to switch load (and distribution connected resources) is typically limited by physical and electrical distance in between transmission substations. Sub 1 30 Mi 40 Mi 20 Mi 25 Mi Load / DER Voltage and Thermal Constraints Limit D Switching Resource switching may be limited to immediately neighboring circuits / stations

Potential Solution for Distribution Switching impact on resource location If the resource can only switch between two substations that have a shift factor +/- 2% (shift factor cut-off), then the resource may be modeled at either substation without material impact. Station outages may require that a DER QSE notify ERCOT of the change for accurate representation. Sub 1 30 Mi 40 Mi 20 Mi 25 Mi Load / DER Voltage and Thermal Constraints Limit D Switching Resource switching may be limited to immediately neighboring circuits / stations

Potential Exemptions for FIS Studes Do TDSP interconnection studies obviate the need for further ERCOT study? Does the 10MW Exemption allow a bypass of ERCOT/ FIS studies? If the DER Nameplate rating < Station Transformer minimum load, then the DER may not inject to the grid

Behind the meter, LZ Pricing Battery Solar Panel Inverter Load Meter Load Zone Charging Pricing Load Zone Pricing Net apparent load invoiced by interval

Behind the meter, LZ/Nodal Pricing Battery Solar Panel Inverter Load Meter Nodal Charging Pricing Nodal / Solar Charging Pricing Load Zone Pricing Nodal Pricing Logical load invoiced by interval Sub Meter Logical Load may be defined as Meter – Sub Meter

Load Zone/Nodal Optionality Wholesale and Load Zone prices may diverge when constraints bind Resources and Loads may get inconsistent pricing at the same electrical bus This issue exists at traditional generators, where station service load pays load zone pricing and the generator is paid wholesale pricing Electrically equivalent location

Nodal and Load Zone Price Divergence If a customer site is in a load pocket within a load zone, nodal prices may be very high, while load zone prices are relatively low. If a customer site is in a generation pocket within a load zone, LZ pricing may be very high, while nodal prices are very low

Issues with Optionality The ability to switch between nodal and load zone pricing, on an interval, hourly, or daily basis enables the customer to optimize charging, discharging, and LZ/Nodal Pricing Provides an unprecedented opportunity to manage load zone / nodal risk

Examples: Day (hour, week, month)1 Optimizing LZ/NP, the resource would: – Switch batteries to full charging mode – Switch solar production to self serve (Load Zone hedge) – Potentially reduce Load NP : -$25 Note: Assumes sub-metering on the battery and solar array are independent and switchable (Potentially Post-ITC Scenario, ITC for batteries requires 70% solar charging) LZ: $30

Examples: Day (hour, week, month) 2 Optimizing LZ/NP, the resource would: – Switch batteries to full dis-charging mode – Switch solar production to nodal pricing – Potentially increase charging load to discharge to a nodal price NP : $30 Note: Assumes sub-metering on the battery and solar array are independent and switchable LZ: $18

Pros/Cons Creates increased value for the solar/storage combination behind the meter Enables unprecedented optionality for a Resource to optimize LZ/Nodal pricing Potentially sends differing/conflicting pricing signals to a single electrical location

Alternatives Establish a Resource Node for the Solar/Battery combination Charge and Sell wholesale Procure CRRs from the Resource Node to the Load Zone when LZ pricing is desired

Next Meeting Discuss potential rules for aggregations Review year-to-date findings Prepare a summary for TAC direction in January DER Reliability Discussion – Current DR Concentration – Can existing DR aggregate output currently exceed Reg Down, SCED Down on a 5, 10, 15 min basis?