“Managing the Integration of Energy Storage Technologies” Kenneth Ragsdale ERCOT

2 Presentation Outline December 2, 2011ERCOT Energy Storage Workshop Current Protocol Language. (Registration, Generic Caps, 1 hour test requirements …) [Projects initiated or identified]. Possible PUCT rule changes related to “Charging Energy”. (SPP and Meter Price calculations, wholesale transaction vs. retail transaction, exemption from Load allocated charges and AS Obligations). System Upgrades (Look-Ahead SCED). Pilot Programs. Next Steps.

3 Where We Are Today: December 2, 2011ERCOT Energy Storage Workshop Obligated to follow current Protocol language until changed. Near Term Registration: Decompose Storage Resource into a Load Resource and Generation Resource. Existing Generic Caps (Start-Up, Min Energy, EOC Caps for Make-Whole Calculations) [May need to submit Verifiable Costs]. Need Protocol changes and projects initiated. (Define Resource Categories in the Protocols and their Generic Values).

4 PUCT Rule Changes Under Consideration December 2, 2011ERCOT Energy Storage Workshop Possible PUCT rule changes related to “Charging Energy”. Potentially impacts SPP and Meter Price calculations, wholesale transaction vs. retail transaction, exemption from Load allocated charges and AS Obligations. Likely there will need to be protocol changes and system changes.

5 ERCOT Energy Storage Workshop December 2, 2011 FEATUREPJMMISONEISONYISOSPPCAISOERCOT Ancillary Service Co- Optimization Yes Both IT SCED and RT SCED Yes LOC/no AS offers Yes Both RTC and RTD Yes in RTUC No Ancillary Service Substitution Yes NoYes No Ancillary Service Ramping Limits Yes single values Yes single values Yes single values Yes single values Yes single values Yes single values No Ramp Rate Sharing Yes Partial and separate ASO YesNo Yes Partial/ Configurable Yes Partial/ configurable Yes Partial En/Reg Transmission Constraints Yes Zonal Yes Nodal Yes Zonal(?) Yes Nodal Yes Nodal Yes Nodal Yes Nodal Demand Response Yes Energy and reserve Price Responsive Demand bids Yes Energy and reserve Yes Energy and reserve Yes Energy and reserve Yes Energy and reserve Yes energy and reserve No Storage ResourcesYes DLR Regulation Yes DLR Regulation Yes DLR Regulation Yes DLR Regulation and Pump Storage Hydro Yes DLR Regulation Yes DLR Regulation and Pump Storage Hydro No Comparison of Real-Time Market Features

6 Main Components of “Look-Ahead SCED” December 2, The main components of “Look Ahead SCED” are: Real-Time Commitment (RTC) Application Real-Time Dispatch (RTD) Application 2.The Real-Time Commitment (RTC) Application executes every 15 minutes with a rolling window for up to two hours study period that is comprised of up to 7 time intervals of 15 minutes each. The outputs of RTC are: Commitment Instructions for Generation, Load and Energy Storage Resources. AS Awards and MCPC. (Note: If a decision is made that Non-Spin is ONLY from OFFLINE Resources, AS Co-optimization can be moved to RTD). 3.The Real-Time Dispatch (RTD) Application executes every 5 minutes with a rolling one hour window study period that is comprised of 12 time intervals of 5 minutes each. The outputs of RTD are: Dispatch Instructions (Energy MW Base points) for Generation, Load and Energy Storage Resources. LMP at all Settlement Points and Electrical Buses. ERCOT Energy Storage Workshop

7 Storage Functionality in “Look-Ahead SCED” December 2, 2011 See section 2.2 of the Look-Ahead SCED White Paper version 1.2 This can be found at: ookAheadSced_1128workshop.zip Storage Resource Participation a) Operational Characteristics b) Resource Registration c) Market Submission ERCOT Energy Storage Workshop

8 Moving Forward on “Look Ahead SCED” December 2, 2011 ERCOT Energy Storage Workshop PhaseTimelineFeature ImplementedComment Phase -1Summer 2012 Short-Term future Advisory/Indicative Base Points and LMPs using basic version of RTD. Will initially run in Open- Loop i.e outputs (Base Points, LMPs) are Advisory/Indicative. i.e. non-binding. Phase-2Summer 2013 Commitment for QSGR and Load Resources with intra-hour temporal constraints using basic version of RTC. Will initially run in Open- Loop i.e. outputs (Commitment instructions) are Advisory/Indicative. i.e. non-binding. Phase-3Spring 2014 Real-Time Ancillary Service and Energy Co-optimization using RTC. Phase-4Fall 2015Transmission constraints for future intervals

9 Moving Forward on “Look Ahead SCED” December 2, 2011 ERCOT Energy Storage Workshop

10 Pilot Programs December 2, 2011ERCOT Energy Storage Workshop PUCT rule is needed before a Pilot Program could begin. Considering a “technology neutral” Pilot Program for a new Ancillary Service (fast responding regulation service). Reviewing the FERC Final Rule (issued October 20, 2011) on “Frequency Regulation Compensation in the Organized Wholesale Power Markets. ( meet/2011/102011/E-28.pdf) meet/2011/102011/E-28.pdf Considering potentially compensating frequency regulation resources based on actual service provided and quantity of service provided. Pilot Programs “To Be Determined”.

11 Next Steps December 2, 2011ERCOT Energy Storage Workshop Write NPRRs to address Resource Categories and Generic Caps. Write NPRRs to reflect upcoming PUCT rules on “Charging Energy”. Provide input to Look-Ahead SCED development and associated NPRRs. (Jan 2012 through September 2012) Continue to investigate costs and benefits of potential Pilot Programs.

12 Questions December 2, 2011ERCOT Energy Storage Workshop