Look ahead to the unforeseen: ERCOT's nonbinding look-ahead SCED study

Abstract

In June 2012, ERCOT has launched a study tool to provide customers look-ahead real-time wholesale market prices for the next hour. Even though these forward-looking prices are indicative and non-binding, large electricity consumers can use this information to make operational decisions based on anticipated electricity price changes. These prices are calculated by a Look-Ahead Security Constrained Economic Dispatch (LA-SCED) optimization taking into account short-term load forecast, short-term wind power forecast, generator ramping capabilities and future commitment status changes. This paper shares some interesting results of this look-ahead study. The study shows that because of forecast errors and unforeseen events, look-ahead optimization could sometime create misleading price signals to consumers. With more than 10,000 MW wind generation capacity installed in ERCOT, this study result could suggest potential challenges that other ISOs/RTOs may face in the near future.