In recent weeks, congestion along a line in southern Texas – LOMA_A_L_FRES1 – has been observed a number of instances in the real-time (RT). Despite the fact that this constraint is relatively small and isolated within the ERCOT footprint, the RT pricing impact of this constraint has been significant, to say the least. Largely attributable to the location of this constraint, RT congestion in and around this area has the potential to drive prices at the Silas Ray generation resource node in Brownsville, TX up to $4,380.00 (1/27/16 HE 20). The strong pricing at this node in turn drives an extremely bullish impact on South LZ prices which, in recent instances, have climbed to $337.39 (2/23/16 HE 19).
The first time this congestion showed up in the RT in recent history with significance* was on January 11, 2016. Figure 1, below, is a screenshot from Genscape’s Nodal Market Intelligence (NMI) tool– a comprehensive web-based application for congestion trading and analysis – which proved very effective in identifying the transmission drivers and pricing impacts of this constraint. As the figure shows, one line in the Brownsville, TX area – LAUREL_P_ISAB01 – was out of service that day, which redirected power flows and drove the congestion along the LOMA_A_L_FRES1 line. On subsequent days, another line outage, the PAREDES – MV_CNTRA 138 Kv line, which entered outage on 1/21 and remains out through 4/22, compounded the issue such as on 1/27/16 (shown below). As displayed via the SPP heat map on the NMI screen shot below, prices at the Silas Ray node became very strong as a result of the congestion.
What we’ve found is that, in addition to transmission outages at LAUREL_P_ISAB01 in the area, a combination of strong load and weak generation in the Brownsville, TX area has been a primary driver of this congestion in the RT. The chart below highlights RT pricing at the Silas Ray node, congestion on the LOMA_A_L_FRES1 line, generation at the Silas Ray unit via Genscape’s Power RT data, and temperatures in Brownsville, TX**. Also on the graph are red bars which mark the high/low temperature thresholds that were established for risk of LOMA_A_L_FRES1 congestion in the RT due to outage along LAUREL_P_ISAB01. The circles on the chart below that indicate the RT impact when these thresholds were crossed.
As evidenced in the graph above, when temperatures in Brownsville, TX crossed 47° or 80° F (indicating strong heating/cooling load), the LOMA_A_L_FRES1 line had a high frequency of congesting in the RT (as indicated by the red circles). There were only a few instances when these temperature thresholds were passed and the congestion did not occur in the RT; weekends when the LAUREL_P_ISAB01 line was in service (as indicated by the purple circles) as this outage was a rolling intraweek outage and also when generation at Silas Ray was sufficient enough in the RT to offset the congestion risk (as indicated by the blue circles). With this information available, we found a much stronger ability to predict this congestion in the RT with increased accuracy and confidence.
In more recent weeks, transmission outages in the valley have changed and the congestion along the LOMA_A_L_FRES1 line has become significantly more sensitive with a transmission outage along the LAUREL_LA_PAL11 line replacing the LAUREL_P_ISAB01 outage (NMI screen shot above). As the chart below indicates, a new temperature threshold of as low as 72° F when coupled with weak generation at the Silas Ray generation resource has recently been established for this constraint in relation to the new LAUREL_LA_PAL11 line outage. With the LAUREL_LA_PAL11 line due to be on rolling, intraweek outage through April 8, 2016, this data will continue to prove a valuable combination in monitoring and predicting this volatile constraint.
This summary is an example of the analysis that Genscape’s ERCOT Power IQ analyst team undertakes on a daily basis around transmission and generation risks. In addition to Power IQ's proprietary price and powerflows model (SEER), the analysts are able to leverage the Nodal Market Insights platform coupled with Genscape’s Power Real-Time (RT) monitoring capabilities to gain further insight into the ERCOT power market.
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*Congestion showed up on January 11, 2016 with negligible shadow prices. Before that, congestion hadn’t posted in the RT since July 23, 2014.
**Temperatures in Brownsville, TX were used as the best indicator high/cooling load in Brownsville, TX due to the granularity of this data point.