Making mega-scale energy savings in Texas

2013-03-11 - Electricity consumers in the state of Texas save tens of millions of dollars a year and benefit from improved system reliability through the installation of a state-of-the-art nodal market management system now a part of Ventyx, ABB’s enterprise software business.

By ABB Communications

Dallas, Texas
Texas is the second largest and second most populous state in the United States. It also generates and consumes more electricity than any other US state.

ERCOT (Electric Reliability Council of Texas) is the independent system operator for electricity in Texas. It manages the flow of electric power to 23 million Texas customers and 85 percent of the state's electric load, across a power grid comprising 40,500 miles of transmission lines and more than 550 generation units. It also manages the Texas competitive wholesale electricity market and the market’s financial settlements, which amount to tens of billions of dollars a year.

In 2006 ERCOT selected the nodal market management system to replace its existing and increasingly inadequate zonal system to improve market efficiency and the management of transmission congestion.

In ERCOT’s old zonal system the grid was divided into five congestion management zones, each of which set a single price over the entire zone. The new system, on the other hand, is divided into more than 4,000 nodes. This enables scheduling, bidding and deployment at the nodal level and allows the costs of congestion to be assigned on a nodal basis, instead of being approximated across an entire zone.

Pricing is, therefore, more accurate and dispatching more efficient.

Zonal and nodal electricity markets, Texas
The Ventyx solution is the most advanced market management system in use today. Its main components include a secure trading environment, day-ahead and real-time market capability to enable cost-effective and efficient operations, a supplementary ancillary service to procure additional capacity, and reliability unit commitment processes to continuously evaluate and maintain system sufficiency and security.

The ERCOT nodal market successfully went live in December 2010, with the market management system as its main engine. Within the first six months of operation the new nodal market had reduced the cost of wholesale energy in the ERCOT system by 13 percent.

According to an independent cost benefit analysis produced by the Public Utility Commission of Texas, the expected savings to consumers and generation companies over the long term are on a mega-scale.

The report estimates that over the first 10 years of operation the new ERCOT nodal market will achieve savings in generation costs of $339 million and a reduction in consumer wholesale electricity payments of $5.6 billion.

Click here to learn more about the ERCOT nodal market solution.

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