Report: Texas demand response issues mirrors FERC 745 debate
They say that everything is bigger in Texas. And with the country’s only organized market without federal oversight – ERCOT exists totally within the state’s boundaries – one would think that developing a demand response market would also be simpler. Not so, according to SPEER’s new demand response report.
“Texans are not immune to national debates on economic and legal matters that affect our market design,” the group said. “ERCOT has allowed DR to participate in its wholesale market in a variety of ways.”
The report concludes that wholesale market prices in ERCOT could be “reduced substantially by the participation of even a modest increment of additional demand response in this energy market.” SPEER found incremental demand response of 1,500 MW or less, in a few critical hours on only five days across the mild weather years of 2012 and 2013, “could have led to a total reduction in spot market costs of as much as $200 million.”
SPEER said daily energy markets are an “appropriate and organic expansion” of demand response, but also said that ERCOT is struggling to develop pricing measures in a debate that closely mirrors national issues. While the debate generally hinges on locational marginal pricing v. avoided cost, the report concludes that accuracy should not necessarily trump precision.