What's Changing
The transition to the nodal market will require significant changes to processes and systems. In today’s zonal market, the grid is divided into congestion management zones (CMZs), which are defined by commercially significant constraints (CSCs). Moving to a nodal design will satisfy the PUCT order to directly assign local congestion. The nodal market grid will consist of more than 4,000 nodes, replacing today’s CMZs. However, some ERCOT business won’t change at all.
Processes and systems that won’t change significantly include the following:
- Components or structure of the current retail market
- Black start planning and procedures
- Renewable Energy Credit (REC) program
- Treatment of transmission and distribution losses
- Unaccounted for energy (UFE)
The major components that will impact ERCOT’s current business model include the following:
- Day-ahead market (DAM)
- Reliability unit commitment (RUC)
- Real-time or security constrained economic dispatch (SCED)
- Congestion revenue rights (CRRs)
| Today's Zonal | Tomorrow's Nodal |
| Transmission Congestion Rights (TCR) | Congestion Revenue Rights (CRR) |
| Day-ahead market for ancillary services procured for capacity No day-ahead energy market |
Day-ahead energy and ancillary services co-optimized market (DAM) |
| Replacement reserve service (RPRS) and out-of merit capacity (OOMC) | Day-ahead reliability unit commitment (DRUC) |
| Hour-ahead studies | Hourly reliability unit commitment (HRUC) |
| Portfolio-based offers by zone | Resource-specific offers |
| Balancing energy service (BES) every 15 minutes Zonal congestion managment by portfolio for CSCs Resource-specific for local congestion |
Security constrained economic dispatch (SCED) generally every five minutes (still 15-minute settlement) All congestion management will be resource-specific Enhanced load frequency control |
| Zonal average shift factors for resources | Actual shift factors for resources |
| Zonal market clearing prices for balancing energy for generation and loads | Nodal locational marginal pricing (LMP)for generation Zonal weighted LMP for loads |