As ordered by the Public Utility Commission of Texas (PUCT), Electric Reliability Council of Texas (ERCOT) will be moving from a Zonal to Nodal Wholesale Market in Texas. This transition involves moving from a grid system divided into 4 Congested Management Zones (CMZs) to one comprising of over 4000 nodes. In a nodal market, wholesale electricity prices are calculated for specific delivery points (called nodes) based on the demand, generation and transmission available to serve the local area. This type of system is intended to increase reliability and create more efficiently managed operations.

Comparative Analysis: Zonal Market vs. Nodal Market

Key benefits of nodal market structure

  • Improved price signals due to a more granular pricing model
  • Improved dispatch efficiencies resulting in lower overall cost of power supply
  • Direct assignment of local congestion to the resource causing the congestion

Transition Status
The transition is currently in the 5th stage of the Market Trials. There will be a 168-hour test on September 1st, 2010 then the official changeover will likely go live on December 1st, 2010. Once the transition has been implemented, consumers of ERCOT Zonal data will no longer have access to the market data; providing detrimental implications to market players.

Solution
ZE Power Group is the company that has taken a proactive approach to this transition much like the preparation for the Market Redesign and Technology Upgrade (MRTU) program developed by the California Independent System Operator (CAISO). ZE is currently working with ZEMA* clients to mitigate potential data issues resulting from the transition. As this transition has significant implications for the users, ZEMA has dedicated resources to ensure complete and timely market data from ERCOT is accessible to ZEMA users as soon as the new data is published. For ZEMA users, the transition will be seamless and the new data will be manageable on day one of implementation.

For information on how you can prepare for the ERCOT Nodal Market Implementation, contact a ZEMA representative at zema@ze.com or 1-866-550-9362.

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*) ZEMA suite – data management and analysis software