NYISO’s SCR Program Transition from 4-Hour to 6-Hour Duration is taking too long!
It takes 2 years to make a simple software change at NYISO! Meanwhile, Aggregators are stuck with lower capacity accreditation factor.
I attended NYISO’s ICAPWG on Monday, July 15, to learn about this 4-hour to 6-hour change regarding the SCR program. And was disappointed to learn that NYISO says it takes two years for a simple change to occur.
This is why this change from 4-hour to 6-hour matters: Take New York City, for example; a 4-hour Energy Duration Limited resource (e.g., special case resource) receives only 68.84% capacity accreditation factor (CAF), but a 6-hour SCR program receives 90.41% CAF. So, it is a big deal for Aggregators.
Source - NYISO
“Special Case Resources (“SCRs”) are a type of Demand Side Resource that may offer Unforced Capacity (“UCAP”) into the NYISO’s ICAP market as ICAP Suppliers. SCRs are enrolled by Responsible Interface Parties (“RIPs”) which may aggregate multiple SCRs and which serve as the interface between the NYISO and the Resources. Resources may be enrolled in either the EDRP or the ICAP/SCR program, but not both. SCRs that have sold ICAP are obligated to reduce their load when called upon by the NYISO with two or more hours in-day notice, and with day-ahead notice from the NYISO.”
Source - NYISO
The New York Independent System Operator (NYISO) is embarking on a transformative journey to enhance its Special Case Resource (SCR) program. This change, driven by stakeholder feedback and the evolving needs of the electrical grid, marks a significant shift from a 4-hour-duration limited resource to a 6-hour-duration limited resource. While this transition is gradual, it reflects a broader strategy to adapt to New York's dynamic energy landscape.
Source - Unsplash
Understanding the SCR Program
The SCR program is a reliability-based demand response initiative that allows certain large consumers to reduce their electricity use during peak demand periods. This not only helps in balancing supply and demand but also ensures the reliability and stability of the grid. Traditionally, participants in the SCR program have been required to be available for a 4-hour duration. However, with the increasing complexities and demands on the grid, a longer duration has been proposed.
Source - NYISO
The Push for a 6-Hour Duration
In recent market design discussions, several Responsible Interface Parties (RIPs) suggested extending the SCR duration requirement from 4 hours to 6 hours. This recommendation is based on the need for greater flexibility and reliability in managing the grid, especially as New York’s energy landscape undergoes significant changes.
A survey conducted to gather feedback from market participants on various aspects of the Engaging the Demand Side project, including the proposed SCR duration modification, indicated strong support for extending the SCR duration to 6 hours.
As of July 31, 2023, a total of 7,981 Resources were enrolled in the NYISO’s EDRP and ICAP/SCR programs. Source - NYISO.
EDRP is an Emergency Demand Response Program.
“The EDRP offers Demand Side Resources the opportunity to earn the greater of $500/MWh or the prevailing Locational-Based Marginal Price (“LBMP”) for curtailing energy consumption when called upon to reduce Load by the NYISO. EDRP Resources are enrolled by Curtailment Service Providers (“CSPs”), which serve as the interface between the NYISO and Resource. Load curtailment by EDRP Resources during NYISO-called events is voluntary.” Source - NYISO
Benefits of the 6-Hour Duration
Enhanced Revenue Opportunities: By extending the SCR duration, participants can earn additional revenue for their load reduction efforts. This makes the program more attractive to potential participants and encourages greater involvement.
Improved Grid Management: A longer duration provides NYISO grid operators with better tools to balance supply and demand. It ensures that the grid can maintain stability during longer periods of high demand or unexpected supply shortfalls.
Adaptation to Future Needs: As the New York grid transitions to a winter-peaking system and integrates more renewable energy sources, the flexibility and reliability offered by a 6-hour SCR program become increasingly critical.
Baseline Methodology Changes: ACL to CBL
A significant aspect of the SCR program enhancement involves changing the baseline methodology from the Average Coincident Load (ACL) to the Customer Baseline Load (CBL). This transition is expected to have notable impacts on the demand response capacity of SCRs:
Expected Reduction in SCRs: The shift from ACL to CBL is anticipated to result in a 20-25% reduction in SCRs. This is because the CBL method, which calculates the baseline based on the highest five consumption days of the last 10 "like" days prior to a demand response event, generally results in lower demand response MWs compared to the ACL method.
Variability by Customer Type and Location: The CBL method's impact varies by customer type and location, leading to a consistently lower baseline than the ACL method. This variability can affect the demand response MWs that SCRs can provide, depending on the specific characteristics of the customers and their geographical locations.
Source - NYISO
Stakeholder Concerns and NYISO’s Proposed Package
NYISO is proposing a package that includes not only the shift to a 6-hour duration but also shorter activation times and the transition to the CBL baseline methodology. This comprehensive package aims to address multiple aspects of the SCR program simultaneously. However, this approach has not been without its detractors.
Stakeholder Concerns:
Timing of Implementation: Many stakeholders are unhappy with NYISO's prioritization of the full package of changes to be ready by the summer of 2026. This timeline requires the necessary software changes to be in place by February, adding pressure to an already complex transition process.
Prioritization Requests: Stakeholders have voiced a preference for NYISO to prioritize the implementation of the 6-hour duration ahead of the shorter activation times and CBL changes. They believe that addressing the duration requirement first will provide immediate benefits and allow more time to consider the implications and prepare for the other proposed changes.
Implementation Timeline
The NYISO plans to deploy these changes for the 2026-2027 Capability Year. Recognizing the complexities involved, the final market design details may require a phased implementation. This careful and deliberate approach ensures that all stakeholders have sufficient time to adapt to the new requirements and that the transition is as smooth as possible.
Future Enhancements and Considerations
Beyond the duration change, the NYISO is also exploring other enhancements to the SCR program. These include:
Shortening the Advisory Activation Window: Reducing the current 21-hour notice period for SCR activation will provide more flexibility in deploying resources when they are most needed.
Alternative Telemetry Methodologies: Addressing stakeholder concerns about telemetry requirements for the DER Participation Model, NYISO plans to explore alternative methodologies in future phases of the Engaging the Demand Side project.
Conclusion
The shift from a 4-hour to a 6-hour duration for the SCR program at NYISO is a critical step toward enhancing the reliability and flexibility of New York’s electrical grid. While the transition is gradual, it is informed by extensive stakeholder feedback and aligns with the broader goals of adapting to a rapidly changing energy landscape. By extending the duration and implementing additional program enhancements, NYISO is ensuring that its demand response initiatives remain robust and effective in supporting the grid of the future. However, the concerns raised by stakeholders highlight the importance of careful planning and prioritization to ensure the success of these changes.