What is Texas Nodal Market Implementation?
In September 2003, the Public Utility Commission of Texas ordered ERCOT to develop a nodal wholesale market. In today’s zonal market, the grid is divided into Congestion Management Zones (CMZs). Several limitations of the current zonal model have been identified: • Insufficient price transparency–This results in less efficient power dispatch, less efficient congestion management tools, and distorted signals for investment. • Resources grouped–Schedules are submitted for a group of resources in a specific zone, and ERCOT operators have limited options to resolve congestion. • Indirect assignment of local congestion–Participants who contribute to local congestion are not directly assigned the associated costs. In the nodal market, the grid will consist of more than 4,000 nodes, replacing today’s CMZs. The nodal design is expected to deliver the following benefits: • Improved price signals–Granular pricing will encourage additional generation/transmission in the proper locations. • Im
