Evolution of ERCOT Market

The process of restructuring wholesale electric power markets in the United States has so far been very successful overall and is now entering a new phase of either fine-tuning or fundamental re-reforms of the markets. The restructured ERCOT electric power market has attracted special attention due to its particular characteristics such as its adoption of zonal portfolio model and its choice of a bilateral and ancillary service market without a spot energy market. Battling rigorously with problems and challenges constantly encountered along the way and continuously seeking for better and more efficient resolutions to improve its market, ERCOT continues to stay in the spotlight of the power industry restructuring arena. This paper gives a brief but comprehensive introduction to market operations in ERCOT, which embodies all the market policies and important changes that ERCOT has adopted since its market opening in 2001. This paper also discusses some operational challenges and market inefficiencies in ERCOT, the ongoing discussions of market redesign, and the current status of the evolution of the ERCOT market. In the end, ERCOT market is compared with California market regarding system conditions, market structure, and market operations