Announcing Publication of Flexible Loads Playbook (Rev 1.0)

Hello World!

We are glad to announce the publication of our inaugural ERCOT Flexible Loads Playbook. Our attempt to distill a year’s worth of data, numbers, and prices into a comprehensive and transformative resource for the emerging industry in the flexible load space, particularly in flexible computing.

Why us?

Lōd is a recent spin-off of Lincoin Technologies Inc. Over the past two years, we, at Lincoin, dedicated our efforts to building a Bitcoin mining compute marketplace (also known as a mining pool) and developed an energy strategy and operations management tool alongside it. As our product evolved, the energy and flexible load components became as prominent as the Bitcoin aspect. This led us to initiate Lōd, aiming to better address the growing demands for flexible loads and energy-intelligent computing, including Bitcoin mining.

At Lōd, our objective is to establish a new paradigm and pioneer the next generation of tools and solutions for emerging industries, taking it one industry at a time, starting with Bitcoin mining. This report represents our initial endeavor to decipher the numbers and mathematics underlying the ERCOT energy market, providing understandable and insightful information for our peers in the flexible load industry.

Why ERCOT?

We consider ERCOT to be the most innovative, dynamic, and inclusive market for new technologies in the energy sector. Our conviction is substantiated by the analysis of gigabytes of data from nine deregulated electricity markets across North America. It is not only about the technical aspects of the market design and programs but also the free market mindset and promoting competition and equal opportunities for different technologies without discrimination.

Why Now?

We are currently in the midst of a global transition in the management of our electrical power grids. The move from reliance on controllable generation driven by fossil fuels to resources that are renewable but intermittent in nature has completely disrupted our ability to maintain grid reliability. To combat the increasing loss of control on the generation side of the equation, grid managers are looking for added control on the load side of the equation to maintain grid balance and ensure reliability. At Lōd, we strive to be a part of that solution.

The market has unequivocally demonstrated its readiness to incorporate flexible loads into the grid. Technological progress has enabled over 2,000 MW of load to flexibly participate in various grid programs on a daily basis. Interestingly, it’s not just the flexible loads benefiting from ERCOT; the grid, loaded with intermittent energy sources, is faced with unpredictable supply, necessitating flexible demand.

What to Expect in this report

This is our inaugural attempt, and we believe it’s a necessary step forward. While acknowledging that we may not be the most qualified team for this report, we felt compelled to initiate this effort. Making this decision was challenging, but we believe someone needs to set the wheels in motion. Therefore, as you read this report, understand that we aren’t perfect. We welcome your feedback, aim to learn from you, and are committed to enhancing this Playbook progressively.

We’ve organized the data into four segments based on seasons, outlined below:

Segment 1 (Winter): January and February
Segment 2 (Spring): March – May
Segment 3 (Summer): June – September
Segment 4 (Fall): October – December

Chapter 2 includes some of the basics necessary to understand the dynamics of the market and explains the jargons commonly used across this playbook and across the industry.

In the third chapter, we delve into the analysis of Settlement Point Prices (SPP) and congestion across four major hubs and zones. Following this, we explore demand, mapping it into Locational Marginal Pricing (LMP) and SPPs data, and further correlate the energy mix data with demand and SPPs.

Moving on to the 4th chapter, we review ancillary services and Emergency Response Service (ERS) details.

Chapter five utilizes the data to estimate the economics and profitability of Bitcoin mining operations in ERCOT West Zone. We explore how the right energy strategy can significantly enhance the profitability of Bitcoin mining.

Who Benefits from this Playbook?

Flexible load operators, including Bitcoin miners, seeking effective day-to-day energy management solutions.
Energy consumers, generators, traders, as well as those involved in buying or selling hedges, power blocks, or Power Purchase Agreements (PPA).
ERCOT itself, and other ISOs, Utilities, and cooperatives who are interested in comprehending the behavior of flexible loads.
Non-flexible loads aiming to strategize their mid and long-term energy consumption and schedules.
Energy storage operators in need of formulating energy arbitrage strategies.
New and emerging flexible loads and flexible computing resources looking to gain insights from the experiences of Bitcoin miners.
Researchers and universities who are seeking to study the behavior of flexible loads and their integration into the grid
And, of course, you! If you harbor a passion for energy and energy markets, we believe we have some intriguing insights to share.