Cracking ERCOT’s Co-Location Code: Inside the New WLPUN Construct
Why your 1,200 MW generator might only get you 500 MW of load, how "allocated load" isn't a firm right, and the NOGRR282 strategy.
This article is about Load Wars.
Specifically, it is about ERCOT’s version of “Co-Location” or “Bring Your Own Generation.” ERCOT is calling this a “Withdrawal-Limited Private Use Network” (WLPUN). ERCOT just posted two sets of comments/proposed rule updates in this topic area:
Thursday April 30 ERCOT Comments: Updates to existing language for Batch Zero and PCLR (for improvements and in response to market comments)
Friday May 1 ERCOT BYOG Comments: Latest comments plus the scope of WLPUNs.
At today’s Batch Study Workshop (the eighth in a series), we ran through the details of the newly filed proposal in a three-hour meeting. ERCOT staff outlined how co-located generation will be treated, noting that consultations with their operations team led to significant modifications over prior informal stakeholder discussions.
According to staff, the most substantial change to the proposal dictates that grid stability—not the total capacity of your on-site generation—will serve as the ultimate cap on the load (effectively meaning the generator is seen as “off” for the planning analysis that caps the load withdrawal limit). That being said, ERCOT is implementing strict “anti-shrinkage” rules for the generation assets tied to these projects to preserve the validity of the interconnection studies - IOW, do not show up with a signed 500 MW generator interconnection agreement (“SGIA”) for the WLPUN configuration if you committed 800 MWs of generation to ERCOT for the studied WLPUN configuration.
To receive credit for the generation portion of the WLPUN, both the load and the generation must meet strict alignment deadlines. On the generation side, this specifically means meeting the requirements to be included in the Steady State Working Group (SSWG) base cases, as laid out in Planning Guide Section 6.9, paragraph 1. There is no netting in studies (generator study progress cannot be used to render a large load “more ready” under load study criteria), but synchronized deadlines for both are necessary.
ERCOT staff also articulated broader design choices to rely on participant behavior to maintain system reliability. A proposed withdrawal limit and correction window for overwithdrawal (QSE receives this instruction for the load) would be established after screening for stability and cascading risks, meaning that any remaining constraints are expected to be limited to thermal and voltage considerations - and thus staff has proposed a rapid response time to an overwithdrawal of no more than one minute.
Stakeholders raised a few concerns:
ERCOT’s methodology may systematically overstate transmission needs by not crediting on-site generation in planning analyses, even while requiring that generation for operational compliance.
Another key point of discussion was the level of maturity required for generation resources to qualify under the WLPUN construct—specifically whether a generator must have an active interconnection study underway or whether earlier-stage projects can participate.
In practice, the proposal could enable a WLPUN project to receive an “allocated load” value that exceeds its withdrawal limit, since the amount of power it can reliably draw from the grid is not gated primarily by the size of its on-site generation. And, if the co-located generation trips or underperforms, the load must quickly reduce to its withdrawal limit, which may be substantially lower. Under the WLPUN construct therefore, “allocated load” should be understood as a conditional, study-based quantity rather than a firm transmission right. The binding constraint for operational and commercial purposes is the withdrawal limit, not the allocated load. This distinction will be central to how projects are structured, financed, and evaluated going forward.
Over the past few weeks, I’ve heard a lot of skeptics in the hyperscale customer service space say that co-location configurations will be an easier engineering solution than PCLR because the loads in co-location configurations could “rely on the generator” to avoid ERCOT having “sovereign control” over the load. I cannot emphasize the degree to which this is a gross mispresentation of how grid connection dynamics work in practice. As the WLPUN proposed rules are clearly demonstrating, dynamic management of a load in a generation-paired scheme still requires mechanical and electrical configuration solutions to ensure the load is available for a “curtailment of last resort,” even if the loads are not directly compliant in ERCOT SCED as they would be in a PCLR registration under five-minute instruction. In fact, the WLPUN scheme proposes that QSEs enforce a load overwithdrawal correction in one minute or less.
Much is left to be worked out as these rules are refined over the next few weeks. Nevertheless, it is impressive to see ERCOT’s commitment to enable a voting-ready package for WLPUN this month at PRS and ROS, two committees that review NPRRs and PGRRs, respectively. Brownie points for those paying attention: these rules are technology and fuel-type agnostic. Any type of generation or batteries, i.e. anything that can be a Resource in ERCOT today, may qualify as the paired generation for a WLPUN.
Last but certainly not least: NOGRR282 is interestingly a reliability standard that is also a potential market-enabling mechanism for the shaping WLPUN world. By demonstrating that the intelligent control systems required for NOGRR282 subsecond response can also seamlessly manage WLPUN generation contingencies, there is some opportunity to move beyond conservative planning assumptions for the load’s withdrawal limits and unlock the value of co-location.
Deep details on today’s clarifications and pros/cons for Luminary’s paid subscribers below.
