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Price Formation without VRE Generators depicts a simplified standard generator portfolio without VRE generators, ordered along the xaxis by increasing marginal production costs, where the width of each bar represents the available capacity of the generators. At any given point in time, the price of electricity is based on the marginal
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Increasing penetrations of variable renewable energy (VRE) can affect wholesale electricity price patterns and make them meaningfully different from past, traditional price patterns. Many long-lasting decisions for supply- and demand-side electricity infrastructure and programs are based on historical observations or assume a business-as-usual futu...
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... Under high VRE shares, the demand for reserves tends to increase to mitigate forecast errors [207]. However, the German experience shows the opposite. ...
... Consequently, PV-linked ESS operators continue to set and operate their ESSs with fixed charging and discharging patterns without installing communication and control equipment. However, this operational strategy fails to reflect current system conditions and market prices or the system marginal price (SMP), given the increased proportion of renewable energy [12]. Furthermore, operating ESSs with fixed charging and discharging patterns without considering variations in SMP patterns during weekdays, weekends, and holidays is inefficient for both PV-linked ESS operators and system operators. ...
... On average (No. [1][2][3][4][5][6][7][8][9][10][11][12], the charging amounts for the PV-linked ESS operators increased by 11.84% following the application of the proposed charging strategy from January to April 2023. ...
With the intensification of the global commitment to renewable energy, South Korea’s rapid expansion in renewable capacity necessitates efficient operational strategies to address the inherent variability of these energy sources. Despite the implementation of policies aimed at integrating energy storage systems (ESS) with renewable generation, such as providing additional renewable energy certificates (RECs), the measures undertaken remain relatively ineffective. Thus, this study evaluates the shortcomings of existing policies and proposes an innovative operational strategy tailored to Korea’s energy landscape. The strategy is implementable immediately using existing facilities, without requiring any new equipment, and facilitates profits of up to 12.45% greater compared with those generated using the original approach. Moreover, the results are nearly as effective as an ideal scenario wherein the PV generation and system marginal price are accurately known. Additionally, the decreased economic feasibility of ESS owing to the discontinuation of subsidies is highlighted and solutions are proposed to mitigate the problem. This underscores the urgent need for improved regulatory measures and enhanced operational strategies. The proposed approach highlights the potential to considerably reduce inefficiencies and operational costs, thereby contributing to more sustainable energy management practices within Korea.
... ii) Limited metal mining capacity and reserves, infrastructure build rates, and availability of financial capital will delay-and likely disrupt-the transition from fossil fuels to electricity, creating system-wide instability (Allwood et al. 2021;Michaux 2021Smil 2016Smil , 2022. iii) Even if average electricity prices fall as the transition proceeds, absent new technology to store power or balance variable supplies, wind and solar grids will lead to large diurnal and seasonal price variation and volatility and make shortages more likely (Michaux 2021;Seel et al. 2018). ...
Like everything for the past 2 centuries, agriculture has depended increasingly on fossil fuel energy. Pressures to shift to renewable energy and changes in the fossil fuel industry are set to massively alter the energy landscape over the next 30 years. Two near-certainties are increased overall prices and/or decreased stability of energy supplies. The impacts of these upheavals on specialty crop production and consumption are unknowable in detail but the grand lines of what will likely change can be foreseen. This foresight can guide the research, extension, and teaching needed to successfully navigate a future very unlike the recent past. Major variables that will influence outcomes include energy use in fertilizer manufacture, in farm operations, and in haulage to centers of consumption. Taking six increasingly popular fruit and vegetable crops and the top two horticultural production states as examples, here we use simple proxies for the energy requirements (in gigajoules per ton of produce) of fertilizer, farm operations, and truck transport from Florida or California to New York to compare the relative sizes of these requirements. Trucking from California is the largest energy requirement in all cases, and three times larger than from Florida. As these energy requirements themselves are all fairly fixed, but in future will likely rise in price and/or be subject to interruptions and shortages, this pilot study points to two commonsense inferences: First, that fruit and vegetable production and consumption are set to reposition to more local/regional and seasonal patterns due to increasing expenses associated with fuel, and second, that coast-to-coast produce shipment by truck will become increasingly expensive and difficult.
... A nivel mundial, algunos estudios analizaron el efecto del aumento de energía renovable variable en los precios horarios de mercados eléctricos con predominio de generación térmica y nuclear, como en el caso de México [10] y algunas zonas de Estados Unidos [8], [11]. ...
The increase in solar and wind generation carries flexibility problems for electrical systems, which could be solved by implementing large-scale energy storage plants. Arbitrage buying energy, storing it, and then selling it at a higher price is one of the primary sources of revenue for large-scale storage plants. To financially evaluate an arbitration project, it is necessary to estimate hourly spot prices for time horizons comparable to the project's lifespan, which is a very complex task due to the multiple variables that affect the price of electricity. This paper seeks to answer the following questions: will arbitration be enough to make large-scale storage projects viable in Colombia, assuming a massive incursion of solar and wind energy And which variables affect the arbitrage potential We developed a dynamic simulation model to estimate hourly spot prices over a 12-year horizon. We find that the massive incursion of solar and wind generation will decrease the arbitrage potential, making the storage projects that depend exclusively on this income unfeasible. This result implies that project developers and regulators must structure other remuneration mechanisms to incentivize large-scale storage construction.
... For example, lower output variability could reduce the required total capacity of reliability services products like frequency regulation and spinning reserves. Hybrid systems with more predictable, uniform output could also provide these reliability services instead of being a reason for their procurement (Seel et al., 2018). However, market participation models need to be studied, developed, and adopted for the full value of hybrid resources to be realized in electricity markets (Goggin et al., 2018;Stenclik et al., 2022). ...
As shares of variable renewable energy (VRE) on the electric grid increase, sources of grid flexibility will become increasingly important for maintaining the reliability and affordability of electricity supply. Lithium-ion battery energy storage has been identified as an important and cost-effective source of flexibility, both by itself and when coupled with VRE technologies like solar photovoltaics (PV) and wind. In this study, we explored the current and future value of utility-scale hybrid energy systems comprising PV, wind, and lithium-ion battery technologies (PV-wind-battery systems). Using a price-taker model with simulated hourly energy and capacity prices, we simulated the revenue-maximizing dispatch of a range of PV-wind-battery configurations across Texas, from the present through 2050. Holding PV capacity and point-of-interconnection capacity constant, we modeled configurations with varying wind-to-PV capacity ratios and battery-to-PV capacity ratios. We found that coupling PV, wind, and battery technologies allows for more effective utilization of interconnection capacity by increasing capacity factors to 60%–80%+ and capacity credits to close to 100%, depending on battery capacity. We also compared the energy and capacity values of PV-wind and PV-wind-battery systems to the corresponding stability coefficient metric, which describes the location-and configuration-specific complementarity of PV and wind resources. Our results show that the stability coefficient effectively predicts the configuration-location combinations in which a smaller battery component can provide comparable economic performance in a PV-wind-battery system (compared to a PV-battery system). These PV-wind-battery hybrids can help integrate more VRE by providing smoother, more predictable generation and greater flexibility.
... The inputs of the hydropower model are hourly inflows of corresponding reservoirs and hourly energy prices. We obtained inflow data from the United States Geological Survey's National Water Information System, and future energy prices from Seel et al. (2018), which predicts hourly energy prices based on historical prices. These values consider the increasing penetrations of variable renewable energy, and show a pattern similar to those reported by the California Independent System Operator (Guo et al., 2021). ...
Forest restoration through mechanical thinning, prescribed burning, and other management actions is vital to improving forest resilience to fire and drought across the Western United States, and yields benefits that can be monetized, including improvements in water supply and hydropower. Using California's Sierra Nevada as a study area, we assess the water and energy benefits of forest-restoration projects. By using a scalable top-down approach to track annual evapotranspiration following forest disturbance, coupled with hydropower simulations that include energy-price information, and marginal prices for water sales, we project the potential economic benefits of hydropower and water sales accruing to water-rights holders. The results found that water-related benefits from strategically planned fuels-reduction treatments now being carried out can be sufficient to offset costs of management actions aimed at forest restoration, especially in the face of climate change. Our findings justified investments in restoring forests and reinforce the central role of water and hydropower providers in partnerships for management of source-water watersheds. Results also highlighted the importance of accurate, scalable data and tools from the hydrology and water-resources community.
... In addition, they find that that the revenue wind generators receive for constraining output has significant consequences on the resulting capacity mix. Seel et al. (2018) have used marginal costs to analyse wholesale price patterns in the four grid regions of the USA. Using a capacity expansion model to derive high VRE scenarios, they found a reduction in average annual prices throughout but differing average price patterns based on VRE mix and region. ...
With the decarbonisation of electricity generation, large scale heat pumps are becoming increasingly viable for district heating combined with thermal energy storage, district heating can provide flexibility to the electricity grid by decoupling demand from supply. This thesis examines how district heating with heat pumps and thermal energy storage can integrate with and provide a benefit to an electricity system with predominantly renewable generation. The scope of work comprises three interlinked models underpinned by the same set of meteorology data, fundamentally coupling supply and demand. First, heat load data are surveyed, and an hourly demand profile is simulated. Disaggregation of district heating loads from the national demand is accomplished via segmentation of the building stock to model heat demand at high spatiotemporal resolution. Second, a novel method of pricing hourly electricity in a zero carbon, capital-intensive renewable system with electricity storage is developed and applied to a dispatch simulation to generate hourly electricity prices. Third, a dynamic model of district heating is constructed to simulate the meeting of heat loads with different design configurations using electricity as the energy source. Model predictive control is applied with varying forecast horizons so as to minimise the cost of electricity to meet the heat demand given a time series of hourly prices and consequently optimising the capacity of thermal energy storage. It was found that a thermal energy storage capacity equivalent to 1.3% of annual demand is sufficient to minimise operating costs. Finally, the potential impact of district heating on balancing the electricity system is analysed and an equivalence between thermal and electric storage is examined. While this is highly dependent on annual conditions, it can be as much as 3.5 units of thermal storage for every unit of electrical grid storage on the system. This could potentially reduce the investment in grid storage by £36 billion, underlining the significant financial benefits of thermal storage to the whole system. The research highlights the important potential of district heating to the UK’s energy system strategy.
... The effect of renewables on wholesale price volatility has received less attention, and the evidence is mixed. Seel et al. (2018) report that increases in solar and wind penetration are associated with increases in wholesale price variability in US electricity markets. Woo et al. (2011) found that increased wind penetration in Texas correlates with increased price volatility. ...
The decarbonization strategy of the electricity sector relies on renewable energy. However, increasing renewables gives cannibalization and depredation effects. Cannibalization appears when increasing penetration of renewables undermines their own market remuneration. Depredation arises when increased renewable penetration undermines the market remuneration of other technologies. This paper documents cannibalization and depredation effects in the Spanish electricity market from 2014 to 2020. Increases in wind and solar penetration reduce market remuneration of all technologies. With wind, depredation and cannibalization effects are non-linear. Higher solar and wind penetration reduces remuneration volatility to wind, solar, and gas but increases those of coal and nuclear.
... However, transitioning to this model will not be seamless. Increasing distributed solar generation in California has been shown to outstrip demand on sunny days, causing disruptive market fluctuations that disincentivize further renewable generation and, in some cases, could increase the demand for less sustainable sources of energy (California ISO, 2016;Seel, Mills, and Wiser, 2018). A fully renewable, consolidated grid will need scalable, excessive generation capacity and/or significant storage capability (ACEEE, 2019). ...
Affordable, energy efficient, and healthy housing is a key component of individual, community, and planetary resilience and is increasingly scarce in both rural and urban regions on the West Coast of the US and many other locations globally. To address this issue, we assembled a diverse team including designers, manufacturers, researchers, economic and legal experts, community organizers, and students from many fields to develop complementary systems for modular, affordable housing and supportive site enhancements. By pursuing an 'open-source' design process, our research and concepts are shared freely to engage and welcome input from a broad spectrum of perspectives. Our goal is to leverage disruptive new technologies like mass-timber panelized digital manufacturing, distributed energy production/storage, and water reclamation micro-grids to support systems-based approaches to creating affordable housing and resilient communities. Our flexible modular solution is rapidly deployable, reconfigurable, and relocatable. It includes on-board photovoltaic arrays and battery storage and can be positioned as a standalone accessory dwelling unit or as a cluster community. We propose service-based and on-site approaches to water and waste treatment in response to different configurations and contexts. Each unit provides much-needed housing while reinforcing the local utility grid and providing essential services during grid-disrupting events. This paper documents initial results of ongoing research, financial and sociopolitical implementation plans, and site improvement and modular housing system concepts. Moreover, we invite the ACEEE community to contribute their expertise as part of open source knowledge network.
... The electrolyzer capacity factor is deeply influenced by the shape of the cumulative electricity price duration curve which depends on different factors such as the location, the penetration of renewable energy sources (RES), the type of RES technology, the price of the fuel and the technology of fossil fuel power plants and the type of final user [59][60][61][62]. The general expected tendency is that by increasing the penetration of intermittent RES, the average electricity prices tend to reduce but the peak prices and the cost of grid balancing tend to increase. ...
This paper assesses the optimal design criteria of a flexible power and biomass to methanol (PBtM) plant, conceived to operate both without green hydrogen addition (baseline mode) and with hydrogen addition (enhanced mode), following an intermittent use of the electrolysis system, which is turned on when the electricity price allows an economically viable hydrogen production. The assessed plant includes a gasification section, syngas cleaning and compression, methanol synthesis and purification and heat recovery steam cycle, to be flexibly operated. A sorption-enhanced gasification technology allows to produce a tailored syngas for the downstream synthesis in both the baseline and enhanced operating conditions, by controlling the in-situ CO2 separation rate. Two designs are assessed for the methanol synthesis unit, with two different reactor sizes: (i) a larger reactor, designed on the enhanced operation mode (enhanced reactor design – ERD) and (ii) a smaller reactor, designed on the baseline operation mode (baseline reactor design – BRD). The ERD design resulted to be preferable from the techno economic perspectives, resulting in 20% lower cost of the e-MeOH (30.80 vs. 37.76 €/GJLHV) with the baseline assumptions (i.e. 80% of electrolyzer capacity factor and 2019 Denmark day-ahead market electricity price). Other important outcomes are: (i) high electrolysis capacity factor is needed to obtain competitive cost of e-MeOH and (ii) advantages of flexibly operated PBtM plants with respect to inflexible PBtM plants are significant in scenarios with high penetration of intermittent renewables, leading to low average prices of electricity but also longer periods of high peak prices.
