Electricity Price Distributions in Future Renewables-Dominant Power Grids and Policy Implications PDF Download
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Author: Dharik S. Mallapragada
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Future electricity systems with tight constraints on carbon emissions will rely much more on wind and solar generation, with zero marginal cost, than today. We use capacity expansion modelling of Texas in 2050 to illustrate wholesale price distributions in future energy-only, carbon-constrained grids without price caps under a range of technology/system assumptions. Tightening carbon emissions constraints dramatically increases the frequency of very low prices. The frequency of high prices also increases, and all resources earn the bulk of their energy market revenues in relatively few hours. The presence of demand response, long-duration energy storage, dispatchable low-carbon generation, or a robust market for hydrogen for non-electricity use (and for energy storage) weakens but does not undo these results. Financial instruments to hedge price volatility will consequently be more costly and it is likely that we will need to redesign capacity remuneration mechanisms to provide adequate incentives for optimal investment in VRE generation and, particularly, storage. In order to encourage economy-wide electrification, the marginal retail price of electricity should be low whenever the wholesale price is low. With automated control of demand via demand response contracts, the risks of price volatility faced by retail customers can be mitigated without sacrificing efficiency. To encourage economy-wide electrification, the marginal retail price of electricity should be low when the wholesale spot price is low. We discuss ways of reducing consumers' risk in this world while providing adequate investment incentives.
Author: Dharik S. Mallapragada
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Future electricity systems with tight constraints on carbon emissions will rely much more on wind and solar generation, with zero marginal cost, than today. We use capacity expansion modelling of Texas in 2050 to illustrate wholesale price distributions in future energy-only, carbon-constrained grids without price caps under a range of technology/system assumptions. Tightening carbon emissions constraints dramatically increases the frequency of very low prices. The frequency of high prices also increases, and all resources earn the bulk of their energy market revenues in relatively few hours. The presence of demand response, long-duration energy storage, dispatchable low-carbon generation, or a robust market for hydrogen for non-electricity use (and for energy storage) weakens but does not undo these results. Financial instruments to hedge price volatility will consequently be more costly and it is likely that we will need to redesign capacity remuneration mechanisms to provide adequate incentives for optimal investment in VRE generation and, particularly, storage. In order to encourage economy-wide electrification, the marginal retail price of electricity should be low whenever the wholesale price is low. With automated control of demand via demand response contracts, the risks of price volatility faced by retail customers can be mitigated without sacrificing efficiency. To encourage economy-wide electrification, the marginal retail price of electricity should be low when the wholesale spot price is low. We discuss ways of reducing consumers' risk in this world while providing adequate investment incentives.
Author:
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Author: Darryl R. Biggar
Publisher: John Wiley & Sons
ISBN: 1118775724
Category : Science
Languages : en
Pages : 493
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Book Description
Bridges the knowledge gap between engineering and economics in a complex and evolving deregulated electricity industry, enabling readers to understand, operate, plan and design a modern power system With an accessible and progressive style written in straight-forward language, this book covers everything an engineer or economist needs to know to understand, operate within, plan and design an effective liberalized electricity industry, thus serving as both a useful teaching text and a valuable reference. The book focuses on principles and theory which are independent of any one market design. It outlines where the theory is not implemented in practice, perhaps due to other over-riding concerns. The book covers the basic modelling of electricity markets, including the impact of uncertainty (an integral part of generation investment decisions and transmission cost-benefit analysis). It draws out the parallels to the Nordpool market (an important point of reference for Europe). Written from the perspective of the policy-maker, the first part provides the introductory background knowledge required. This includes an understanding of basic economics concepts such as supply and demand, monopoly, market power and marginal cost. The second part of the book asks how a set of generation, load, and transmission resources should be efficiently operated, and the third part focuses on the generation investment decision. Part 4 addresses the question of the management of risk and Part 5 discusses the question of market power. Any power system must be operated at all times in a manner which can accommodate the next potential contingency. This demands responses by generators and loads on a very short timeframe. Part 6 of the book addresses the question of dispatch in the very short run, introducing the distinction between preventive and corrective actions and why preventive actions are sometimes required. The seventh part deals with pricing issues that arise under a regionally-priced market, such as the Australian NEM. This section introduces the notion of regions and interconnectors and how to formulate constraints for the correct pricing outcomes (the issue of "constraint orientation"). Part 8 addresses the fundamental and difficult issue of efficient transmission investment, and finally Part 9 covers issues that arise in the retail market. Bridges the gap between engineering and economics in electricity, covering both the economics and engineering knowledge needed to accurately understand, plan and develop the electricity market Comprehensive coverage of all the key topics in the economics of electricity markets Covers the latest research and policy issues as well as description of the fundamental concepts and principles that can be applied across all markets globally Numerous worked examples and end-of-chapter problems Companion website holding solutions to problems set out in the book, also the relevant simulation (GAMS) codes
Author: Michael E. Birk
Publisher:
ISBN:
Category :
Languages : en
Pages : 73
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Book Description
Distributed energy resources (DERs) are projected to be significant components of the modern power grid, active players in electricity markets and salient tools used in the operation of electric grids. The objective of this thesis is to determine the impact distributed energy resources have on power grids and markets. This research investigates, models, and quantifies the influence of DERs on prices of electricity, networks and environmental effects. There is an evolving role between distribution and transmission system operations. Quantitative modeling and a qualitative literature, industry and regulatory review were utilized to determine the impact that DERs have on market prices, grid operations and the environment of the future. Distributed energy resources will impact the electric grid: from market economics to grid operations and reliability to coordination, and regulations. Firstly, from the European Union to the United States, power systems across the world are transforming to include and integrate larger penetrations of decentralized resources, while maintaining or increasing efficiency and operational reliability. Secondly, distributed energy resources have a quantifiable impact on short-term wholesale pricing of electricity (LMPs). Thirdly, distribution locational marginal prices (DLMPs) have been approximated, using a direct current optimal power flow, and yield insight into the revenues, prices, emissions and other bulk power system impacts at the interface between real-world transmission and distribution electricity networks. Lastly, the impact and to whom, whether costly or beneficial, that distributed energy resources have in markets and society, depends on the location in which they are interconnected.
Author: Matthew J. Kotchen
Publisher: University of Chicago Press
ISBN: 0226821749
Category : Business & Economics
Languages : en
Pages : 275
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Book Description
This volume presents six new papers on environmental and energy economics and policy in the United States. Rebecca Davis, J. Scott Holladay, and Charles Sims analyze recent trends in and forecasts of coal-fired power plant retirements with and without new climate policy. Severin Borenstein and James Bushnell examine the efficiency of pricing for electricity, natural gas, and gasoline. James Archsmith, Erich Muehlegger, and David Rapson provide a prospective analysis of future pathways for electric vehicle adoption. Kenneth Gillingham considers the consequences of such pathways for the design of fuel vehicle economy standards. Frank Wolak investigates the long-term resource adequacy in wholesale electricity markets with significant intermittent renewables. Finally, Barbara Annicchiarico, Stefano Carattini, Carolyn Fischer, and Garth Heutel review the state of research on the interactions between business cycles and environmental policy.
Author: Naga Srujana Goteti
Publisher:
ISBN:
Category : Energy storage
Languages : en
Pages : 113
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Book Description
"The electricity sector contributes to a quarter of global greenhouse emissions, and managing its evolution is a critical sustainability challenge. The context for the development and operation of electricity grids has dramatically changed in recent years. Wind and solar power have become much less expensive. Lower costs combined with increased policy action to address carbon emissions is leading to substantial shares of electricity generated by intermittent renewables. Maintaining a stable electricity supply with intermittency is a critical challenge; storage and natural gas are possible solutions. While policymakers promote storage as green grid technology, low-cost natural gas from hydrofracturing extraction raises the economic hurdle for storage. Researchers have developed complicated energy system models to help plan grids in the face of the above trends. The research in this dissertation introduces new modeling features that affect the economic and environmental outcomes of the adoption of renewable and storage technologies. First, prior models that explore the future build-out of electricity grids are nearly always deterministic, i.e., they assume that decision-makers have perfect information. Here a stochastic optimization grid expansion model is developed that presumes that expected future fluctuations, e.g. in fuel prices, influence build-out decisions. This stochastic model thus includes uncertainty and risk as core elements: Grid build-out depends on the distribution of system costs. A genetic algorithm with Monte-Carlo simulation is used for co-optimization using two objective functions: "risk-neutral," which optimizes to minimize average system cost and "risk-averse," which optimizes to minimize average of the top 5% of costs (also called 95% Conditional Value at Risk (CVaR)). This model is tested for the US Midwest regional grid. The results show that the risk-averse scenario does not increase mean system costs but adds significantly more wind. These results corroborate prior work showing that electricity system costs can be surprisingly inelastic to renewable adoption and further introduces quantification of how increased renewables lowers cost risk. Second, the economic and environmental performance of storage is complicated by how its introduction affects the operation of both renewable and fossil plants. In this dissertation, a model is developed that accounts for how storage operation would affect prices on the grid and in turn, the operational schedule that yields optimal revenue. Results from modeling the US Midwest region shows that this treatment of storage as a "price maker" affects results. The model indicates that storage increases carbon emissions when it enables a high emissions generator, such as a coal plant, to substitute for a cleaner plant, such as natural gas. In this case, low cost; efficient natural gas generation is relatively better than coal to realize emissions reductions with storage under economic arbitrage until renewables dominate the grid mix. Third, the operational strategies of energy storage alter the generation and profits of the other electricity generation systems. The operational effects of storage on the change in generation is investigated for all the eGRID subregions across the US based on actual historical electricity prices and the generation mix for the year 2016. Results show that storage increases the coal generation and affects the natural gas generation in the west - except in California and the Midwest regions of the US; and increases the generation of the natural gas in the eastern US regions. California, upstate New York and New England regions show an exception with an increase in natural gas generation and decrease in coal generation. The model also investigates the operational effects of storage on the profits of other generating units in California, Midwest and New York regions. Profits of other generating units are significantly affected when large capacities of storage operate as price-makers. Coal has a small increase in profits by 2% and all the other fuels continue to see a decline in profits in New York and the Midwest regions. The decrease in profits of the other generating units is because of the offset/retirements of the peaker natural gas plants that set the electricity prices. On the other hand, in California, the profits for renewables increase from the increase in electricity clearing prices set by the natural gas combined cycle plants to meet the additional demand from the storage charging."--Abstract.
Author: International Renewable Energy Agency IRENA
Publisher: International Renewable Energy Agency (IRENA)
ISBN: 9292601989
Category : Technology & Engineering
Languages : en
Pages : 145
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Book Description
This study presents options to fully unlock the world’s vast solar PV potential over the period until 2050. It builds on IRENA’s global roadmap to scale up renewables and meet climate goals.
Author: International Renewable Energy Agency IRENA
Publisher: International Renewable Energy Agency (IRENA)
ISBN: 9292602500
Category : Technology & Engineering
Languages : en
Pages : 344
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Book Description
This outlook highlights climate-safe investment options until 2050, policies for transition and specific regional challenges. It also explores options to eventually cut emissions to zero.
Author: Chinese Academy of Engineering
Publisher: National Academies Press
ISBN: 0309160006
Category : Science
Languages : en
Pages : 256
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Book Description
The United States and China are the world's top two energy consumers and, as of 2010, the two largest economies. Consequently, they have a decisive role to play in the world's clean energy future. Both countries are also motivated by related goals, namely diversified energy portfolios, job creation, energy security, and pollution reduction, making renewable energy development an important strategy with wide-ranging implications. Given the size of their energy markets, any substantial progress the two countries make in advancing use of renewable energy will provide global benefits, in terms of enhanced technological understanding, reduced costs through expanded deployment, and reduced greenhouse gas (GHG) emissions relative to conventional generation from fossil fuels. Within this context, the U.S. National Academies, in collaboration with the Chinese Academy of Sciences (CAS) and Chinese Academy of Engineering (CAE), reviewed renewable energy development and deployment in the two countries, to highlight prospects for collaboration across the research to deployment chain and to suggest strategies which would promote more rapid and economical attainment of renewable energy goals. Main findings and concerning renewable resource assessments, technology development, environmental impacts, market infrastructure, among others, are presented. Specific recommendations have been limited to those judged to be most likely to accelerate the pace of deployment, increase cost-competitiveness, or shape the future market for renewable energy. The recommendations presented here are also pragmatic and achievable.
Author: International Renewable Energy Agency IRENA
Publisher: International Renewable Energy Agency (IRENA)
ISBN: 9292601970
Category : Technology & Engineering
Languages : en
Pages : 161
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Book Description
This study presents options to speed up the deployment of wind power, both onshore and offshore, until 2050. It builds on IRENA’s global roadmap to scale up renewables and meet climate goals.
