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The Future Ain't What It Used to Be: What Variable Renewables Mean for Conventional Generation NY Association for Energy Economics August 23, 2012. Benjamin F. Hobbs Schad Professor of Environmental Management, Whiting School of Engineering
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The Future Ain't What It Used to Be: What Variable Renewables Mean for Conventional GenerationNY Association for Energy EconomicsAugust 23, 2012
Benjamin F. Hobbs
Schad Professor of Environmental Management, Whiting School of Engineering
Director, Environment, Energy, Sustainability & Health Institute (E2SHI)
The Johns Hopkins University
Chair, Market Surveillance Committee
California Independent System Operator
Source: Kay, 2011
29 states,+ Washington DC and 2 territories,have Renewable Portfolio Standards
(8 states and 2 territories have renewable portfolio goals).
Source; DSIRE, NCSU, www.dsireusa.org/summarymaps
II. The Challenge of Variability:Dispatch Conventional Gen to Net LoadM. Rothleder, CAISO, Operational Flexibility Study Update, 6/22/2012 Market Surv. Comm. Mtg.
Load, Wind & Solar Profiles – High Load Case, Jan. 2020
6,300 MW in 2 hours
13,500 MW in 2 hours
8,000 MW in 2 hours
Load & Net Load (MW)
Wind & Solar (MW)
Example of Fundamental vs. Proxy Goals: Absolute Priority for Wind in Dispatch Makes No Economic or Environmental Sense
What’s Happened to Prices? South Australia: 17% Wind Cutler, Boerema, MacGill & Outhred, Energy Policy, 2011; I. MacGill, IEEE PES Mtg, 7/2012
Load (MW) Duration
Price ($/MW) Duration
Gas weekly MW generation
Spring Energy Price Distribution
2012 Base Case
20% RPS 2.5% Lower Prices
20% Wind Case
Price Duration Curve for 1275 and 8000 MW Wind Capacity
Net Load, MW
Avg. Price Received
Fast 0 0 400 0 MW
Slow 1000 1000 1600 2000 MW
Wind 600 500 200 100 MW
LMP: 30 -107030 $/MWh
Spot prices reward flexibility!
III. What do those Prices Imply for Long Run Generation Mix? The WECC CaseJ. Bushnell, “Building Blocks: Investment in Renewable & Nonrenewable Technologies,” Iowa State U, 2010
Baseload CC Peakers
What do those Prices Imply for Long Run Generation Mix? The UK Case (15% Wind)R. Green & N. Vasilakos, Imperial College, The Long-Term Impact of Wind Power on Electricity Prices and Generating Capacity
CAISO: 33% Wind in 2020 Potentially 4,600MW of Upward Flexible Resources Needed (Hi-Load Scenario) M. Rothleder, CAISO, Operational Flexibility Study Update, 6/22/2012 Market Surveillance Comm. Mtg.
Announced intent to retire new (2001) CC Plant (Sutter)
Spot Market Failures:
Markets suppress price variability Flexibility not rewarded
5-15-60 minute averaging times
Risk disregarded in scheduling
Public/operator distaste for price spikes
Bid & price caps
Operational market fixes
Ramp constraints/products in spot markets
CAISO: Twice as costly as spin in Q2 2012
Stochastic unit commitment/dispatch?
Capacity market fixes
Different flavors of capacity
Longer horizon & liquid capacity market
S. Harvey, S. Pope, W. Hogan, Preliminary Evaluation of the New York ISO Capacity Market, New York ISO ICAP Working Group, 7/31/2012
PJM Capacity Market (RPM): Eliciting Capacity Investment from Surprising SourcesBrattle, Second Performance Assessment of PJM’s Reliability Pricing Model Market Results 2007/08 through 2014/15, Aug.2011
enough capacity …..
…At prices lower
PJM RPM: Surprising Capacity SourcesBrattle, Second Performance Assessment of PJM’s Reliability Pricing Model Market Results 2007/08 through 2014/15, Aug.2011
E2SHI, The Johns Hopkins University