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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
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