Browsing by Subject "Electricity markets"
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Item Open Access Bridging the Retail-Wholesale Divide In Electricity Markets: The Economics of Distributed Energy Resources(2015-04-24) Avent, Clayton; Chow, Dan; Lloyd, Matt; Seidenfeld, Josh; Tomovich, UroshIncreasing penetration of distributed energy resources (DERs) impacts electric grid operations and utility revenue requirements. Existing retail rate tariffs for commercial customers do not align with utilities’ wholesale market purchases of energy, ancillary services, and capacity guarantees, nor do they efficiently convey resource scarcity to customers to alter their consumption and DER deployment decisions. This report seeks to understand the effects that real time pricing has on electricity costs and incentives for DER deployment for small commercial building owners. Our analysis uses historical load data from multiple commercial building types throughout New Jersey to (i) evaluate the relationship between locational marginal prices (LMPs) and consumptive patterns, and (ii) explore the potential benefit of new electrical rate structures with increased granularity in the temporal and geographic dimensions. This assessment of potential savings for customers and utilities can be used to inform future rate design. Our key findings are as follows: (1) retail rates based on LMPs can benefit both distribution utilities and their customers; (2) any new rate introduced must be optional, as varying load attributes at specific sites result in very different experiences under these rates (i.e., almost half of subject sites are worse off); (3) utilities can reduce risk by implementing a retail rate with a real-time price signal.Item Open Access Comprehensive Evaluation of European Renewable Power Programs(2016-04-26) Buczek, Kate; Han, Siqi; Umarje, TanviEurope has shown a commitment to goal setting that mitigates climate change and increases renewable energy generation since the early 2000s. Germany, Spain, and the United Kingdom have experienced challenges throughout the process toward a renewable energy future. The level that market structure, policy impacts, country economics, technology status, and social impacts contribute to successful renewable energy integration with the traditional power market structure for Germany, Spain, and the UK will provide an evaluation framework for other countries looking to incorporate greater levels of renewable energy in the grid. Primary lessons learned from the electricity systems in these three countries show that flawed policy design creates market uncertainty and instability, subsidies may create more generation at increased costs, grid flexibility is necessary to integrate higher capacities of renewable energy resources, business models in the electricity sector should be transformed by changing trends to account for reduced conventional energy and focus on innovation, and market mechanism design needs to capture wholesale energy prices to meet capacity.Item Open Access FERC Order 841: Analysis of Actions by Wholesale Market Operators to Incorporate Energy Storage(2020-04-24) Chandra, Arunika; Cui, Quentin; Gupta, Udit; Ranjan, AmitEnergy storage resources (ESRs) provide a host of services to the electric power grid through applications such as energy arbitrage and the storage of variable wind and solar energy. As ESR applications continue to develop, federal and state regulations oversee the growing participation of ESRs in the grid. FERC released Order 841 in 2018 with the goal of ensuring equal access to the wholesale electric power markets for ESRs. Order 841 applies to six RTO/ISOs: MISO, SPP, NYISO, ISO-NE, CAISO, and PJM. Because this order was recently released, there is an absence of in-depth research on the rule changes submitted by these ISO/RTOs. These rule changes will be implemented by 2021, and hence it is important and timely to understand their impact on ESRs. This report analyzes important market rule changes and their potential impact on ESR participation. Reviewing the tariff filings, we broke down each ISO/RTO into sub-markets (ancillary services, capacity, and energy) and assessed parameters in each sub-market based on their Order 841 compliance and impact on ESRs. Then, we generated market maturity models that demonstrate each ISO/RTO’s ESR status relative to each other on a scale of “Basic”, “Intermediate”, and “Advanced”. Finally, we applied the results of our analysis to case studies to predict the impact of Order 841 on existing ESR projects. We discovered that, generally, ESR projects can more easily participate in the sub-markets of CAISO and PJM, while SPP and ISO-NE present some barriers to participation. However, these barriers are not wholly prohibitive as the less developed wholesale markets present greater potential for ESR growth. From a high-level perspective, Order 841 grants easier access to the wholesale sub-markets for ESRs, unlocks opportunities for value stacking, and lowers risk for new market entrants by providing clearer market rules. For stakeholders such as utilities and storage developers, our study provides a valuable first step to assessing the relative suitability of ISO/RTOs for ESR development and participation. These stakeholders should pair our market maturity models and case studies with more distinct quantitative modeling and rigorous examination of sub-federal ESR policies and incentives to fully assess the wholesale power markets for energy storage development.