Browsing by Subject "Wholesale Electricity Market"
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Item Open Access A Guide to Inform Institutions about Participation in PJM’s Demand Response Programs(2013-04-21) Aldina, Robin; Soden, JohnIncreasing reliability concerns over the last decade have led stakeholders within the Energy Industry to place a great deal of attention on the management of electricity load. Traditionally, consumers have been shielded from the price signals that indicated high stress on the electricity grid, but through a process known as Demand Response (DR), customers are now being offered incentives to actively manage their load for increased reliability. Attention on DR has grown with its profusion into electricity markets; at both the wholesale and retail levels. Focusing on institutional customers and DR programs within the PJM wholesale electricity market, this study provides a comprehensive resource to answer questions associated with (1) the regulatory structure of PJM’s markets for DR and (2) the possible benefits that can result from market participation. As a first step in addressing these objectives, this report first provides an analysis of the current publically available information, and establishes that there is no single resource that provides sufficient information to resolve all the questions an institution may have. This report then offers clear and concise content by which institutional customers can assess the framework of PJM’s DR programs. Further, a tool for estimating the potential revenue available from participation in the capacity auction was created to help institutions understand the profitability of engaging in the capacity market. Finally, this report concludes that while participation in PJM’s demand response programs is a complicated undertaking, there are a wide variety of options available to meet the unique needs of individual customers, as well as significant financial incentives.Item Open Access Evaluating the Effect of Intermittent Renewables on the Wholesale Electricity Market in Germany(2014-04-24) Adelfio, AndrewFor years, Germany has been a pioneer in the aggressive build out of intermittent renewables (solar and wind). The Energy Concept launched in 2010, in conjunction with previously established federal energy policies, has further enhanced Germany’s ability to reach lofty renewable generation targets via ratepayer surcharges that support feed-in tariffs. However, as the penetration of renewables has increased, wholesale electricity prices have demonstrated a steady decline. Through statistical and market-based analysis, this project 1) quantifies the price decrease that is caused by build out of renewables, 2) examines the market mechanics that result in a price decrease, and 3) evaluates the effect of the price decrease on relevant electricity market participants. Regression analysis indicates that average wholesale electricity prices will experience a decrease of 6.5 €/MWh – 8.5 €/MWh by 2020, solely due to the build out of renewable energy to comply with Energy Concept targets. Based on current electricity demand, this price reduction will result in an annual revenue loss of €2.96 billion – €3.88 billion. Importantly, this revenue loss will not be distributed equally amongst wholesale generators. Generators with higher marginal costs will be affected disproportionately because the frequency with which they can be dispatched profitably will decrease more than for cheaper generators. Specifically, this will hurt natural gas plants, many of which will be phased out due to unfavorable economics. This loss of natural gas plants will 1) present challenges to the grid’s ability to maintain stability while introducing more intermittent renewables and 2) force Germany to remain reliant on carbon-rich coal for electricity. The findings of this study are then applied to other locations that are also pursuing aggressive renewable energy targets.