Impacts of Variable Renewable Energy on Bulk Power System Assets, Pricing, and Costs

Wiser, Ryan; Mills, Andrew; Seel, Joachim; Levin, Todd; Botterud, Audun

doi:10.2172/1411668

Cited by 62 publications

(85 citation statements)

References 99 publications

(186 reference statements)

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“…For example, the economic value of offshore wind production along the East Coast of the United States varies with time and space, driven by electricity pricing and production fluctuations (Mills et al 2018). The value of offshore wind to a broader energy portfolio (including both renewable and non-renewable sources) is driven by both the seasonal and daily variability in power production from wind and the other sources, as well as seasonal and daily variations in grid demand for power (Sinden 2007, Fripp and Wiser 2008, Wiser et al 2017. Alignment between production and demand over seasonal and daily time scales is thus critical for reliability and functionality of the grid system (Shaner et al 2018).…”

Section: Introductionmentioning

confidence: 99%

Spatial and temporal variation of offshore wind power and its value along the Central California Coast

Wang

Walter

White

et al. 2019

Environ. Res. Commun.

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The analysis of the spatiotemporal variability of wind power remains limited during the planning stage of an offshore wind farm. This study provides a framework to investigate how offshore wind power varies along the Central California Coast over diurnal and seasonal time scales, which is critical for reliability and functionality of the grid system. We find that offshore wind power in this region peaks during evening hours across all seasons and maximizes in spring and summer. The timing of peak offshore wind power production better aligns with that of peak demand across California than solar and land-based wind power production, highlighting its potential to fill the supply gap when demand is high and power production from other renewable energy sources is low. We further assess the value of offshore wind power using demand-based and wholesale market metrics. Both metrics indicate high potential value of offshore wind power over most areas in this region. Finally, we show that the estimate of power production is significantly biased when using mean wind speeds that do not account for temporal variability, leading to potentially inaccurate predictions about locations that are expected to produce the most power. These results reiterate the importance in considering spatiotemporal variability in wind power for accurately calculating the value of offshore wind development.

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Section: Introductionmentioning

confidence: 99%

Spatial and temporal variation of offshore wind power and its value along the Central California Coast

Wang

Walter

White

et al. 2019

Environ. Res. Commun.

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“…National Laboratory prepared a study [2] that focused on the degree to which growth in VRE has impacted wholesale power prices and bulk power system assets to date and how this may change in the future. Here we present our synthesis of available literature, data and analysis on the degree to which growth in VRE has influenced or might in the future impact wholesale markets and generating assets in the U.S.…”

Section: As Input Into the Doe Staff Report Lawrence Berkeley Nationmentioning

confidence: 99%

Impacts of variable renewable energy on wholesale markets and generating assets in the United States: A review of expectations and evidence

Mills

Levin

Wiser

et al. 2020

Renewable and Sustainable Energy Reviews

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We synthesize available literature, data, and analysis on the degree to which growth in variable renewable energy (VRE) has impacted or might in the future impact bulk power system assets, pricing, and costs in the United States. Most studies of future scenarios indicate that VRE reduces wholesale energy prices and capacity factors of thermal generators. Traditional baseload generators are more exposed to these changing market conditions than low-capital cost and more flexible intermediate and peak-load generators. From analysis of historical data we find that VRE is already influencing the bulk power market through changes in temporal and geographic patterns areas with higher levels of VRE. The most significant observed impacts have concentrated in areas with significant VRE and/or nuclear generation along with limited transmission, with negative pricing also often occurring during periods with lower system-wide load. So far, however, VRE, has had a relatively modest impact on historical average annual wholesale prices across entire market regions, at least in comparison to other drivers. The reduction of natural gas prices is the primary contributor to the decline in wholesale prices since 2008. Similarly, VRE impacts on thermal plant retirements have been limited and there is little relationship between the location of recent retirements and VRE penetration levels. Although impacts on wholesale prices have been modest so far, impacts of VRE on the electricity market will be more significant under higher VRE penetrations. KEYWORDSVariable renewable energy; electricity markets; electricity prices; generator profitability 3 ABBREVIATIONS AS Ancillary services CAISO California Independent System Operator CCGT Combined cycle gas turbine CREZ Competitive Renewable Energy Zones CT Combustion turbine DOE

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“…Integral to the analysis is a framework for modeling renewables using a US-focused, long-term capacity planning model with detailed operations. The literature has demonstrated the importance of using models that capture the declining economic value of variable renewable energy at higher penetration levels (Hirth 2013, Blanford 2015, Gowrisankaran et al 2016, Bistline 2017, Wiser et al 2017. Figure 2 shows the economic intuition for how the equilibrium variable renewable share ('Share 1') jointly depends on the slopes of the marginal value curve ('Value') and marginal cost curve ('Cost 1'), which assumes that costs decline in deployment (Nordhaus 2014).…”

Section: Analytical Approachmentioning

confidence: 99%

“…wind and solar as penetration increases across a variety of conditions. Other studies have discussed the drivers and impacts of decreasing returns in observed and modeled systems(Hirth 2013, Blanford 2015, Gowrisankaran et al 2016, Bistline 2017, Wiser et al 2017, but this analysis underscores how dynamics like seasonal resource variability contribute to steep value declines with higher wind and solar shares, even with optimistic assumptions about the costs of backup resources with low utilization rates(Shaner et al 2018).…”

mentioning

confidence: 99%

Economic drivers of wind and solar penetration in the US

Bistline

Young

2019

Environ. Res. Lett.

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Much has been made of the potential for wind and solar generation to supply cheap, low-emissions electricity, but considerable disagreement exists as to which combinations of many potential drivers will enable deep penetration of these technologies. Most existing analyses consider limited factors in isolation, such as investment costs or energy storage, and do not provide rigorous support for understanding which combinations of factors could underpin a leading role for wind and solar. This study addresses this gap by undertaking a systematic sensitivity analysis using a state-of-the-art energy-economic model to comprehensively evaluate the relative magnitudes of five key drivers that may influence future wind and solar deployment in the United States. We find future wind and solar capital costs and carbon policy are the dominant factors, causing the average wind and solar share to vary by 38 and 31 percentage points, respectively. Transmission and storage availability have much smaller effects, causing the average share to vary by no more than 15 and 5 percentage points, respectively. No single factor unilaterally determines wind and solar deployment. The variable renewable share of electricity generation never reaches 100% nationally in any scenario even with lowcost storage, as decreasing marginal returns at higher deployments eventually outpace cost reductions. Average wind and solar shares and ranges of possible outcomes are higher in this study relative to recent multi-model comparison studies due to lower renewable costs and the potential for more stringent policies. Understanding drivers and barriers to renewable deployment has important ramifications for technology developers, infrastructure, market design, and policymakers, and this research provides insights as to which combinations of drivers lead to the greatest share of economic wind and solar deployment and why.

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Impacts of Variable Renewable Energy on Bulk Power System Assets, Pricing, and Costs

Cited by 62 publications

References 99 publications

Spatial and temporal variation of offshore wind power and its value along the Central California Coast

Spatial and temporal variation of offshore wind power and its value along the Central California Coast

Impacts of variable renewable energy on wholesale markets and generating assets in the United States: A review of expectations and evidence

Economic drivers of wind and solar penetration in the US

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