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Microreactor Economic Performance & Market Analysis

This presentation was prepared for the Microreactor Program Stakeholders Workshop on May 12-13, 2021. It supports understanding the market and economic potential for microreactors in the U.S. and internationally by providing: a techno-economic basis for support to industrial microreactor deployment and operation; uncovering emerging market opportunities, informing R&D opportunities, and integrating the research performed by the INL [Boise State/Energy Policy Institute], and the U Alaska Anchorage, U Wisconsin-Madison, and Nuclear Alternatives Project in Puerto Rico.

21 SPECIFIC NUCLEAR REACTORS AND ASSOCIATED PLANTS↗

Status and Trends in the Voluntary Market (2020 Data)

Green power refers to renewable electricity voluntarily purchased by retail electricity customers. Renewable energy sources for green power include solar, wind, biomass, geothermal, and small-scale hydropower. This report summarizes data on the various ways in which voluntary purchasers - including residential, commercial, and institutional customers - purchase green power. We summarize key historic trends in U.S. voluntary green power markets and the current status of green power sales through seven products: utility green pricing programs, utility renewable contracts, competitive suppliers, unbundled renewable energy certificates, community choice aggregations, and power purchase agreements. It includes discussion of how the voluntary market may impact the grid.

community choice aggregation↗

Status and Trends in the Voluntary Market (2021 Data)

Green power refers to renewable electricity voluntarily purchased by retail electricity customers. Renewable energy sources for green power include solar, wind, biomass, geothermal, and small-scale hydropower. This report summarizes data on the various ways in which voluntary purchasers including residential, commercial, and institutional customers purchase green power. We summarize key historic trends in U.S. voluntary green power markets and the current status of green power sales through seven products: utility green pricing programs, utility renewable contracts, competitive suppliers, unbundled renewable energy certificates, community choice aggregations, and power purchase agreements. It includes discussion of how the voluntary market may impact the grid.

ENERGY PLANNING, POLICY, AND ECONOMY↗

Changes in Hydropower Resource Operations Following Participation in the CAISO Energy Imbalance Market - A Case Study

Portland General Electric (PGE), an investor-owned electric utility serving nearly 900,000 customers in 51 Oregon cities, joined Western Energy Imbalance Market (EIM) – a California Independent System Operator (CAISO) platform for sharing cleaner and more efficient generation resources among multiple states in the Western U.S. While participation in EIM brings a new set of economic opportunities for PGE by capturing flexibility needs in the market, it also changes operational patterns (e.g., more frequent start/stop, off-nominal power output, and ramping) of PGE’s conventional generation fleet, including hydropower units. With 492 MW of hydropower capacity, which constitutes 15\% of PGE’s generation mix, it is important for PGE (as any other EIM-participant utility) to understand how participation in EIM impacts its hydropower assets, and how a techno-economically sustainable operation of those assets could be accomplished. In this paper, a case study is performed with PGE's hydropower generation facilities to assess and quantify EIM-participation driven changes in hydropower operational patterns.

hydropower, operational patterns, energy imbalance↗

An Integrated Framework for Effective Management of Delivery Risk in Electricity Markets: From Batteries to Insurance and Beyond

Net load imbalances due to imperfect day-ahead forecasts can cause variability in real-time electricity prices and higher system operations costs. We propose a novel market product called Flexibility Options that allow participants to hedge uncertainty by buying flexibility from flexible resources. Simulations show that flexibility options can reduce total system operating costs by up to 15% and can reduce variability in market participant revenues. To better quantify the flexibility that DER aggregators can provide, we develop DER flexibility scores that account for asset flexibility and uncertainty from occupant behavior and weather. Preliminary results show that realistic sets of DERs have significant variability in flexibility and uncertainty metrics.

delivery risk↗

Local Electricity Markets

This book provides a thorough, yet concise, review on the current status of LEM development all around the world, including the most promising research models and opportunities that are being proposed; an overview of the regulatory issues on the different Continents a discussion on the current infrastructure (both hardware and software) that is implemented and that is expected to facilitate the implementation and wide spread application of local energy markets (e.g., resulting from the investments already made in SG deployment); a review of current applications and practical implementations of LEMs; and a wrap-up and discussion on the most relevant paths for future research and development in this field of study.

day-ahead market, peer-to-peer, bilateral market, ↗

Improving sustainable tropical forest management with voluntary carbon markets

Due to a rapidly changing climate, voluntary carbon markets are gaining momentum and should be leveraged to improve and expand tropical sustainable forest management plans, limiting carbon emissions and enhancing critical carbon sinks. By sequestering more carbon than any other terrestrial ecosystem — ~1 Pg C yr –1 — tropical forests provide crucial natural climate solutions and opportunities in the evolving voluntary carbon market. Here, we argue that some issues with the current sustainable management of tropical forests can be addressed using carbon-focused sustainable forest management (SFM + C) to leverage financial resources for tropical forest carbon storage and sequestration. We suggest an extended harvest cycle in SFM + C and calculate an associated potential increase in aboveground carbon stocks of commercial timber of 1.26 Mg C ha –1 after each cycle in the Brazilian Amazon. The additional carbon storage due to a longer harvest cycle can generate carbon credits worth 152.6 (SD 9.2) US dollars per hectare in 40 years. Considering an average cost of 180 BRL per m3 of commercial timber delivered to the sawmill, an SFM + C plan with a 40-year cycle could generate 28.7% (SD 2.5) more profit than 35-year cycles by combining timber and carbon revenues. A robust carbon price could incentivize the further extension of harvest cycles, providing a monetary return that offsets the opportunity cost intrinsic to harvesting under longer cycles. Lastly, we highlight research needs to support tropical SFM + C, which can be part of a global collective effort to limit global warming to below 2 °C above pre-industrial levels.

54 ENVIRONMENTAL SCIENCES↗

A simple way to integrate distributed storage into a wholesale electricity market

Abstract Current plans to decarbonize the electric supply system imply that the generation from wind and solar sources will grow substantially. This growth will increase the uncertainty of system operations due to the inherent variability of these renewable sources, and as a result, more reserve capacity will be required to provide the ramping (flexibility) needed for reliable operations. This paper assumes that all of the increased uncertainty comes from wind farms on the grid, and it shows how distributed storage managed locally by aggregators can provide the ramping needed without introducing a separate market for flexibility. This can be accomplished when the aggregators minimize the expected daily cost of the energy purchased from the grid for their customers by submitting optimal bids into the wholesale market with high and low price thresholds for discharging and charging the storage. This model is illustrated using a stochastic multi-period security constrained optimal power flow together with realistic data for a reduction of the network in the Northeast Power Coordinating Council region of the United States. The results show that the bidding strategy for distributed storage provides ramping to the grid just as effectively as storage managed by a system operator.

Lamadrid, Alberto J.↗

The value of concentrating solar power in ancillary services markets

Ancillary services, such as spinning reserves, can provide grid reliability and contribute to profitability of an energy resource. We exercise an existing dispatch optimization model to estimate the profitability of a concentrating solar power plant by incorporating the sale of spinning reserves in the ancillary service market using the National Renewable Energy Laboratory's System Advisor Model to simulate operations within a 72-h rolling horizon framework. Assuming a price-taker approach with day-ahead energy and spinning reserve prices from both the California Independent System Operator and the Electricity Reliability Council of Texas, we find that selling spinning reserves in addition to electric energy increases plant profitability by up to 7% with perfect knowledge of day-ahead pricing and solar resource availability. Here, this finding suggests that spinning reserve markets provide significant value streams to concentrating solar power plants that can leverage thermal energy storage to offer reliable production in the short-to-medium term.

14 SOLAR ENERGY↗

The impacts of COVID-19 on clean energy labor markets: Evidence from multifaceted analysis of public health interventions and COVID-health factors

COVID-19 pandemic has affected clean energy labor market. Using real-time job vacancy data, this study analyzes the impacts of the pandemic on the U.S. clean energy labor market in 2020, including biomass, energy efficiency (EE), electric vehicle (EV), power/microgrid, solar, and wind industries. This study identifies how COVID-health factors and public health interventions influence clean energy job availability during the early COVID pandemic. Overall, California had the most energy jobs and experienced a significant decrease in April 2020. EV and solar had the highest percentages of job vacancies during the pandemic in general. Still, lockdowns had the most severe influence on EE and wind jobs. Stay-at-home orders negatively affected clean energy job vacancies in biomass, EV, power/microgrid, and wind. Social-gathering restrictions, however, did not have much influence. Increased COVID tests at the state level had the strongest and most positive influence on clean energy job postings, indicating the importance of a state's ability to manage public health infrastructure or crisis issues. COVID hospitalizations negatively influenced the job vacancies in biomass and wind but did not affect the other four sectors; conversely, as COVID death numbers increased, the number of jobs in biomass, EV, power grid, solar, and wind decreased, but not in EE jobs.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

Intervening alcohol marketing to reduce harmful alcohol use and lessons learned from the theory of changes: Case studies in Thailand

Objectives Globally, the burden of disease caused by alcohol use has been steadily increasing, including in Thailand. In this study, we aim to test the effectiveness of Anderson et al.‘s suggested three approaches to change the collective social norms, which comprise of: (1) providing information and an understanding about alcohol use behaviour, its causes and distribution; (2) focusing strategies on groups rather than individuals; and (3) strengthening supportive laws, regulations and approaches. Study design We employed a mixed-methods approach. Evidence was gathered from literature review and in-depth interviews with key individuals who are responsible for community-based interventions to alcohol marketing strategies in Thailand. Methods We chose to focus on two case studies in Nan and Surin provinces, where hospital-based longitudinal data (8 years) were available. Changes in casualties related to the harmful use of alcohol, resulting from interactions between community-based interventions and alcohol marketing during the time of annual festivals were investigated. We employed the theory of change (ToC) defined by Vogel to guide the data collection and analysis. We reviewed literature from online databases and grey literature to generate causal-loop diagrams. Results We created a causal-loop diagram to describe the complexity of harmful alcohol use, its related factors, context, interventions and outcomes. Over the decade between 2006 and 2015, community-based strategies led to a substantial reduction of casualties (initially a 50% reduction, rising to an 80–90% reduction by the end of the study period) during the time of the festivals. Conclusions The reduction in injuries and fatalities could be a result of the concerted actions, including legal sanctions of alcohol beverage sales and advertisement, and public education to raise awareness and impart knowledge of the harmful use of alcohol. The actions were organised by a coalition of civil society, health professionals, public authorities and community leaders using hospital-based data on the adverse effects of harmful alcohol use to mobilise political support at the provincial level. The availability of long-term financial support as a catalytic source of funds and the presence of a comprehensive alcohol control act enabled framing and mobilisation of local resources and political support.

60 APPLIED LIFE SCIENCES↗

Managing weather- and market price-related financial risks in algal biofuel production

Large-scale algae production has garnered interest due to its potential as a biofuel feedstock. Previous research assessing the profitability of algae products has been mostly based on values averaged over time, but algae production and resulting financial returns exhibit significant variability due to weather and fluctuations in selling prices for algae-based products. In other sectors, producers often reduce weather- and market price-related financial risk with financial instruments such as insurance, but little research has been performed on the design of insurance products to protect algae producers. Furthermore, this study develops a novel index-based insurance instrument that pays-out during unfavorable weather and market conditions, then explores the instrument's effectiveness, combined with a cash reserve, in reducing revenue stream variability for an algae producer. Results indicate that a biophysically based index-insurance product tailored to the specific financial risks in algae production can reduce variability in net revenues and can do so at a lower cost than relying solely on cash reserves, the most common financial risk management tool. Assessing the performance of index-insurance in algae production is particularly timely given the passage of the 2018 Farm Bill, which newly opens opportunities for the USDA to provide crop insurance to algae producers.

09 BIOMASS FUELS↗

The Effects of Climate Change on Interregional Electricity Market Dynamics on the U.S. West Coast

The United States (U.S.) West Coast power system is strongly influenced by variability and extremes in air temperatures (which drive electricity demand) and streamflows (which constrain hydropower production). As hydroclimate changes across the West Coast, a combination of forces may work in tandem to make its bulk power system more vulnerable to physical reliability issues and market price shocks. In particular, a warmer climate is expected to increase summer cooling (electricity) demands and shift the average timing of peak streamflow (hydropower production) away from summer to the spring and winter, depriving power systems of hydropower when it is needed the most. Here, we investigate how climate change could alter interregional electricity market dynamics on the West Coast, including the potential for hydroclimatic changes in one region (e.g. Pacific Northwest (PNW)) to “spill over” and cause price and reliability risks in another (e.g. California). We find that the most salient hydroclimatic risks for the PNW power system are changes in streamflow, while risks for the California system are driven primarily by changes in summer air temperatures, especially extreme heat events that increase peak system demand. Altered timing and amounts of hydropower production in the PNW do alter summer power deliveries into California but show relatively modest potential to impact prices and reliability there. Instead, it is future climate conditions (extreme heat) in California that may exert a stronger significant influence on prices and reliability in the PNW, especially if California continues to rely on its northern neighbor for imported power to meet higher summer demands.

24 POWER TRANSMISSION AND DISTRIBUTION↗

Energy Storage Market Transformation Through Stored Energy Targets

Aggressive energy decarbonization targets will require the rapid deployment of renewable energy in the U.S. in coming years. As the amount of variable generation on the grid grows, there will be an increasing need for long-duration energy storage (LDES) technologies to maintain grid reliability. Meeting that need will require a suite of technology alternatives with different capabilities. Many of these alternatives, however, are in a nascent state and face significant commercialization challenges. In the last decade, 10 U.S. states have enacted energy storage mandates as a vehicle for market transformation to accommodate energy storage. Those mandates, however, fail to send appropriate investment signals for LDES technologies because they are based on energy storage capacity and treat all technologies the same, regardless of duration. This paper explores the idea of replacing capacity-based storage procurement targets with stored energy targets, which would be technology-neutral policies designed to enable the market transformation necessary to support a competitive LDES industry.

Twitchell, Jeremy B.↗

A Decentralized Market Mechanism for Energy Communities under Operating Envelopes

Here, we propose an operating envelopes (OEs) aware energy community market mechanism that dynamically charges/rewards its members based on two-part pricing. The OEs are imposed exogenously by a regulated distribution system operator (DSO) on the energy community's revenue meter and is subject to a generalized net energy metering (NEM) tariff design. By formulating the interaction of the community operator and its members as a Stackelberg game, we show that the proposed two-part pricing achieves a Nash equilibrium and maximizes the community's social welfare in a decentralized fashion while ensuring that the community's operation abides by the OEs. The market mechanism conforms with the cost-causation principle and guarantees community members a surplus level no less than their maximum surplus when they autonomously face the DSO. The dynamic and uniform community price is a monotonically decreasing function of the community's aggregate renewable generation. We also analyze the impact of exogenous parameters such as NEM rates and OEs on the value of joining the community. Lastly, through numerical studies, we showcase the community's welfare, and pricing, and compare its members' surplus to customers under the DSO's regime.

24 POWER TRANSMISSION AND DISTRIBUTION↗

Secured Reserve Scheduling of Pumped-Storage Hydropower Plants in ISO Day-ahead Market

Due to the fast response ability and high ramping rates, pumped-storage hydropower (PSH) plants are playing an increasingly critical role in mitigating power generation fluctuations induced by the growing proliferation of renewable energy resources. However, because they are energy-limited resources, actual reserve deployment from PSHs would cause the deviation of state-of-charge (SOC) from the scheduled value, which, once accumulated over time, could induce potential violations on SOC limits and cause non-dispatchability of PSHs. In recognizing this potential issue, it can become important to securing the reserve schedule of PSHs and other energy limited resources preventively in the day-ahead market clearing. To ensure reserve dispatchability of PSHs despite SOC deviations, this paper proposes the reserve secure constraints, which are cast as a distributionally robust chance-constrained formulation by judiciously introducing random parameters to describe deployment ratios of scheduled regulation reserve from PSHs. Furthermore, these constraints are converted into tractable second-order cone constraints, and further approximated as linear constraints to be compatible with the current ISO day-ahead market clearing model. A modified IEEE 118-bus system with multiple PSHs is adopted to verify the proposed approach.

13 HYDRO ENERGY↗

Reserve Model of Energy Storage in Day-ahead Joint Energy and Reserve Markets: A Stochastic UC Solution

With many favorable advantages including fast response ability in particular, utility-level energy storage systems (ESS) are being integrated into energy and reserve markets to help mitigate uncertain renewable resources and fluctuant demands. This paper discusses a stochastic unit commitment (UC) model to explore capabilities of ESSs in providing valuable grid services by simultaneously joining energy and reserve markets. The proposed reserve model of ESSs presents the following features: (i) two constraints are proposed to formulate ESS’s reserve provision ability in each hour via six operation modes, namely increasing/reducing the level of charge, switching to discharge, increasing/reducing the level of discharge, switching to charge; (ii) as an energy-limited asset, constraints on ESS’s reserve deliverability across multiple hours is introduced to hold enough state of charge (SOC) headroom and floor room, guaranteeing that reserves cleared in individual hours are continuously deliverable over multiple successive hours without violating operation limits. Furthermore, a scenario-based UC model, which addresses uncertainties of renewables and demands, is adopted to evaluate reserves provided by ESSs and generators. To effectively solve the stochastic UC problem, the progressive hedging algorithm with heuristic approaches is discussed. A 6-bus system and a modified IEEE 118-bus system are used to illustrate effectiveness of the proposed approaches.

25 ENERGY STORAGE↗

Global Market and Economic Welfare Implications of Changes in Agricultural Yields Due to Climate Change

The economic welfare effects of climate change on global agriculture will be mediated by several complex biophysical and economic processes. For a given emissions scenario, these include: (1) the response of the climate system to anthropogenic forcing, (2) the response of crop yields to climate system and carbon dioxide changes, given baseline improvements in crop yields, (3) the response of agricultural markets to crop yield changes, and (4) the economic welfare implications of such market responses. In this paper, we use information about the first two processes from available climate-crop model comparison studies to analyze implications for the third and fourth processes. Applying the range of crop yield changes in a Global Integrated Assessment Model (GCAM) highlights several important economic relationships. First, we find a consistent relationship between global cropland area and yield change that is approximately orthogonal to the relationship between regional cropland area and yield change. Second, we find that the change in economic welfare, expressed as total surplus change per unit economic output, peaks during the 21st century. Third, we find that, at the global level, changes in yield affect both producer surplus and consumer surplus. Specifically, surplus changes to producers and consumers are always opposite in sign, although which economic actors gain or lose varies with the sign of yield change for any given commodity. Taken together, these results contribute to a growing body of research on climate-induced changes on agriculture by highlighting several economic relationships that are robust to differences in the underlying biophysical responses.

54 ENVIRONMENTAL SCIENCES↗