Results for “Markets” — Page 4

DOE OSTI2021

Supporting the Transition from Grid-Scale to Emerging Market Wave Energy Converter Design and Assessment

In the past decade there has been increasing interest in emerging markets for wave energy, both as a stepping stone for development and as a way to create new opportunities for offshore markets such as ocean observation or desalination. Developers who were once focused exclusively on grid-scale development have begun to engage with more unique markets. This has led researchers to begin examining means of assessing emerging-market devices. In this paper, we analyze the Technology Performance Level (TPL) Assessment for its potential use in the assessment of emerging market wave energy converters (EM-WECs). We use Quality Function Deployment (QFD) and a question-by-question analysis of the TPL assessment to determine the changes necessary for such an assessment to be applicable in emerging markets. We discuss how the primary differences between the markets could impact the viable development pathways for developers hoping to succeed in multiple markets. We determine that the different stakeholders and stakeholder requirements of some emerging markets compared to gridscale applications should be met with changes to cost-toperformance metrics, prototype testing processes, recovery planning, materials selection, optimization objectives, and public engagement.

blue economy↗

DOE OSTI2021

Roles of retailers in the peer-to-peer electricity market: A single retailer perspective

Despite extensive research in the past five years and several successfully completed and on-going pilot projects, regulators are still reluctant to implement peer-to-peer trading at a large-scale in today’s electricity market. The reason could partly be attributed to the perceived disadvantage of current market participants like retailers due to their exclusion from market participation - a fundamental property of decentralized peer-to-peer trading. As a consequence, recently, there has been growing pressure from energy service providers in favor of retailers’ participation in peer-to-peer trading. However, the role of retailers in the peer-to peer market is yet to be established as no existing study has challenged this fundamental circumspection of decentralized trading. In this context, this perspective takes the first step to discuss the feasibility of retailers’ involvement in the peer-to-peer market. In doing so, we identify key characteristics of retail-based and peer-to-peer electricity markets and discuss our viewpoint on how to incorporate a single retailer in a peer-to-peer market without compromising the fundamental decision-making characteristics of both markets. Finally, we give an example of a hypothetical business model to demonstrate how a retailer can be a part of a peer-to-peer market with a promise of collective benefits for the participants.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

DOE OSTI2021

Variable Renewable Energy Participation in U.S. Ancillary Services Markets: Economic Evaluation and Key Issues

Variable renewable energy (VRE) is not yet meaningfully participating in U.S. ancillary services (AS) markets. VRE participation in AS markets could provide a new source of revenues for VRE resource owners to offset declining energy and capacity values and a new tool for power system operators to address emerging system constraints. This paper uses a price-taker dispatch model and historical prices to estimate the economic value of standalone and hybrid (battery-paired) VRE participation in AS markets, from resource owner and electricity system perspectives, in each of the seven U.S. independent system operator and regional transmission organization (ISO/RTO) markets. Across ISO/RTO markets, average (2015-2019) simulated incremental revenues from regulation market participation were $\$$0.0-2.9/MWh (+0-15% of revenue without participation) for standalone VRE owners and $\$$1-33/MWh (+1-69%) for hybrid VRE owners. However, ISO/RTO reserve markets are relatively thin and have the potential to become saturated by energy storage projects that are currently in ISO/RTO interconnection queues. In most markets, standalone and hybrid VRE were able to provide regulation reserves during periods with high regulation prices, suggesting that VRE participation in AS markets could have high system value. The analysis highlights the value of separate upward and downward regulation products and suggests that ISOs/RTOs might consider initially focusing on enabling hybrid VRE provision of AS.

14 SOLAR ENERGY↗

DOE OSTI2022

Enabling Principles for Dual Participation by Energy Storage as a Transmission and Market Asset

Because the electric transmission system is sized to meet the highest levels of customer demand, much of its designed capacity goes unused during average operating conditions. As a uniquely flexible and scalable asset capable of providing multiple grid services, energy storage can be deployed to support the transmission system and then also provide services to energy markets when not needed for transmission. This paper reviews the technical barriers in transmission planning practices and energy market design that prevent the realization of dual-use energy storage projects that provide both regulated transmission and competitive market services. Current practices create barriers against the identification of energy storage in the transmission planning process and against the participation of a regulated transmission asset in competitive energy markets. A review of regional transmission plans identifies best practices for including energy storage in the planning process by directing planners to proactively identify such projects or by providing clear mechanisms for stakeholders to propose them. Creating a market participation model for dual-use energy storage assets requires establishing when an asset will be allowed to participate in the market, how it will participate in the market, and where it will recover its costs. In answering these questions, key principles must be satisfied, such as prioritizing reliability, incrementally building on existing market design, and balancing competing objectives. Several policy options exist for satisfying those principles, giving grid operators and stakeholders significant flexibility in developing a dual-use participation model in accordance with regional policies and conditions. By objectively framing the issue and identifying policy options, this paper may inform subsequent proceedings on dual-use energy storage and be a resource to regional market operators, utilities, developers, regulators, policymakers, and other stakeholders as they collectively work on this complex issue.

24 POWER TRANSMISSION AND DISTRIBUTION↗

DOE OSTI2024

Can Wholesale Electricity Markets Achieve Resource Adequacy and High Clean Energy Generation Targets in the Presence of Self-Interested Actors?

Wholesale electricity markets are intended to incentivize system generation investments and operations outcomes that meet evolving system needs. In this work, we evaluate the effectiveness of wholesale market structures, rules and policies in achieving system resource adequacy (RA) and clean energy targets in the presence of self-interested generation investors using the Electricity Markets and Investment Suite Agent-based Simulation (EMIS-AS) model. Results highlight that both capacity markets and operating reserve demand curves (ORDCs) can help achieve a reliable system but with different RA compliance timelines and distribution of generation technologies. Structures with capacity markets tend to favor more capital-intensive peaking technologies while reducing wind and solar build-outs due to suppressed energy and clean energy market prices, particularly in the absence of strong clean energy targets. Conversely, ORDCs improve the commitment of available generation units, but this comes at the expense of higher system costs and renewable generation curtailment. We also find that well-calibrated static capacity demand curves can yield similar reliability and total cost compared to capacity market demand curves informed dynamically by resource adequacy while also yielding stable annual capacity prices. Different approaches to formulating ORDC curves can also yield key trade-offs, namely that a more efficient treatment of storage chronology results in lower ORDC curves and prices, yielding less investment and cost but at the expense of reliability. Finally, the effectiveness of wholesale electricity markets in practically achieving very high clean energy generation targets highly depends on the cost-competitiveness of clean energy technologies that can support critical balancing needs across multiple timescales.

capacity expansion↗

DOE OSTI2021

Optimal scheduling for profit maximization of energy storage merchants considering market impact based on dynamic programming

This paper analyzes how electricity merchants' market impact affects merchants' profit. Energy storage has long been studied for its role in maximizing profit, and merchant decisions are assumed to have no impact on market prices. However, the trading decisions of large-scale energy storage merchants (e.g., pumped storage hydro) will affect the market prices. This paper employs dynamic programming theory to investigate merchants' optimal economic dispatch considering the market impact and physical characteristics of storage systems. Our findings show that the State-of-Charge (SOC) based analytical solution significantly facilitates energy storage merchants' decision-making. The SOC range is segmented into three regions by two optimal SOC reference points, which depend on the available energy in storage, given prices, and market impact. By comparing the current storage SOC with the reference points, the merchant can get the corresponding optimal actions. We analytically show that if the merchant neglects the market impact on the power market, she will exaggerate her expected profit when the price-taker and price-maker merchants have the same generating and pumping upper limits offered to Independent System Operators (ISOs). Furthermore, the profit-maximizing merchant must, therefore, assay to balance the trade-off correctly between the intensity of market impact and the dispatched power. Our findings are verified by numerical simulation, and results demonstrate the ramifications for electricity merchants in energy arbitrage decisions.

25 ENERGY STORAGE↗

DOE OSTI2024

Wholesale Electricity Markets and Resource Adequacy with High Clean Energy Generation Targets

Wholesale electricity markets are intended to incentivize system generation investments and operations outcomes that meet evolving system needs. In this work, we evaluate the effectiveness of wholesale market structures, rules and policies in achieving system resource adequacy (RA) and clean energy targets in the presence of self-interested generation investors using the Electricity Markets and Investment Suite Agent-based Simulation (EMIS-AS) model. Results highlight that both capacity markets and operating reserve demand curves (ORDCs) can help achieve a reliable system but with different RA compliance timelines and distribution of generation technologies. Structures with capacity markets tend to favor more capital-intensive peaking technologies while reducing wind and solar build-outs due to suppressed energy and clean energy market prices, particularly in the absence of strong clean energy targets. Conversely, ORDCs improve the commitment of available generation units, but this comes at the expense of higher system costs and renewable generation curtailment. We also find that well-calibrated static capacity demand curves can yield similar reliability and total cost compared to capacity market demand curves informed dynamically by resource adequacy while also yielding stable annual capacity prices. Different approaches to formulating ORDC curves can also yield key trade-offs, namely that a more efficient treatment of storage chronology results in lower ORDC curves and prices, yielding less investment and cost but at the expense of reliability. Finally, the effectiveness of wholesale electricity markets in practically achieving very high clean energy generation targets highly depends on the cost-competitiveness of clean energy technologies that can support critical balancing needs across multiple timescales.

capacity expansion↗

DOE OSTI2024

Wholesale Electricity Market Design to Support Resource Adequacy

Wholesale electricity markets are intended to incentivize system generation investments and operations outcomes that meet evolving system needs. In this work, we evaluate the effectiveness of wholesale market structures, rules and policies in achieving system resource adequacy (RA) and clean energy targets in the presence of self-interested generation investors using the Electricity Markets and Investment Suite Agent-based Simulation (EMIS-AS) model. Results highlight that both capacity markets and operating reserve demand curves (ORDCs) can help achieve a reliable system but with different RA compliance timelines and distribution of generation technologies. Structures with capacity markets tend to favor more capital-intensive peaking technologies while reducing wind and solar build-outs due to suppressed energy and clean energy market prices, particularly in the absence of strong clean energy targets. Conversely, ORDCs improve the commitment of available generation units, but this comes at the expense of higher system costs and renewable generation curtailment. We also find that well-calibrated static capacity demand curves can yield similar reliability and total cost compared to capacity market demand curves informed dynamically by resource adequacy while also yielding stable annual capacity prices. Different approaches to formulating ORDC curves can also yield key trade-offs, namely that a more efficient treatment of storage chronology results in lower ORDC curves and prices, yielding less investment and cost but at the expense of reliability. Finally, the effectiveness of wholesale electricity markets in practically achieving very high clean energy generation targets highly depends on the cost-competitiveness of clean energy technologies that can support critical balancing needs across multiple timescales.

agent based modeling↗

DOE OSTI2022

Incorporate day-ahead robustness and real-time incentives for electricity market design

In this paper, we propose a two-stage electricity market framework to explore the participation of distributed energy resources (DERs) in a day-ahead (DA) market and a real-time (RT) market. The objective is to determine the optimal bidding strategies of the aggregated DERs in the DA market and generate online incentive signals for DER-owners to optimize the social-welfare taking into account network operational constraints. Distributionally robust optimization is used to explicitly incorporate data-based statistical information of renewable forecasts into the supply/demand decisions in the DA market. We evaluate the conservativeness of bidding strategies distinguished by different risk aversion settings. In the RT market, a bi-level time-varying optimization problem is proposed to design the online incentive signals to tradeoff the RT imbalance penalty for distribution system operators (DSOs) and the costs of individual DER-owners. This enables tracking their optimal dispatch to provide fast balancing services, in the presence of time-varying network states while satisfying the voltage regulation requirement. Simulation results on both DA wholesale market and RT balancing market demonstrate the necessity of this two-stage design, and its robustness to uncertainties, the performance of convergence, the tracking ability and the feasibility of the resulting network operations.

24 POWER TRANSMISSION AND DISTRIBUTION↗

DOE OSTI2022

Economic dispatch for electricity merchant with energy storage and wind plant: State of charge based decision making considering market impact and uncertainties

Here this paper investigates how the market impact of electricity merchants and uncertainty of wind generation affect their co-optimized scheduling policy, specifically for merchants who have both energy storage and wind plants. In the existing literature, merchants' trading actions are usually assumed not to affect market prices; however, a large-scale energy storage merchant's actions can affect market prices. To this end, we approximate the electricity price by a linear function of the quantity of power traded by the merchant in the reward function to achieve decision-making incorporating the market impact. This paper utilizes the dynamic programming approach to analyze merchants' optimal multi-period decision-making incorporating market impact, uncertain wind generation, and energy storage constraints. First, our results demonstrate that for a merchant with co-located energy storage facilities and wind power plants, the energy storage's feasible state of charge (SOC) range can be segmented into four possible sub-ranges by three analytically developed SOC reference points. The unique optimal trading decision can be achieved by comparing the current energy inventory and the SOC references of the next period. Second, our results show that market impact and uncertainties substantially change the optimal storage scheduling policy by impacting the values of the reference points. To mitigate the negative effect of the merchant's market impact on buying and selling actions, the merchant may reduce the amount of generating or pumping electricity each period to maximize profit. Moreover, we identify and investigate the trade-off between market price and transaction quantity. Our findings provide co-optimized scheduling guidance for electricity merchants with co-located energy storage and renewable power plants systems.

17 WIND ENERGY↗

DOE OSTI2020

State-of-the-art short-term electricity market operation with solar generation: A review

With the accelerating penetration of solar energy in energy systems, market operations concerning the solar-associated intermittency are widely discussed. How to correctly model the solar generation in the market and solve the uncertainty-based operation problems call for solutions. Unlike other renewable resources, solar power can be more easily applied to the demand side through behind-the-meter installations in a distributed manner with significant future extensibility. The corresponding operational rules in the markets are largely being revised. Over the past two decades, with the development of deregulated power markets, numerous studies related to uncertainty-based market operations tend to transform the market from a deterministic and centralized framework to a stochastic and decentralized one. As the relevant literature is most recent, this paper reviews their contributions to electricity market operations with solar integration and underlines the research directions of this topic and ongoing industry practices. A thorough review of the electricity markets worldwide with solar energy is provided. A variety of proposed mathematical solutions to the problem are also addressed.

14 SOLAR ENERGY↗

DOE OSTI2020

Modeling charging infrastructure impact on the electric vehicle market in China

The plug-in electric vehicle (PEV) is deemed as a critical technological revolution, and the governments are imposing various vehicle policies to promote its development. Meanwhile, the market success of PEVs depends on many aspects. The study reported herein integrates one’s use of charging infrastructure at home, public place and workplace into the market dynamics analysis tool, New Energy and Oil Consumption Credits (NEOCC) model, to systematically assess the charging infrastructure (home parking ratio, public charging opportunity, and charging costs) impact on PEV ownership costs and analyze how the PEV market shares may be affected by the attributes of the charging infrastructure. Compared to the charging infrastructure, the impact of battery costs is incontrovertibly decisive on PEV market shares, the charging infrastructure is still non-negligible in the PEV market dynamics. The simulation results find that the public charging infrastructure has more effectiveness on promoting the PEV sales in the PEV emerging market than it does in the PEV mature market. However, the improvement of charging infrastructure does not necessarily lead to a larger PEV market if the charging infrastructure incentives do not coordinate well with other PEV policies. Besides, the increase of public charging opportunities has limited motivations on the growth of public PEV fleets, which are highly correlated to the number of public fast charging stations or outlets. It also finds that more home parking spaces can stimulate more sales of personal plug-in hybrid electric vehicles instead of personal battery electric vehicles.

32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATI↗

DOE OSTI2022

Addressing Market Issues in Electrical Power Systems with Large Shares of Variable Renewable Energy

This paper reports recent findings from IEA Wind TCP Task 25, which compiles international experiences and research related to large-scale integration of wind and other renewable energy. In the paper, we address the main challenges for market integration of variable renewable energy, relating to price formation, cost recovery, balancing and other grid services. The paper gives an overview of recent scenario studies on electricity price impacts of (1) various generation, energy storage and demand types in different markets, and (2) different market designs and energy/climate policies. Studying markets with very high shares of variable renewable energy requires an improved set of analysis tools for forecasting market outcomes, estimating flexibility needs and sources, and assessing resource adequacy. Key market features need to be investigated within these improved analytical capabilities for systems transitioning to high shares of variable renewable energy, storage and flexible demand. System services that can be supported by markets will likely need to be revisited. Finally, this paper identifies open questions and suggested future market design work for supporting systems with very high shares of variable renewable energy, which are to be addressed in follow-up work of Task 25 collaborative research.

cost recovery↗

DOE OSTI2020

A Penalty Scheme for Mitigating Uninstructed Deviation of Generation Outputs From Variable Renewables in a Distribution Market

With rapid growth of distributed renewable generation, the establishment of electricity distribution markets has attracted widespread concerns. Different from existing transmission grid-scale electricity markets, an electricity distribution market is featured by numerous small-scale prosumers, and zero marginal cost and intermittency of renewable generation units. Against this background, this paper first extends an average pricing market (APM) mechanism for pricing renewable generation outputs with zero marginal cost in the distribution network concerned. Then, to mitigate the uninstructed volatility of renewable generation outputs and power demand, a penalty scheme is proposed for deviations between the real-time demand/output and market cleared bid/offer, with frequency regulation service (FRS) from energy storage systems (ESSs) considered. It is proved that the market volatility can be well controlled within an expected limit through properly setting the penalty prices for load demand and generation output fluctuations. Also, with this mechanism a non-negative market surplus could always be attained. Case studies are carried out to demonstrate the feasibility and efficiency of the proposed distribution market mechanism and penalty scheme.

electricity distribution market↗

DOE OSTI2021

Clean Grid Vision: A U.S. Perspective - Chapter 5. Global Power Market Trends

The evolution of the electricity sector toward competitive modern markets is occurring over a long period and responding to rapid changes in technologies, business models, and other market factors. No reformed power market anywhere in the world looks the same today as it did a decade ago. Technology has enabled some of the evolution, but perhaps it is more important that people and institutions learn from experience how to make markets better over time. Governments still have an important role—not as the authority controlling prices, but as the authority safeguarding the integrity of the economic processes that create prices in response to supply and demand and ensure reliability and other objectives are met. More VRE resources will change market conditions, but they will not change market fundamentals. Prices provide important signals for new investments and how the grid operates—including new technologies and processes discussed elsewhere in this report. If poor market design or the exercise of market power by a large entity distort these signals, outcomes will cease to be efficient and the public will bear the additional cost. Fundamentally, prices reflect supply, demand, and the cost of technological options.

24 POWER TRANSMISSION AND DISTRIBUTION↗

DOE OSTI2020

Impacts of climate and biophysical variability on global agriculture markets

Agricultural production is highly sensitive to changes in climate and weather patterns. The focus of the great majority of studies assessing climate impacts on agriculture has been on mean changes in agricultural responses. However, the manner in which global agricultural markets respond to the interannual variability of the climate and biophysical shocks is poorly understood. Here we show a strong transmission of interannual variations in climate-induced biophysical yield shocks to agriculture markets, which is magnified further by endogenous market fluctuations. We demonstrate the importance of imperfect versus perfect expectations of market and weather in generating the market fluctuations that play a key role in transferring the interannual variations to markets. We find that the volatility of market prices and consumption could be potentially reduced on average by 55% and 41%, respectively, with improved expectations, where agricultural producers make better decisions to adapt to climate and biophysical variability. We also find much heterogeneity in interannual variability across crops and regions, which is considerably mediated by trade as part of the economic response. Our study provides new insights on climate impacts on agricultural market variability and lays a foundation for further investigating the full range of climate impacts on biophysical and human systems.

Zhao, Xin↗

DOE OSTI2020

Cost & Performance Requirements for Flexible Advanced Nuclear Plants in Future U.S. Power Markets

This report summarizes a modeling effort to estimate the highest allowable CapEx for advanced nuclear plants in future power market environments to still achieve a market rate of return for their owners. This is not a policy report making recommendations to policymakers about how to regulate power markets. Rather, the study’s assumptions and scenarios reflect likely market conditions across a large percentage of US electricity markets. Its goal is to define target cost and performance parameters determined by future market conditions in order to guide design choices and tradeoffs in the early stage of the reactor and power plant development process. Although this was not a deployment modeling exercise to determine the market size for a given technology at selected price points, it does suggest that advanced reactors delivered under the allowable CapEx thresholds identified in this report could cost competitively serve a significant fraction of load in the modeled power markets.

21 SPECIFIC NUCLEAR REACTORS AND ASSOCIATED PLANTS↗

DOE OSTI2022

Residential Façade Upgrades: Market Assessment and Recommendations

In support of DOE’s move toward transformational whole-building upgrades and enclosure solutions, the Pacific Northwest National Laboratory (PNNL) and National Renewable Energy Laboratory (NREL) are partnering and collaborating with leading building science researchers and home-performance entities to identify and characterize technical and economic barriers to façade retrofits in an effort to identify market-viable façade solutions and opportunities for an actionable plan to transform the market. The project includes partnerships with Building Science Corporation (BSC) and a combination of strategic implementation partners with home-performance and retrofit expertise and industry contacts. The project will include expert advisory and review consultation from Lawrence Berkeley National Laboratory’s (LBNL’s) Residential Windows & Attachments team and Oak Ridge National Laboratory’s Building Envelope team. The project consists of three parts: 1. a market analysis that captures the current state of the façade retrofit market and includes housing characteristics and retrofit costs, façade retrofit approaches and materials, contractor business models and workforce requirements to support advanced façade approaches; 2. an economic analysis focused on the viability of advanced façade retrofit approaches and materials; and 3. field demonstration of façade retrofits that include enhanced insulation/air-sealing and window technologies in multiple climate zones. This report represents the market analysis, as outlined in item 1 above. The goal of this analysis is to provide a techno-economic study that supports comprehensive retrofits of residential enclosures that include traditional approaches, and integrated wall assemblies and windows that result in durable, energy efficient, and marketable strategies. This study will provide a better knowledge base regarding the viable market for façade retrofit strategies, identify the barriers to uptake, analyze economic opportunities, and develop documentation specifically aimed to overcome technical and market barriers associated with installation.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗