Results for “Operation Reserve”

DOE OSTI2023

Market Pricing and Settlements Analysis Considering Capacity Sharing and Reserve Substitutions of Operating Reserve Products

Electricity market pricing and settlement are the key signals for real-time dispatch and long-term investment decisions. Regional transmission operators (RTOs) in the U.S. adopt uniform pricing scheme, which is based on the marginal costs of supplying an incremental MW of electric services. The marginal cost of an electric service is highly dependent on the constraints in the pricing models of RTOs. A slight difference in constraint modeling of pricing model on energy and ancillary services could result in drastically different market clearing prices (MCPs), cleared reserve quantities, and associated revenue. RTOs in the U.S. have various market designs and assumptions in ancillary services modeling in capacity sharing and reserve substitutes. This paper examines four combination models of capacity sharing and reserve substitutes and analyzes the associated market implications. The numerical results present that 1) cascading reserve requirements have direct impact on reserve pricing schemes 2) both cascading reserve requirements and sharing capacity have significant impact on reserve MCPs and locational marginal prices, and thus result in drastically different reserve revenue, energy revenue, generation cost, and generation profit.

ancillary services↗

DOE OSTI2024

An empirical analysis of supply offers in the ERCOT operating reserves markets

Here, this paper seeks to improve theoretical and empirical understanding of supplier dynamics in wholesale markets for operating reserves, which have been understudied compared to energy markets. We begin by identifying several economic factors that unit owners may consider when submitting offers into operating reserves auctions in two-stage, co-optimized markets common across much of North America. Next, we analyze historical offer data from the Electric Reliability Council of Texas (ERCOT) market to assess whether actual reserve market behavior aligns with expectations based on economic theory, as well as with commonly used assumptions in electricity market modeling efforts. We find that the aggregate supply of operating reserves in ERCOT varies meaningfully over time, becoming more expensive during summer afternoons, which is consistent with theoretical expectations but contradicts the typical modeling assumption of temporally invariant reserve offers. Analysis of offers made by individual units uncovers additional insights, such as the existence of large offer pattern differences by unit owner and the tendency of battery storage units to submit very low offer prices. We conclude by discussing how our findings can be integrated into electricity market modeling assumptions to improve alignment with observed operating reserve offer inputs and pricing outcomes.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

DOE OSTI2024

Market Implications of Alternative Operating Reserve Modeling in Wholesale Electricity Markets

Pricing and settlement mechanisms are crucial for efficient resource allocation, investment incentives, market competition, and regulatory oversight. In the United States, Regional Transmission Operators (RTOs) adopts a uniform pricing scheme that hinges on the marginal costs of supplying additional electricity. This study investigates the pricing and settlement impacts of alternative reserve constraint modeling, highlighting how even slight variations in the modeling of constraints can drastically alter market clearing prices, reserve quantities, and revenue outcomes. Focusing on the diverse market designs and assumptions in ancillary services by U.S. RTOs, particularly in relation to capacity sharing and reserve substitutions, the research examines four distinct models that combine these elements based on a large-scale synthetic power system test data. Our study provides a critical insight into the economic implications and the underlying factors of these alternative reserve constraints through market simulations and data analysis.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

DOE OSTI2023

An Analysis of the Effects of Renewable Energy Intermittency on the 2030 Korean Electricity Market

Republic of Korea has unique geographical characteristics similar to those of an island, resulting in an isolated power system. For this reason, securing sufficient operating reserves for the system’s stability and reliability in the face of the intermittency of increasing variable renewable energy (VRE) is paramount, and this will pave the way to achieving the nation’s decarbonization target and carbon neutrality. However, the current reserve-operation method in Republic of Korea does not take into account energy-system conditions, such as the intermittency of the VRE. Therefore, this paper presents an analysis of the impact of changes in reserve-operation methods on the electricity market in the future Republic of Korean power system, with the increased levels of VRE that are currently envisioned. Specifically, three reserve-operation methods, including Korea’s current reserve-power-operation standards, were applied to the two power-system plans announced by the Korean government to analyze the annual generator operation and costs. The analysis results show that securing reserves proportional to the VRE would exert negative effects, such as increased power-generation costs and the curtailment of nuclear and VRE generation. These results can contribute to the estimation of operational reserves needed for high levels of VRE and to the design of new the Korean reserve market, to be introduced in 2025.

24 POWER TRANSMISSION AND DISTRIBUTION↗

DOE OSTI2023

Impact of Wildfires on Solar Generation, Reserves and Energy Prices

Wildfire seasons in the Western U.S. become more prolonged and intense in recent years bringing significant variability and uncertainty of solar generation. It greatly challenges the bulk power system and electricity market operation managed by California Independent System Operator (CAISO) as California leads both the wildfire records and the solar power integration. This study presents a screening-level analysis of the impact of wildfires on solar generation, operating reserve and energy prices applying historical real-world wildfire and market operation data. To the best of the authors knowledge, it is a first-of-its-kind study and will lay the foundation for market impact quantification and wildfire mitigation strategies design based on projected wildfire activities in future years.

electricity price↗

DOE OSTI2023

The interaction of wholesale electricity market structures under futures with decarbonization policy goals: A complexity conundrum

Competitive wholesale electricity markets can help facilitate energy system decarbonization by incentivizing investments in clean energy technologies that meet evolving system needs. We explore market structure impacts on generator operations and deployment by risk-averse, heterogeneous investor firms using the Electricity Markets and Investment Suite - Agent-based Simulation (EMIS-AS) model. Here we apply clean energy targets of 45%-100% by 2035 considering energy, ancillary services, capacity, and clean energy credit products and pricing and eligibility rules. Results highlight a complexity conundrum, whereby finding the "right" market design to achieve decarbonization goals and avoid unintended consequences can be a highly-nuanced, non-incremental challenge. Carefully designed energy-only markets can achieve the same clean energy targets as capacity market structures but with different revenue and profitability outcomes. Operating reserve demand curve-based scarcity pricing can substitute capacity markets for similar deployment outcomes. Carbon pricing alone is most effective at achieving decarbonization levels at low clean energy targets, and clean energy credit markets and carbon pricing are substitutionary at high clean energy targets. Restricting technology participation in capacity and operating reserve markets can impact deployment and operations, even for nonrestricted technologies. Adding an inertia product with fast frequency response yields insufficient provision at high clean energy targets, but work is needed to understand frequency requirements and capabilities.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

DOE OSTI2023

Reserve and energy scarcity pricing in United States power markets: A comparative review of principles and practices

Here, errors in forecasting load and renewable-based generation in restructured power systems mean that independent system operators (ISOs) must procure sufficient operating reserves to keep the real-time operation of the system reliable and secure. But when procured reserves turn out to be insufficient in real-time due to the lack of resource capacity or ramp capability, operators often set higher prices for reserves and energy to encourage more supply, and to motivate consumers to decrease usage or shift it to other times. This procedure, which is called scarcity or shortage pricing, is a core feature of U.S. electricity markets. It is receiving increased attention from market designers and stakeholders because scarcity will become more important for spot price formation in the future with the increased penetration of zero-marginal cost renewables, and the shrinking role of fuel costs in setting prices. Scarcity pricing is implemented in various ways by different ISOs. These differences have practical implications for the level of prices and incentives for investment, operations, and demand modification. In this paper, general approaches and specific calculation procedures for reserve and energy scarcity pricing practices and calculations across the seven ISO-based U.S. power markets are reviewed and compared. A consistent terminology is used to facilitate the comparison. Current scarcity pricing practices are grouped into three approaches: (1) imposing an adder after the spot market is run; (2) including stepwise demand curves within market clearing procedures for non-contingency reserve products (e.g., the novel flexiramp product), which tends to yield longer right tails for energy scarcity premium curves; and (3) having stepwise demand curves for traditional contingency reserve products only, which results in shorter right tails in energy scarcity curves. A generic numerical example is presented to highlight the large practical differences among the reserve scarcity pricing approaches and specific implementations. To further investigate factors that contribute the most to demand curves differences among ISOs, a sensitivity analysis is performed. This analysis shows that the largest source of differences among the curves is the scarcity prices assumed in the case of severe scarcity, while the number of steps used and whether flexiramp is considered also yields important differences in scarcity prices. As renewable penetration increases, it will become increasingly crucial to employ administrative demand curves so that spot prices more effectively motivate supply and demand adjustments exactly when and where they are needed. This study shows that the different assumptions yield very different scarcity premiums for reserves and energy, and are likely to provide divergent incentives for resources to respond to shortages. It is concluded that to promote market efficiency, a reserve shortage demand curve should have at least three features: inclusion of the marginal value of reserve products at each shortage level, consideration of the magnitude and probability of supply contingencies, and avoidance of abrupt price discontinuities that can cause excessively volatile market outcomes.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

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

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 OSTI2024

Solar and Storage Integration in the Southeastern United States: Economics, Reliability, and Operations

Solar energy has the potential to be a core energy resource for the southeastern United States. To better understand the implications of higher levels of solar PV (27%-43% of total generation capacity) and electricity storage (13%-49% of peak load) would affect electricity system reliability, costs, and operations in the U.S. Southeast, this study sought to address two main questions. First, how would higher levels of solar PV and electricity storage impact the costs, reliability, and operations of electricity systems in the Southeast in 2035? Second, at different levels of solar PV and electricity storage, what are the benefits of operational coordination among utilities in the Southeast, through more efficient regional dispatch and sharing operating reserves? To answer these questions, the study used detailed capacity expansion and dispatch modeling to develop and examine 15 scenarios with different levels of solar PV, electricity storage, and operational coordination, focusing on the year 2035. The study also evaluates the benefits of operational coordination among utilities through more efficient regional dispatch and reserve sharing, at different levels of solar and storage. The study focuses on five balancing regions that cover Alabama, Georgia, Kentucky, North Carolina, South Carolina, Tennessee, and parts of Mississippi and Missouri.

14 SOLAR ENERGY↗

DOE OSTI2024

Solar and Storage Integration in the Southeastern United States: Economics, Reliability, and Operations

Solar energy has the potential to be a core energy resource for the southeastern United States. To better understand the implications of higher levels of solar PV (27%-43% of total generation capacity) and electricity storage (13%-49% of peak load) would affect electricity system reliability, costs, and operations in the U.S. Southeast, this study sought to address two main questions. First, how would higher levels of solar PV and electricity storage impact the costs, reliability, and operations of electricity systems in the Southeast in 2035? Second, at different levels of solar PV and electricity storage, what are the benefits of operational coordination among utilities in the Southeast, through more efficient regional dispatch and sharing operating reserves? To answer these questions, the study used detailed capacity expansion and dispatch modeling to develop and examine 15 scenarios with different levels of solar PV, electricity storage, and operational coordination, focusing on the year 2035. The study also evaluates the benefits of operational coordination among utilities through more efficient regional dispatch and reserve sharing, at different levels of solar and storage. The study focuses on five balancing regions that cover Alabama, Georgia, Kentucky, North Carolina, South Carolina, Tennessee, and parts of Mississippi and Missouri.

14 SOLAR ENERGY↗

DOE OSTI2024

Achieving an 80% Renewable Portfolio in Alaska's Railbelt: Cost Analysis

This study examines the system-level costs and benefits of increased renewable energy deployment in the Railbelt grid, in the context of a proposed 80% renewable portfolio standard (RPS). This work studies the period from 2024 to 2040 and uses a model that simulates the planning, evolution, and operation of the power system to identify the mix of resources that maintains system reliability at the lowest electricity system cost over the period of analysis. The model tracks several reliability metrics, including the ability to serve demand during all hours of the year, even when normal power system failures occur. The model includes several measures (and associated costs) to address the variable output of renewable resources, including additional operating reserves, fuel storage, cycling of fossil plants, and additional equipment needed to maintain system stability. The Reference (least-cost) scenario results in substantial deployment of renewable energy and cost savings, reaching about 76% of Railbelt generation derived from renewables in 2040. Annual savings average about $105 M/year from 2030 to 2040. About 50% of this generation is from wind by 2040. Enforcing an 80% RPS results in about a 2% cumulative reduction in net savings. Demand is met in all scenarios, relying heavily on use of existing hydropower and fossil-fueled generators during periods of low renewable output. Meeting the increase in variability will require substantial changes in how the system is operated, with inverter-based resources providing nearly 100% of electricity during some periods.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

DOE OSTI2025

Real-Time Dispatcher for a Distributed Energy Resource Power Plant to Provide Grid Services [SWR-25-17]

This software dispatches the aggregated power of a distributed energy resource (DER) plant located on an electrical distribution network. It is designed to provide the following services to the grid in real-time: (i) voltage support of the distribution network, (ii) virtual power plant at the substation with power factor support, and (iii) operating reserves for automatic generator control for the transmission system. This dispatcher integrates with the local power plant controller and utilizes the battery energy storage system (BESS) to smooth the volatile net power output from the DERs. It can also integrate with a day-ahead scheduler to strategically charge and discharge.

Comden, Joshua [National Renewable Energy Laborato↗

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 OSTI2025

Lower Snake River Dams Contribution to Grid Services

Hydroelectric generation and water storage have long been components of the clean energy mix, providing both reliable steady output and operational flexibility. As variable renewable energy sources such as wind and solar increasingly replace traditional generation, the role of all flexible resources—including hydropower—in balancing supply and demand continues to evolve. This study examined the contribution of the Lower Snake River (LSR) Dam plants to Bonneville Power Administration grid services in maintaining power system reliability within the Western Interconnection. By analyzing publicly available data, the study evaluated various reliability services through performance metrics including energy capacity, balancing and ramping, voltage and reactive power support, frequency response, and transmission impact. Results indicated that the LSR plants deliver services as expected based on their size, contributing to the balancing process, ramping capabilities, and operational reserves, particularly during peak load conditions and weather events, while also providing measurable frequency and voltage support to the grid.

13 HYDRO ENERGY↗

DOE OSTI2023

Multi-Timescale Integrated Dynamics and Scheduling for Solar (MIDAS-Solar) (Final Technical Report)

Solar photovoltaic (PV) installations have experienced unprecedented growth in the United States. PV will become not only an energy producer but also a necessary provider of ancillary services at multiple timescales. Conventional methods to simulate power systems operations - such as long-term production simulation (which typically considers schedules from hours to minutes by using an optimization framework) and short-term transient studies (which simulate dynamics from seconds to sub-seconds using state variables and differential equations) - are not sufficient for studying the multiple-timescale variation of solar generation and its impact on system reliability. Long-term system economics and short-term system dynamics are highly coupled, particularly when the penetration level of renewable generation is extremely high, because the uncertainty and variability of solar generation will impact both power system steady-state and dynamic performance. This project helps meet and exceed the U.S. Department of Energy Office of Energy Efficiency and Renewable Energy Solar Energy Technologies Office goal of systems integration by directly addressing this stability and reliability challenge for power grid planning and operation. We have developed a temporally comprehensive, closed-loop simulation model, named Multi-timescale Integrated Dynamics and Scheduling (MIDAS), that seamlessly simulates power system operations from economic scheduling (day-ahead to hours) to dynamic response analysis (seconds to sub-seconds). For schedules with very high levels of inverter-based resources (IBRs), up to and including 100%, the stability of grid controls has been evaluated through electromagnetic transient (EMT) simulations and power-hardware-in-the-loop (PHIL) simulations of key transient events at key schedule points. Specifically, MIDAS provides: 1) a closed-loop simulation framework for simulating timescales from economic scheduling to dynamic stability analysis; 2) machine learning-based stability assessment; 3) EMT modeling and analysis for large-scale power systems; 4) MIDAS PHIL test bed. We worked with Hawaii Electric Companies to apply the MIDAS study framework to a Maui grid study. The entire island's transmission system was modeled in detail - from a yearly scheduling model, to a second-level frequency dynamic model, down to a sub-second-scale EMT model to address critical stability issues. The project demonstrated how MIDAS can help system planners and operators assess system reliability and stability while the power grid is marching toward a high-renewable, high-IBR future. In this Maui grid study, we found that 100% instantaneous IBR operation is achievable in EMT simulation and PHIL testing, and grid planners and operators might need new analysis/simulation tools to assess grid reliability and stability in the scheduling stage. MIDAS will bring Maui and other systems closer to 100% clean and stable energy futures. (In this study, we examined transient stability. Other topics necessary for 100% IBR operation, such as protection and resource adequacy, were not examined.)

100% Renewables↗

DOE OSTI2024

Planning and Operations in Electricity Markets Under System Tansformation: Key Findings

This report summarizes a set of key findings that have been developed through a set of interconnected research activities performed by five institutions between January 2020 and December 2023. The project team, comprising Argonne National Laboratory, the National Renewable Energy Laboratory, Lawrence Berkeley National Laboratory, the Electric Power Research Institute, and Johns Hopkins University, collective engaged with the North American Independent System Operators and Regional Transmission Operators (ISO/RTOs) to identify the key challenges they are facing and opportunities for the project team to provide technical assistance in several prioritized challenge areas.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗

DOE OSTI2026

Supporting Resource Adequacy via the ReEDS-India Model [Slides]

ReEDS-India is an open-access tool for mid- and long-term capacity expansion modeling that finds the mix of generation, transmission, and storage technologies that meet the anticipated requirements of the electric sector at least cost.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗