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Title: Ancillary Service Revenue Potential for Geothermal Generators in California

Abstract

Achieving California’s 33% renewable generation goal will substantially increase uncertainty and variability in grid operations. Geothermal power plant operators could mitigate this variability and uncertainty by operating plants in a more flexible mode. Plant operators would be compensated for flexibility through payments for ancillary services such as frequency regulation, load following, and spinning reserve. This study explores economic incentives for geothermal plant operators to provide such flexibility. Historical and forecast ancillary service prices are compared to operator compensation for energy under firm contracts at fixed prices, which are higher than current or year 2020 projected market clearing prices for ancillary services in most hours of the year. Power purchase agreements recently executed by geothermal operators typically provide only energy payments at fixed energy prices and escalation rates. We postulate new contract structures that would allow a geothermal plant operator to switch from providing energy to providing ancillary services to the grid operator when it is advantageous to the plant operator to do so. Additional revenues would be earned through ancillary service payments. Estimates of these additional annual revenues a plant operator could realize are developed for a range of contract energy prices. The impacts of flexible operations on reservoir lifetimesmore » and implications for project finance are also discussed.« less

Authors:
 [1];  [1]
  1. Lawrence Livermore National Lab. (LLNL), Livermore, CA (United States)
Publication Date:
Research Org.:
Lawrence Livermore National Lab. (LLNL), Livermore, CA (United States)
Sponsoring Org.:
USDOE
OSTI Identifier:
1406430
Report Number(s):
LLNL-TR-665915
DOE Contract Number:  
AC52-07NA27344
Resource Type:
Technical Report
Country of Publication:
United States
Language:
English
Subject:
15 GEOTHERMAL ENERGY

Citation Formats

Edmunds, T., and Sotorrio, P. Ancillary Service Revenue Potential for Geothermal Generators in California. United States: N. p., 2015. Web. doi:10.2172/1406430.
Edmunds, T., & Sotorrio, P. Ancillary Service Revenue Potential for Geothermal Generators in California. United States. doi:10.2172/1406430.
Edmunds, T., and Sotorrio, P. Fri . "Ancillary Service Revenue Potential for Geothermal Generators in California". United States. doi:10.2172/1406430. https://www.osti.gov/servlets/purl/1406430.
@article{osti_1406430,
title = {Ancillary Service Revenue Potential for Geothermal Generators in California},
author = {Edmunds, T. and Sotorrio, P.},
abstractNote = {Achieving California’s 33% renewable generation goal will substantially increase uncertainty and variability in grid operations. Geothermal power plant operators could mitigate this variability and uncertainty by operating plants in a more flexible mode. Plant operators would be compensated for flexibility through payments for ancillary services such as frequency regulation, load following, and spinning reserve. This study explores economic incentives for geothermal plant operators to provide such flexibility. Historical and forecast ancillary service prices are compared to operator compensation for energy under firm contracts at fixed prices, which are higher than current or year 2020 projected market clearing prices for ancillary services in most hours of the year. Power purchase agreements recently executed by geothermal operators typically provide only energy payments at fixed energy prices and escalation rates. We postulate new contract structures that would allow a geothermal plant operator to switch from providing energy to providing ancillary services to the grid operator when it is advantageous to the plant operator to do so. Additional revenues would be earned through ancillary service payments. Estimates of these additional annual revenues a plant operator could realize are developed for a range of contract energy prices. The impacts of flexible operations on reservoir lifetimes and implications for project finance are also discussed.},
doi = {10.2172/1406430},
journal = {},
number = ,
volume = ,
place = {United States},
year = {Fri Jan 02 00:00:00 EST 2015},
month = {Fri Jan 02 00:00:00 EST 2015}
}

Technical Report:

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