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Title: Impacts of High Variable Renewable Energy Futures on Wholesale Electricity Prices, and on Electric-Sector Decision Making

Abstract

Increasing penetrations of variable renewable energy (VRE) can affect wholesale electricity price patterns and make them meaningfully different from past, traditional price patterns. Many long-lasting decisions for supply- and demand-side electricity infrastructure and programs are based on historical observations or assume a business-as-usual future with low shares of VRE. Our motivating question is whether certain electric-sector decisions that are made based on assumptions reflecting low VRE levels will still achieve their intended objective in a high VRE future. We qualitatively describe how various decisions may change with higher shares of VRE and outline an analytical framework for quantitatively evaluating the impacts of VRE on long-lasting decisions. We then present results from detailed electricity market simulations with capacity expansion and unit commitment models for multiple regions of the U.S. for low and high VRE futures. We find a general decrease in average annual hourly wholesale energy prices with more VRE penetration, increased price volatility and frequency of very low-priced hours, and changing diurnal price patterns. Ancillary service prices rise substantially and peak net-load hours with high capacity value are shifted increasingly into the evening, particularly for high solar futures. While in this report we only highlight qualitatively the possible impact ofmore » these altered price patterns on other demand- and supply-side electric sector decisions, the core set of electricity market prices derived here provides a foundation for later planned quantitative evaluations of these decisions in low and high VRE futures.« less

Authors:
 [1];  [1];  [1];  [2];  [2];  [2];  [2]
  1. Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
  2. LCG Consulting, Los Altos, CA (United States)
Publication Date:
Research Org.:
Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
Sponsoring Org.:
USDOE Office of Energy Efficiency and Renewable Energy (EERE)
OSTI Identifier:
1437006
Report Number(s):
LBNL-2001163
ark:/13030/qt2xq5d6c9
DOE Contract Number:
AC02-05CH11231
Resource Type:
Technical Report
Country of Publication:
United States
Language:
English
Subject:
29 ENERGY PLANNING, POLICY, AND ECONOMY

Citation Formats

Seel, Joachim, Mills, Andrew D., Wiser, Ryan H., Deb, Sidart, Asokkumar, Aarthi, Hassanzadeh, Mohammad, and Aarabali, Amirsaman. Impacts of High Variable Renewable Energy Futures on Wholesale Electricity Prices, and on Electric-Sector Decision Making. United States: N. p., 2018. Web. doi:10.2172/1437006.
Seel, Joachim, Mills, Andrew D., Wiser, Ryan H., Deb, Sidart, Asokkumar, Aarthi, Hassanzadeh, Mohammad, & Aarabali, Amirsaman. Impacts of High Variable Renewable Energy Futures on Wholesale Electricity Prices, and on Electric-Sector Decision Making. United States. doi:10.2172/1437006.
Seel, Joachim, Mills, Andrew D., Wiser, Ryan H., Deb, Sidart, Asokkumar, Aarthi, Hassanzadeh, Mohammad, and Aarabali, Amirsaman. Fri . "Impacts of High Variable Renewable Energy Futures on Wholesale Electricity Prices, and on Electric-Sector Decision Making". United States. doi:10.2172/1437006. https://www.osti.gov/servlets/purl/1437006.
@article{osti_1437006,
title = {Impacts of High Variable Renewable Energy Futures on Wholesale Electricity Prices, and on Electric-Sector Decision Making},
author = {Seel, Joachim and Mills, Andrew D. and Wiser, Ryan H. and Deb, Sidart and Asokkumar, Aarthi and Hassanzadeh, Mohammad and Aarabali, Amirsaman},
abstractNote = {Increasing penetrations of variable renewable energy (VRE) can affect wholesale electricity price patterns and make them meaningfully different from past, traditional price patterns. Many long-lasting decisions for supply- and demand-side electricity infrastructure and programs are based on historical observations or assume a business-as-usual future with low shares of VRE. Our motivating question is whether certain electric-sector decisions that are made based on assumptions reflecting low VRE levels will still achieve their intended objective in a high VRE future. We qualitatively describe how various decisions may change with higher shares of VRE and outline an analytical framework for quantitatively evaluating the impacts of VRE on long-lasting decisions. We then present results from detailed electricity market simulations with capacity expansion and unit commitment models for multiple regions of the U.S. for low and high VRE futures. We find a general decrease in average annual hourly wholesale energy prices with more VRE penetration, increased price volatility and frequency of very low-priced hours, and changing diurnal price patterns. Ancillary service prices rise substantially and peak net-load hours with high capacity value are shifted increasingly into the evening, particularly for high solar futures. While in this report we only highlight qualitatively the possible impact of these altered price patterns on other demand- and supply-side electric sector decisions, the core set of electricity market prices derived here provides a foundation for later planned quantitative evaluations of these decisions in low and high VRE futures.},
doi = {10.2172/1437006},
journal = {},
number = ,
volume = ,
place = {United States},
year = {Fri May 11 00:00:00 EDT 2018},
month = {Fri May 11 00:00:00 EDT 2018}
}

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