Economic evaluation of variable renewable energy participation in U.S. ancillary services markets

Kim, James Hyungkwan; Kahrl, Fredrich; Mills, Andrew; Wiser, Ryan; Montañés, Cristina Crespo; Gorman, Will

doi:10.1016/j.jup.2023.101578

Economic evaluation of variable renewable energy participation in U.S. ancillary services markets

Journal Article · Thu May 18 00:00:00 EDT 2023 · Utilities Policy

DOI:https://doi.org/10.1016/j.jup.2023.101578· OSTI ID:1985810

^[1]; Kahrl, Fredrich ^[2]; Mills, Andrew ^[1]; Wiser, Ryan ^[1]; Montañés, Cristina Crespo ^[1]; Gorman, Will ^[1]

Lawrence Berkeley National Laboratory (LBNL), Berkeley, CA (United States)
Lawrence Berkeley National Laboratory (LBNL), Berkeley, CA (United States); 3rdRail Inc., Berkeley, CA (United States)

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 revenue 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 the resource owner and electricity system perspectives, in each of the seven U.S. independent system operator and regional transmission organization (ISO/RTO) markets where ancillary service prices are set. Across ISO/RTO markets, average (2015–2019) simulated incremental revenues from power regulation market participation were 0.0–2.9 USD/MWh (+0–15% of revenue without participation) for standalone VRE owners and 1–33 USD/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 could provide power regulation reserves during periods with high power regulation prices, suggesting that VRE participation in AS markets could have high system value. The analysis highlights the relevance of separate upward and downward power regulation products and indicates that ISOs/RTOs might consider initially focusing on enabling hybrid VRE provision of AS.

Research Organization:: Lawrence Berkeley National Laboratory (LBNL), Berkeley, CA (United States)

Sponsoring Organization:: USDOE Office of Energy Efficiency and Renewable Energy (EERE), Renewable Power Office. Solar Energy Technologies Office; USDOE Office of Energy Efficiency and Renewable Energy (EERE), Renewable Power Office. Wind Energy Technologies Office

Grant/Contract Number:: AC02-05CH11231

OSTI ID:: 1985810

Journal Information:: Utilities Policy, Journal Name: Utilities Policy Vol. 82; ISSN 0957-1787

Publisher:: ElsevierCopyright Statement

Country of Publication:: United States

Language:: English

References (13)

Characteristics of day-ahead wind power forecast errors in Nordic countries and benefits of aggregation: Characteristics of day ahead forecast errors in Nordic countries Miettinen, Jari Johannes; Holttinen, Hannele Wind Energy, Vol. 20, Issue 6 https://doi.org/10.1002/we.2073	journal	November 2016
Market price behavior of wholesale electricity products: Texas Zarnikau, J.; Woo, C. K.; Zhu, S. Energy Policy, Vol. 125 https://doi.org/10.1016/j.enpol.2018.10.043	journal	February 2019
Deep decarbonization in Northeastern North America: The value of electricity market integration and hydropower Rodríguez-Sarasty, Jesús A.; Debia, Sébastien; Pineau, Pierre-Olivier Energy Policy, Vol. 152 https://doi.org/10.1016/j.enpol.2021.112210	journal	May 2021
Solar and wind grid system value in the United States: The effect of transmission congestion, generation profiles, and curtailment Millstein, Dev; Wiser, Ryan; Mills, Andrew D. Joule, Vol. 5, Issue 7 https://doi.org/10.1016/j.joule.2021.05.009	journal	July 2021
Participation of intermittent renewable generators in balancing mechanisms: A closer look into the Spanish market design Fernandes, Camila; Frías, Pablo; Reneses, Javier Renewable Energy, Vol. 89 https://doi.org/10.1016/j.renene.2015.12.037	journal	April 2016
On the participation of wind energy in response and reserve markets in Great Britain and Spain Edmunds, Calum; Martín-Martínez, Sergio; Browell, Jethro Renewable and Sustainable Energy Reviews, Vol. 115 https://doi.org/10.1016/j.rser.2019.109360	journal	November 2019
Operating reserves in the three most windy U.S. power markets: A technical review Tsai, Chen-Hao Renewable and Sustainable Energy Reviews, Vol. 135 https://doi.org/10.1016/j.rser.2020.110190	journal	January 2021
An intertemporal decision framework for electrochemical energy storage management He, Guannan; Chen, Qixin; Moutis, Panayiotis Nature Energy, Vol. 3, Issue 5 https://doi.org/10.1038/s41560-018-0129-9	journal	April 2018
Changes in the Economic Value of Photovoltaic Generation at High Penetration Levels: A Pilot Case Study of California Mills, Andrew D.; Wiser, Ryan H. IEEE Journal of Photovoltaics, Vol. 3, Issue 4 https://doi.org/10.1109/JPHOTOV.2013.2263984	journal	October 2013
Alternatives No More: Wind and Solar Power Are Mainstays of a Clean, Reliable, Affordable Grid Milligan, Michael; Frew, Bethany; Kirby, Brendan IEEE Power and Energy Magazine, Vol. 13, Issue 6 https://doi.org/10.1109/MPE.2015.2462311	journal	November 2015
Increased Wind Revenue and System Security by Trading Wind Power in Energy and Regulation Reserve Markets Liang, Jiaqi; Grijalva, Santiago; Harley, Ronald G. IEEE Transactions on Sustainable Energy, Vol. 2, Issue 3 https://doi.org/10.1109/TSTE.2011.2111468	journal	July 2011
Methodologies to Determine Operating Reserves Due to Increased Wind Power Holttinen, Hannele; Milligan, Michael; Ela, Erik IEEE Transactions on Sustainable Energy, Vol. 3, Issue 4 https://doi.org/10.1109/TSTE.2012.2208207	journal	October 2012
Ancillary services from wind turbines: automatic generation control (AGC) from a single Type 4 turbine Rebello, Eldrich; Watson, David; Rodgers, Marianne Wind Energy Science, Vol. 5, Issue 1 https://doi.org/10.5194/wes-5-225-2020	journal	January 2020

Similar Records

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

Technical Report · Thu Oct 07 00:00:00 EDT 2021 · OSTI ID:1824782

Survey of U.S. Ancillary Services Markets

Technical Report · Wed Jun 01 00:00:00 EDT 2016 · OSTI ID:1327815

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

Conference · Mon Nov 20 23:00:00 EST 2023 · OSTI ID:2281822

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
ancillary services
electricity markets
hybrids
solar
variable renewable energy
wind

Economic evaluation of variable renewable energy participation in U.S. ancillary services markets

Citation Formats

References (13)

Similar Records

Related Subjects