Variable Renewable Energy Participation in U.S. Ancillary Services Markets: Economic Evaluation and Key Issues
- 3rdRail Inc., Berkeley, CA (United States)
- Lawrence Berkeley National Lab. (LBNL), 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 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.
- Research Organization:
- Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
- Sponsoring Organization:
- USDOE Office of Energy Efficiency and Renewable Energy (EERE)
- DOE Contract Number:
- AC02-05CH11231
- OSTI ID:
- 1824782
- Country of Publication:
- United States
- Language:
- English
Similar Records
Survey of U.S. Ancillary Services Markets
Capacity Payments in Restructured Markets under Low and High Penetration Levels of Renewable Energy