Arne Olson

The Impact of Wind Generation on Wholesale Electricity Prices in the Hydro-Rich Pacific Northwest

Extant literature documents that wind generation can reduce wholesale electricity market prices by displacing conventional generation. But how large is the wholesale price effect of wind generation in an electricity market dominated by hydroelectric generation? We explore this question by analyzing the impact of wind generation on wholesale electricity prices in the Pacific Northwest region of the United States. This hydro-rich system tends to be energy-limited, rather than capacity-constrained, with its marginal generation during the hydro runoff season often a hydro unit, instead of a natural-gas-fired unit. We find that increased wind generation reduces wholesale market prices by a small, but statistically-significant, amount. While a hydro-rich system can integrate wind generation at a lower cost than a thermal-dominated region, the direct economic benefits to end-users from greater investment in wind power may be negligible.

Halfway There: Can California Achieve a 50% Renewable Grid?

California is famous for the sun, wind, and waves that draw millions of visitors and thousands of new residents each year. But can Californias most famous natural resources power half of its electric grid? The state may soon find out. In the inaugural address for his record fourth term in office, California Governor Jerry Brown set a goal of deriving 50% of electricity from renewable resources by 2030, as part of a continuation of Californias efforts to reduce greenhouse gas (GHG) emissions.

REFLEX: An Adapted Production Simulation Methodology for Flexible Capacity Planning

As intermittent energy resources become more significant in power production, traditional capacity planning may be insufficient to ensure reliable system operation. A system planner must ensure that flexibility solutions are available to respond to large and uncertain ramping events. These solutions may be operational, such as improved unit commitment and dispatch, curtailment of renewables, or demand response; procurement based, such as new fast ramping resources or batteries; or involve market reform. This paper outlines a new methodology for modeling the economic tradeoffs in implementing flexibility solutions for integrating renewables. The proposed model includes both a stochastic treatment of system states to account for a wide range of operating conditions and an adapted production simulation methodology that weighs the cost of reliability and subhourly flexibility violations against the cost of the operational flexibility solutions available to mitigate them. The models functionality is demonstrated with a case study of California at a 50% RPS in 2030. The model tests the value of 1088 MW of generic flexible units, relative to the same capacity of must-run resources, finding an expected annual value of

Market Power Mitigation and Energy-Limited Resources

347±42 million/yr. Potential applications of the model for resource planning and procurement are also discussed.

Efficient frontiers for electricity procurement by an LDC with multiple purchase options

Abstract FERC’s Standard Market Design takes aim at the problem of withholding by proposing automated mitigation procedures (AMP) as a tool to prevent the exercise of market power. However, only “light-handed” AMP with bid caps based on opportunity costs and no must-offer requirement will result in efficient operations of energy-limited resources.