DUMPING ENERGY Renewable Energy, Cost-Effective Curtailment and Remediating Negative Pricing Conditions

Transcription

1 CONFERENCE DUMPING ENERGY Renewable Energy, Cost-Effective Curtailment and Remediating Negative Pricing Conditions July 11 12, 2018 Marriott Minneapolis City Center Minneapolis, MN POST-CONFERENCE WORKSHOP Critical Elements of Ancillary Services Market Design and Flexible Ramping Products FRIDAY, JULY 13, 2018 TAG US #EUCIEvents FOLLOW EUCI is authorized by IACET to offer 1.5 CEUs for the conference and 0.4 CEUs for the workshop

2 OVERVIEW The surplus generation of renewable energy resources wind, solar and in some cases, hydro that exceeds the ability of the power system to deploy the energy available, is increasingly resulting in incidences of curtailment. These episodes of turning off the spigot can be the source of great consternation among project developers, utilities and renewable resource advocates. Rejection of available renewable energy is counterintuitive. In the face of vigorous de-carbonization efforts, expanding renewable portfolio mandates, tax and other incentives to stimulate greater renewable energy production, why would free, clean and green fuelsourced power be dismissed at certain times? This seeming contradiction is present where renewable and distributed energy resources proliferate in a few areas of North America today; tomorrow, it is likely to be widespread. The problem remains that when more renewable energy is available than can be absorbed by the system, grid stability suffers and real-time market performance erodes. These system conflicts can be reduced through other measures, such as transmission capacity expansion, market enlargement, storage, and flexibility improvements in baseload generation resources. At present, though, these options are either jurisdictionally, technically or economically infeasible. That leaves curtailment as one of the few, remaining, plausible methods for shedding this orphan power. This program will examine the power system issues associated with renewable energy over-production relative to load and system capacity. It will review what tools are available to minimize these impacts, devoting particular attention to curtailment. The symposium will also consider ways that curtailment is being addressed today, how market and bilateral transactions are adapting compensation to accommodate curtailment, case studies of active network management of curtailment in the U.S. and Europe, and how renewable energy goals are achievable if curtailment is deployed. LEARNING OUTCOMES Discuss challenges associated with surplus renewable energy on the grid Review economic and financial impacts of variable renewable energy on wholesale power markets Evaluate options to address surplus renewable energy output Examine optimization of economic outcomes through curtailment Assess examples of active network management of renewable energy generation Analyze whether overbuilding capacity and curtailing excess production can still result in renewable energy goals attainment Discuss adapting market compensation to accommodate curtailment Identify negative pricing patterns in wholesale energy markets Discuss case studies of market participants favored and dis-favored by negative pricing Assess project developer perspectives of negative pricing and possible remedies ATTENDEE COMPOSITION Representative Organizations Independent power producers (IPPs) Load-serving entities (LSEs) and utilities Local distribution companies (LDCs) Merchant power ventures Merchant transmission providers Wholesale trading companies Power marketers Energy service companies (ESCOs) Smart grid resource providers Demand response providers/aggregators Large energy customers Consumer advocates Regulatory counsel State regulatory staff Department Areas Generation bidding Scheduling Asset management Marketing and business development Financial marketers Power trading Power supply analyst Contract administrators and analysts Energy management Revenue assurance Energy operations and supply Retail load supply Structured power Bulk power Energy finance and analysis Confirmation administration Procurement management PAGE 2

3 AGENDA WEDNESDAY, JULY 11, :30 9:00 am Registration and Continental Breakfast 9:00 9:15 am Program Overview 9:15 10:30 am Challenges Associated with Too Much of a Good Thing Surplus Power Impacts on power system o Grid stability issues o Reduced Power quality o Negative pricing o Disruptive effect on existing thermal fleet o Disincentive for additional renewable energy development Jeff Smith, Senior Program Manager Power System Studies, Electric Power Research Institute (EPRI) 10:30 10:45 am Morning Break 10:45 am 12:00 pm Impacts of Variable Renewable Energy on Wholesale Power Markets Observed historical impacts of wind and solar on annual average wholesale prices Impacts of other trends on wholesale prices, including natural gas prices and customer load Past and recent impacts of wind and solar on temporal and geographic pricing patterns Growth in negative wholesale prices, and trends in wind and solar curtailment Modeled effects of increased wind and solar penetration on average wholesale prices Consequences of increased wind and solar penetration on temporal patterns of prices Implications for profitability of wind and solar as well as conventional thermal assets Dr. Ryan Wiser, Senior Scientist and Group Leader Electricity Markets and Policy Group, Lawrence Berkeley National Laboratory (LBNL) 12:00 1:00 pm Group Luncheon 1:00 2:00 pm Evaluating Options to Address Surplus Renewable Energy Output Transmission capacity expansion Market enlargement Storage Demand response Time of use rates Flexibility improvements in baseload generation resources Curtailment Paul Denholm, Principal Energy Analyst, National Renewable Energy Laboratory (NREL) 2:00 3:00 pm Focus: Optimizing Economic Outcomes through Curtailment Identifying the lowest-cost generation solution Why curtailment is the [least worst/best] path to take under present conditions Will there be a tipping point for (an)other path(s) to supersede curtailment? o Relevant strike economics of alternative remedies Morgan Putnam, Director, Clean Power Research John Sterling, Director Market & Policy Affairs, First Solar 3:00 3:15 pm Afternoon Break PAGE 3

4 AGENDA WEDNESDAY, JULY 11, 2018 (CONTINUED) 3:15 4:15 pm Opportunities and Challenges with Utilizing Curtailment on the Distribution Grid Overview of the technical issues that one can solve with curtailment o Discussion of hosting capacity and technical screens Update on timing of IEEE 1547 and alignment with IEEE and UL1741 o Some discussion of the ease with which existing inverters can be updated (e.g., inverters made after 20XX can be updated through a firmware update) With 1547 curtailment possible by 20XX, there are regulatory and market issues with utilizing curtailment to its full potential o Implications of the utility s requirement to serve and possible modifications to address curtailment of distributed generation o Administrative vs. market-based settlement mechanisms Nadav Enbar, Principal Project Manager, Electric Power Research Institute (EPRI) 4:15 5:30 pm Active Network Management of Renewable Energy Generation Rapid development of wind energy in Scotland over the past decade led to exhaustion of the available static capacity of the distribution systems to which these projects were connecting. Once capacity in good wind resources was used up, the traditional route would have led to reinforcement of the system. However, through the development of innovation in the form of real-time monitoring and controls including curtailment and reactive power management and associated connection agreements to manage this new approach to integrating renewables to the system, the UK was able to greatly increase the amount of generation connected to the same system. The presentation will provide extensive background on the methods used in the UK and will tie this to current initiatives underway in Minnesota state to address their own challenges to meet the state s renewable energy targets. Chad Abbey, Global Head Consultancy, Smarter Grid Solutions (SGS) 5:30 pm Program Adjourns for Day THURSDAY, JULY 12, :30 8:00 am Continental Breakfast 8:00 9:15 am Panel on Curtailment and Interconnection The link between curtailment and accommodating increased renewable energy generation on the power grid is both non-intuitive and highly polarized. Beyond overcoming the stigma often associated with curtailment, it also entails a number of complex technical and commercial consequences, not to mention an entirely different approach to operation of the distribution system. Drawing on expertise across the concerned stakeholders and different jurisdictions tackling with these issues, the expert panel will address many of the hurdles and competing technologies that challenge the adoption of curtailment and related smart grid controls for integration of renewable energy. Moderator Chad Abbey, Global Head of Consultancy, Smarter Grid Solutions (SGS), Smarter Grid Solutions Panelists Joe White, Section Manager Smart Grid Technology Engineering, Orange and Rockland Steven Steffel, Manager Distributed Energy Resources Planning and Analytics, PEPCO Brian Conroy, Director Network Projects & Initiatives, Avangrid 9:15 10:30 am Achieve Renewable Energy Goals by Overbuilding Capacity and Curtailing Excess Production Introduce the MN Solar Pathways Project The key challenge to >70% renewables addressing sustained periods of low production How curtailment addresses periods of low renewables production Why load shifting can t provide the same benefits Trading off curtailment against production from stranded coal and gas assets Morgan Putnam, Director, Clean Power Research Marc Perez, Consultant, Clean Power Research PAGE 4

5 AGENDA THURSDAY, JULY 12, 2018 (CONTINUED) 10:30 10:45 am Morning Break 10:45 am 12:00 pm Adapting Compensation to Accommodate Curtailment Ways that curtailment is being addressed today o US market overview o Germany New ways to compensate asset owners that provide them with long-term stability What does it cost to consume electricity that would have otherwise been curtailed? Pricing in capacity markets o Negative power pricing and other market effects o Impact on different market players Rao Konidena, Principal Advisor Policy Studies, Midcontinent ISO (MISO) Guillermo Bautista Alderete, Director of Market Analysis & Forecasting Market Quality & Renewable Integration, California ISO (CAISO) Mihir Desu, Manager, Strategen Consulting 12:00 1:15 pm Group Luncheon 1:15 2:15 pm The Other Side of the Curtailment Coin : Negative Pricing Patterns in Wholesale Energy Markets Negative price conditions are more pervasive and persistent as rapidly falling energy prices for wind and solar resources compete against higher cost energy resources in the wholesale markets. Merchant generators, utilities, system operators, and project developers each have their distinct challenges with this phenomenon and how best to adapt to the unprecedented new market dynamics this creates. This segment will review the negative pricing conditions in wholesale power markets where high renewable energy penetration currently exists or where such consequences are likely to emerge in the future: CAISO ERCOT MISO Joseph Cavicchi, Executive Vice President, Compass Lexecon 2:15 3:30 pm Case Studies of Market Participants Favored and Dis-favored by Negative Pricing Favored Solar in Calif EIM Hydro in CAISO Dis-favored Solar in CAISO Wind in MISO Gas in ERCOT Joseph Cavicchi, Executive Vice President, Compass Lexecon 2:45 3:00 pm Afternoon Break 3:00 4:30 pm Project Developer Perspectives of Negative Pricing and Possible Remedies Valuing the impact on new renewable energy production Valuing the impact on acquired renewable energy production Valuing the impact on thermal/baseload energy production Valuing the impact of storage John Sterling, Director Market & Policy Affairs, First Solar Brian Conroy, Director Network Projects & Initiatives, Avangrid Mihir Desu, Manager, Strategen Consulting 4:30 pm Program Adjournment PAGE 5

6 POST-CONFERENCE WORKSHOP Critical Elements of Ancillary Services Market Design and Flexible Ramping Products FRIDAY, JULY 13, :30 8:00 am Registration and Continental Breakfast 8:00 11:45 am Workshop Timing OVERVIEW The emergence of renewable and variable energy resources has drawn attention to the supplemental services beyond the basics of energy, generating capacity, and power delivery that bulk-power systems and balancing areas require to ensure grid stability. Some of these ancillary services (such as regulation and reactive power) are required during normal operations to maintain the necessary balance between generation and load in real-time and maintain voltages within the required ranges. Other ancillary services (such as contingency reserves) provide insurance to prevent minor problems from becoming full-scale catastrophes or to restore the bulk-power system to normal operations after a major outage occurs. To deal more effectively with the growing importance of deploying these ancillary services (AS), independent system operators (ISOs) and other bulk power systems are refining their approach to recognize and compensate market participants for offering these AS into the market. Therefore, it s imperative that market participants have a clear understanding of what and how they need to interact with these AS market mechanisms. This workshop will explain the functions performed by each ancillary service with a focus on the real-power services. It will also provide an in-depth treatment of three features of ancillary service market design: 1. Co-optimization in the scheduling and dispatch of energy and ancillary services 2. The theory and practice of reserve and regulation shortage pricing 3. Market design approaches to scheduling and pricing ramp capability Attendees will leave this program with a clear understanding of what functions these services provide, why they are important, their cost components and available market participant bidding opportunities. LEARNING OUTCOMES Review what functions ancillary services provide Discuss why these ancillary services are important Examine the cost components associated with ancillary services Available market participant bidding opportunities PAGE 6

7 WORKSHOP AGENDA FRIDAY, JULY 13, :00 11:45 am Workshop Timing I. Overview of Ancillary Services Pricing II. Co-optimization of Energy and Ancillary Services a. Why is co-optimization needed for economic efficiency? b. How does co-optimization work? III. Reserve and Regulation Shortage Pricing a. Overview of Alternative Scarcity Pricing Mechanisms b. The advantages of reserve shortage pricing c. How does reserve shortage pricing work - Determining energy prices in markets with reserves shortage pricing and co-optimized energy and ancillary service markets d. ERCOT s operating reserve demand curve e. Ramp constraints, price spikes and regulation shortage values f. The role of scarcity pricing in markets with capacity requirements IV. Ramping Products a. Evolving need for ramping products b. CAISO Flexible Ramping Product c. MISO Ramp Capability Model WORKSHOP INSTRUCTOR Joseph Cavicchi Executive Vice President, Compass Lexecon Joseph Cavicchi is executive vice president with Compass Lexecon (Boston), an FTI Company. He provides wholesale and retail electricity market regulatory economic analyses in connection with the restructuring of the US electricity industry. In particular, he advises clients in a variety of Federal Energy Regulatory Commission (FERC) and state regulatory proceedings, and files testimony and affidavits supported by economic analyses. His work focuses extensively on analyzing the competitiveness of the U.S. wholesale electricity markets and developing an in-depth understanding of the operations of the wholesale markets. Mr. Cavicchi s work also involves conducting wholesale market power screens, analyzing the competitive impact of mergers and acquisitions, and overseeing the development of complex analytical modeling to assess electricity system operations. PAGE 7

8 INSTRUCTIONAL METHODS PowerPoint presentations and case studies will be used in program. REQUIREMENTS FOR SUCCESSFUL COMPLETION Participants must sign in/out each day and be in attendance for the entirety of the conference to be eligible for continuing education credit. IACET CREDITS EUCI has been accredited as an Authorized Provider by the International Association for Continuing Education and Training (IACET). In obtaining this accreditation, EUCI has demonstrated that it complies with the ANSI/IACET Standard which is recognized internationally as a standard of good practice. As a result of their Authorized Provider status, EUCI is authorized to offer IACET CEUs for its programs that qualify under the ANSI/IACET Standard. EUCI is authorized by IACET to offer 1.5 CEUs for this conference and 0.4 CEUs for the workshop EVENT LOCATION A room block has been reserved at the Marriott Minneapolis City Center, 30 South 7th Street, Minneapolis, MN 55402, for the nights of July 10-12, Room rates are US $189 plus applicable tax. Call for reservations and mention the EUCI event to get the group rate. The cutoff date to receive the group rate is June 19, 2018 but as there are a limited number of rooms available at this rate, the room block may close sooner. Please make your reservations. REGISTER 3, SEND THE 4TH FREE Any organization wishing to send multiple attendees to this conference may send 1 FREE for every 3 delegates registered. Please note that all registrations must be made at the same time to qualify. SPONSORSHIP OPPORTUNITIES Do you want to drive new business through this event s powerful audience? Becoming a sponsor or exhibitor is an excellent opportunity to raise your profile before a manageably sized group of executives who make the key purchasing decisions for their businesses. There is a wide range of sponsorship opportunities available that can be customized to fit your budget and marketing objectives, including: Platinum, gold, or VIP sponsor, Reception host, Networking break host, Tabletop exhibit, Workshop sponsor, Lanyard sponsor, Luncheon host and Breakfast host. Please contact Stephen Coury at scoury@euci.com or for more information. PAGE 8

9 PLEASE SELECT p: f: SPECIAL BUNDLE PRICE: DUMPING ENERGY: RENEWABLE ENERGY, COST-EFFECTIVE CURTAILMENT AND REMEDIATING NEGATIVE PRICING CONDITIONS CONFERENCE AND POST-CONFERENCE WORKSHOP JULY 11 12, 2018: US $1895 Early bird on or before June 22, 2018: US $1695 Please make checks payable to: PMA" EVENT LOCATION A room block has been reserved at the Marriott Minneapolis City Center, 30 South 7th Street, Minneapolis, MN 55402, for the nights of July 10-12, Room rates are US $189 plus applicable tax. Call for reservations and mention the EUCI event to get the group rate. The cutoff date to receive the group rate is June 19, 2018 but as there are a limited number of rooms available at this rate, the room block may close sooner. Please make your reservations. DUMPING ENERGY: RENEWABLE ENERGY, COST-EFFECTIVE CURTAILMENT AND REMEDIATING NEGATIVE PRICING CONDITIONS CONFERENCE ONLY JULY 11 12, 2018: US $1495 Early bird on or before June 22, 2018: US $1295 POST-CONFERENCE WORKSHOP ONLY JULY 12, 2018: US $595 Early bird on or before June 22, 2018: US $495 I'M SORRY I CANNOT ATTEND, BUT PLEASE ME A LINK TO THE CONFERENCE PROCEEDINGS FOR US $395 How did you hear about this event? (direct , colleague, speaker(s), etc.) Print Name Job Title Company What name do you prefer on your name badge? Address City State/Province Zip/Postal Code Country Phone List any dietary or accessibility needs here CREDIT CARD INFORMATION Name on Card Billing Address Account Number Billing City Billing State Exp. Date Security Code (last 3 digits on the back of Visa and MC or 4 digits on front of AmEx) Billing Zip Code/Postal Code OR Enclosed is a check for $ to cover registrations. Substitutions & Cancellations Your registration may be transferred to a member of your organization up to 24 hours in advance of the event. Cancellations must be received on or before June 8, 2018 in order to be refunded and will be subject to a US $ processing fee per registrant. No refunds will be made after this date. Cancellations received after this date will create a credit of the tuition (less processing fee) good toward any other EUCI event. This credit will be good for six months from the cancellation date. In the event of non-attendance, all registration fees will be forfeited. In case of course cancellation, EUCI s liability is limited to refund of the event registration fee only. For more information regarding administrative policies, such as complaints and refunds, please contact our offices at at (201) EUCI reserves the right to alter this program without prior notice. PAGE 9