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


Meeting Description:
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 we only highlight qualitatively the possible impact of these altered price patterns on other demand- and supply-side electric sector decisions in this publication, 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.
Details
Date: Wed, May 23, 2018
Time: 10:00 AM PDT
Duration: 1 hour
Host(s): Joachim Seel
 Presenter Information
Joachim Seel
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Dr. Joachim (Jo) Seel is a Scientific Engineering Associate at the Electricity Markets and Policy Group at the Lawrence Berkeley National Laboratory. His research focuses on solar and wind market developments, the integration of high shares of intermittent and distributed renewable generation into the electricity grid, and associated effects on electricity markets. He presented in front of the California Governor, the California Energy Commission, the California Public Utilities Commission and at academic and industry conferences.

Joachim Seel holds a PhD and MS of Energy and Resources and a Master in Public Policy from UC Berkeley. A native of Hamburg, Jo came to the Bay Area from the international Jacobs University in Germany, where he studied environmental policies and international relations.


Andrew Mills
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Dr. Andrew D. Mills is a Research Scientist in the Electricity Markets and Policy Group at Lawrence Berkeley National Laboratory. Andrew conducts research on the integration of variable generation into the electric power system, evaluating the costs, benefits, and institutional needs of renewable energy transmission and other supporting infrastructure.

Andrew's has published his research in IEEE Transactions on Sustainable Energy, IEEE Journal of Photovoltaics, Wind Energy, and Energy Policy among other journals. He was a contributing author to the IPCC Contribution of Working Group III to the Fifth Assessment Report and Special Report on Renewable Energy Sources and Climate Change Mitigation.

Andrew has a Ph.D. and M.S. in Energy and Resources from UC Berkeley and a B.S. in Mechanical Engineering from the Illinois Institute of Technology.