ORIGINAL REPORTING: Technology, markets and contracts — The keys to profiting from California's duck curve
Technology, markets and contracts — oh my! The keys to profiting from California's duck curve; California policymakers look to address renewables over-generation through smart investments in supply- and demand-side resources.
Herman K. Trabish, Oct. 30, 2017 (Utility Dive)
Editor’s note: California’s tense debates over the costs of the recent wildfires and the exploding customer choice movement are impeding the transition reported here.
California’s grid operator and other energy sector stakeholders want to use the wholesale power market to transform the state’s renewables over-generation from a problem to a solution by aligning technology, markets and contracts and through better long-term planning. Recent average wholesale electricity market price fluctuations reveal a growing burden for the California Independent System Operator (CAISO). In 2016, the price during midday hours was about $18/MWh and spiked to $35/MWh during peak demand, according to Energy Department January to June data. This year, the midday price fell below $15/MWh and spiked to nearly $60/MWh at the peak.
The price differentiation follows CAISO’s load through the fluctuations of the now well-known duck curve. Prices are lowest when midday demand falls off but rise sharply as demand spikes later in the day. California’s 6,000 MW of rooftop solar exacerbate the load and price drop-offs that lead to the real concern — the need to meet the long, high ramp-up to peak demand. California policymakers and others during an Oct. 18 session, Unlocking California's renewables "dividend," at CAISO’s 2017 Stakeholder Symposium, argued smart investments in supply and demand can turn these dynamics from costs to dividends. CAISO can develop resources to use the midday over-generation, flatten the ramp and lower the peak. Doing so, they said, can bring California lower electricity prices, a stronger economy, healthier air and reduced greenhouse gas emissions… click here for more
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