Browsing by Subject "Electricity market"
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Item Competitive renewable energy zones in Texas : suggestions for the case of Turkey(2012-05) Ogunlu, Bilal; Baldick, Ross; Rai, VarunAs an energy-importing developing country, Turkey depends heavily on imported petroleum and natural gas. The increase in the global petroleum price has affected the Turkish economy adversely in the last decade. Renewable energy is an important alternative in reducing Turkey’s energy dependency. Turkey’s strategies are improving domestic production and diversifying energy sources for the security of supply. New investments, especially in renewables, have been chosen to achieve these objectives. As a model for Turkey, Texas is the leader in non-hydroelectric renewable energy production in the U.S. and has one of the world’s most competitive electricity markets. However, wind generation creates unique challenges for the Electric Reliability Council of Texas (ERCOT), the transmission system operator of Texas. The market environment has forced the Public Utility Commission of Texas (PUCT) to develop unique deregulated energy markets. In 2005, the Texas Legislature passed Senate Bill 20, in part to break the deadlock between transmission and wind generation development. This legislation instructed the PUCT to establish Competitive Renewable Energy Zones (CREZs) throughout the State, and to designate new transmission projects to serve these zones. In this context, first of all, the electricity market development in Turkey is introduced in terms of renewable energy, especially wind power. Next, considering wind power, the progress in the Texas electricity market is investigated. Subsequently, we examine the development of CREZs in Texas from a regulatory perspective and discuss Texas’ policy initiatives, including the designation of CREZs. Finally, we review the impact of wind power on the primary electricity market of Texas and evaluate market conditions and barriers to renewable energy use in Turkey in order to extract suggestions. This experience may be particularly instructive to Turkey, which has a similar market structure on the supply and transmission sides. This study suggests ways that Turkey might handle renewable applications in combination with existing transmission constraints.Item A framework to model and optimize the operation of lithium-ion energy storage in electricity markets, and an assessment of lithium-ion energy storage in Texas(2015-08) Fares, Robert Leo; Webber, Michael E., 1971-; Baldick, Ross; Bickel, James E.; Chen, Dongmei; Edgar, Thomas FThe lithium-ion (Li-ion) battery has become an established technology in portable electronics and electric vehicle applications. At the same time, there is rising interest in grid-based battery energy storage to improve the flexibility of the electric grid and integrate intermittent sources of renewable energy. To provide information for energy storage developers, battery system operators, state policymakers, and the general public, this research develops a framework to characterize, operate, and evaluate Li-ion battery energy storage that is connected to the electric grid and participates in a wholesale electricity market. Methods are developed to characterize and model the voltage, temperature, and capacity degradation behavior of a Li-ion battery system. Then, an optimization program is developed to schedule Li-ion storage in an electricity market while modeling and controlling its operating state and rate of capacity loss. The optimization framework is used to simulate operation of Li-ion storage in Texas’s Electric Reliability Council of Texas (ERCOT) electricity from 2002–2014, and the market revenue potential and operating lifetime of Li-ion storage are approximated. It is shown that controlling capacity degradation in operational management can extend the lifetime of Li-ion battery modules by approximately 30–60% without significantly reducing market revenue potential. To test the reliability impact of distributed Li-ion storage, residential electricity data are used to approximate how long a battery system could isolate downstream electricity customers during an outage. Thousands of outage events are simulated to show the expected islanding duration for outages occurring at different times of day. The potential reliability benefit from avoided residential electric outages is calculated and found to be much smaller than the revenue potential from the electricity market, indicating that market applications should be prioritized over residential reliability applications in siting and operating a battery system. It is found that the net-present value (NPV) of a Li-ion battery system providing wholesale energy arbitrage in the ERCOT market is negative across a range of cost and benefit parameters. However, controlling capacity degradation in operational management of the battery system is found to increase its value by approximately $100/kWh of rated energy capacity. The NPV of a battery system providing a combination of energy and Fast Responding Regulation Service (FRRS) is found to be positive across a wide range of cost and benefit parameters, indicating a Li-ion battery system could most likely provide a combination of energy and FRRS service to the ERCOT electricity market at a profit. Controlling capacity degradation in operational management of the battery system for energy and FRRS is found to have little impact on its NPV. However, controlling capacity loss makes the NPV less sensitive to variation in the lifetime of the battery modules, reducing the risks associated with premature battery cell failure.Item A grid-level unit commitment assessment of high wind penetration and utilization of compressed air energy storage in ERCOT(2014-12) Garrison, Jared Brett; Webber, Michael E., 1971-Emerging integration of renewable energy has prompted a wide range of research on the use of energy storage to compensate for the added uncertainty that accompanies these resources. In the Electric Reliability Council of Texas (ERCOT), compressed air energy storage (CAES) has drawn particular attention because Texas has suitable geology and also lacks appropriate resources and locations for pumped hydroelectric storage (PHS). While there have been studies on incorporation of renewable energy, utilization of energy storage, and dispatch optimization, this is the first body of work to integrate all these subjects along with the proven ability to recreate historical dispatch and price conditions. To quantify the operational behavior, economic feasibility, and environmental impacts of CAES, this work utilized sophisticated unit commitment and dispatch (UC&D) models that determine the least-cost dispatch for meeting a set of grid and generator constraints. This work first addressed the ability of these models to recreate historical dispatch and price conditions through a calibration analysis that incorporated major model improvements such as capacity availability and sophisticated treatment of combined heat and power (CHP) plants. These additions appreciably improved the consistency of the model results when compared to historical ERCOT conditions. An initial UC&D model was used to investigate the impacts on the dispatch of a future high wind generation scenario with the potential to utilize numerous CAES facilities. For all future natural gas prices considered, the addition of CAES led to reduced use of high marginal cost generator types, increased use of base-load generator types, and average reductions in the total operating costs of 3.7 million dollars per week. Additional analyses demonstrated the importance of allowing CAES to participate in all available energy and ancillary services (AS) markets and that a reduction in future thermal capacity would increase the use of CAES. A second UC&D model, which incorporated advanced features like variable marginal heat rates, was used to analyze the influence of future wind generation variability on the dispatch and resulting environmental impacts. This analysis revealed that higher amounts of wind variability led to an increase in the daily net load ramping requirements which resulted in less use of coal and nuclear generators in favor of faster ramping units along with reductions in emissions and water use. The changes to the net load also resulted in increased volatility of the energy and AS prices between daily minimum and maximum levels. These impacts were also found to increase with compounding intensity as higher levels of wind variability were reached. Lastly, the advanced UC&D model was also used to evaluate the operational behavior and potential economic feasibility of a first entrant conventional or adiabatic CAES system. Both storage systems were found to operate in a single mode that enabled very high utilization of their capacity indicating both systems have highly desirable characteristics. The results suggest that there is a positive case for the investment in a first entrant CAES facility in the ERCOT market.Item Valuation of an advanced combined cycle power plant and its cost of new entry (CONE) into the ERCOT market(2014-08) Zaborowski, Jeremy Ronald; Webber, Michael E., 1971-The Texas ERCOT market is one of the most open, deregulated electricity markets in the world. This open market brought electricity costs down for Texas residents and businesses, creating a much more competitive economic climate. However, these low prices currently generate insufficient revenue for generators to finance construction of new or replacement generation assets. In the instance of combined cycle advanced natural gas, the Independent Market Monitor 2012 annual report estimated that a plant needed to generate 2.5 times as much as revenue it did in 2012 to incent new generation. This author argues that while the gap is still significant, the continuous changes to the ERCOT market since its inception make an historical examination like that used by the IMM less accurate. New market rules such as price caps or changes in fuel markets through new technologies like hydraulic fracturing create a very different valuation gap than a model based on historical activity alone. This analysis attempts to get a more accurate approximation of the gap through the use of publicly traded futures contracts for natural gas and electricity. Electricity futures reflect market expectations of revenue based on current and future market rules. Gas futures reflect price expectations in light of market changes like fracturing, potential LNG exports, and other changes. Financial positions can be maintained in both markets to give a fixed rate of return. Using this method, one can create a very conservative valuation model that still more accurately reflects market sentiment. This thesis starts with a brief history of ERCOT deregulation from the early 2000s to present in order to clarify for the reader the changes that have taken place in the market. It then demonstrates the futures-valuation model using an advanced combined cycle power plant as an example.Item Wind energy in Turkey : potential and economic viability(2011-05) Korkulu, Zafer; Groat, Charles G.Turkey wants to encourage renewable electricity generation to reduce dependence on imported natural gas and meet its highly growing power demand. The government’s objective is to increase the share of renewable resources in electricity generation to at least 30 percent by 2023, and the specific target for the installed wind energy capacity is 20 GW by that date. Fortunately, Turkey has an enormous wind energy potential to exploit for electricity generation. When from “good” to “outstanding” wind clusters are taken into account, the overall technical wind power generation capacity in Turkey is calculated to be nearly 48 GW. In this context, this thesis investigates whether policy instruments in the Turkish regulatory frame contribute to economic viability for wind power projects or not. The financial results point out that an electricity price of 7.3 USD cent/kWh, which is the guaranteed price for wind power generation by current regulations, does not make a typical onshore wind power plant located in a “good” windy resource economically viable. However, when locally produced wing blades and turbine towers are used in the project, the purchase price increases to 8.7 USD cent/kWh, and the project becomes economically viable. As a result, the local content element introduced in recent regulations promotes wind energy investments and helps government to reach its renewable target for 2023.