Monday, November 19, 2012

Light Pricing

  • At the network level the reliability of a solar power forecast should eventually play into new reserve requirement rules. It stands to reason that a solar heavy grid with a cloudy forecast would need to carry a higher reserve percentage than the same grid with a clear sky forecast. Higher reserve requirements mean higher costs.
  • If end-users manage their loads to avoid cloudy hours that has the effect of dampening demand. Dampened demand counters the upward pressure on prices due to reduced supply.
  • If loads seek out sunny hours where there's presumably cheaper electricity the increase in demand counters the downward pressure on prices.
  • These effects balance each other nicely. Solar availability is effectively a proxy for price. You end up with Light Pricing.
  • Could you use the expected load and price patterns along with unit commitment rules to project which power plants are going to be removed in Power System Jenga? I suspect you could project the next few plants but not too far forward. Not enough is known about load shifting.
  • It occurs to me you could model a range of scenarios with made up numbers for your load shifting capability. That would be a dangerously fun way to play Power System Jenga far into the future.

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