Electricity trades across regions can save money, but market inefficiencies can erode those savings. A new study from @BerkeleyLab finds $1.23 billion a year in gross savings were offset by $551 million of uneconomic transactions. 🧵 🔌 💡 1/x
Dig into the details👇️ 👇️
doi.org/10.1177/0195...
The study covers approximately 50 GW of transfer capacity, roughly 60% of national transfer capacity. The sample suggests that the potential savings would be potentially much larger if changes were implemented nation-wide.
One unique aspect about this study is its wide temporal and geographic scope. While previous studies and market monitors have documented inefficiencies in specific market seams, this study is the first with coverage across many regions, using unified and well documented methods.
That said, improving interregional coordination is challenging, and would incur costs. Potential strategies to improve coordination are discussed in the paper. The goal of our study was to quantify the opportunity, not to estimate the costs of meeting the coordination challenge.
One important aspect of the study is that it focuses on cost savings that could derive from operational changes to the current infrastructure, by changing software and policies, NOT hardware. These savings could be achieved while avoiding the challenges of building new TX lines
The value was lost due to uneconomic transactions in other hours, resulting in a net savings of $680 million per year but much of this value, and more – up to $790 million – could be gained by improving how interregional trade is coordinated.
In the new paper, we find opportunity for substantial savings through improved operations. In the last 10 yrs, Interregional electricity transfers saved $1.2 billion per year by moving energy from lower to higher-priced regions,but almost half of the value of these gains was lost
The focus on operations is a departure from our past work which, in contrast, focused on the potential value of building new transmission. Key takeaway: we could be doing (much) better in optimizing the use of existing transmission infrastructure.
⚡️ New LBNL article out on interregional electric transmission ⚡️
We explore how interregional transmission has been operated in the U.S. (2014 – 2023) by tracking interregional trade and market prices. Open access, in The Energy Journal: doi.org/10.1177/0195... 🧵 👇️
And check out some of the earlier papers from this 3-year research effort below, also open-access:
www.sciencedirect.com/science/arti...
www.sciencedirect.com/science/arti...
One of the key outcomes of peer review was to think more about how storage degradation might impact the calculus of the above findings. You'll have to download the full paper to find out! 🙂
www.sciencedirect.com/science/arti...
💡 Allowing grid charging largely eliminates need to hold storage in reserve.
💡 Higher reserve levels may increase total customer value for customers with an exceptionally high value of lost load, living in areas with exceptionally frequent power interruptions
💡 Total customer value tends to be greatest when reserves are set as low as allowed
💡 Reliability value is (surprisingly) insensitive to storage reserve level under most conditions.
💡 Bill savings drop precipitously with higher storage reserves
This study evaluates a key operational tradeoff for homeowners: the more storage capacity held in reserve, the greater the customer’s ability to ride through power interruptions, but less capacity is then available to manage utility bills on a day-to-day basis. Key highlights:
🔌 New Journal Article Alert 🔌
Backup power or bill savings? How electricity tariffs impact residential solar-plus-storage usage in the United States
I'm happy to announce has recently been published, open-access, in Utilities Policy 👇
www.sciencedirect.com/science/arti...
Lots of interesting findings in the paper, and still much more to do to in this area of work.
Check it out: doi.org/10.1038/s414...
In some cases, we found that it would be most valuable for electricity to flow only one direction. However, in many cases, especially for interregional lines, we found a more balanced situation where its valuable for electricity to flow different directions at different times.
We can identify factors that commonly occur during the hours in which Trans is highly valuable. “Unforeseen intraday variation,” which means there was either a sizeable error in a day-ahead forecast or an unexpected infrastructure outage, is particularly correlated with value!
We use recorded wholesale market prices to answer questions of where, when, and why additional TX would or would not have been valuable, and include new methods to estimate potential TX market values and compare these value estimate to independently published cost estimates.
💡 New Transmission Paper alert 💡
“Electric transmission value and its drivers in United States power markets” just went live in Nature Communications! Kudos especially to Julie Mulvaney Kemp for getting this work to the finish line.
doi.org/10.1038/s414...
For even more information, see our landmark research on the interconnection queues, in the report Queued Up. Find also recorded webinars, interactive data sets, and more, at https://buff.ly/3E9tY1q.
And as always, please reach out to our team if you have any questions!
A big factor is the cost of network upgrades, which are often billed to project developers to overcome transmission constraints. The wide range of interconnection costs across the country and by situation illustrates the uncertainty and lack of uniformity of the process.
Interconnection costs have risen over time. Projects withdrawn in recent years had costs 23% greater than the preceding 5 years and more than double those before 2014. Costs are much greater for withdrawn projects ($373/kW) than for those that completed iX studies ($73/kW)
Massive growth in interest to develop new generation technologies has led to the queue backlog. Since 2010 the queue has grown >5X and the process length has doubled.
This allows us to better understand the dynamics and what solutions may be available. See some of our key findings summarized below 👇👇
Our team at LBNL has been analyzing and assessing the massive backlog for grid interconnection for awhile now, collecting data on both the costs and the backlog but always analyzing them separately. In the new article we aim to combine all of our data into one analysis narrative!
⚡ 🔌ICYMI a new article has been published in Joule regarding interconnection hurdles ⚡ 🔌
Check out the article below 👇👇 “Grid connection barriers to renewable energy deployment in the United States."
https://buff.ly/3WuXOng
