EIA Releases Construction Cost Data for Generators

Posted on June 9, 2016 by Jessica Bell

The U.S. Energy Information Administration (EIA) recently issued a report that details construction costs for new electric generators at utility-scale power plants installed in 2013.  Most new capacity in 2013 was from natural gas, with average construction costs of $965 per kW of installed nameplate capacity.  Solar construction costs averaged $3,705 per kW, and wind averaged $1,895 per kW.  The report also includes information on biomass, hydro, geothermal, and petroleum liquid generation.

EIA notes that, of course, construction costs alone are not the only financial factor; depending on the generation type, fuel costs can be substantial.  Utilization rates also factor into overall economics.

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FERC Approves Aggregation of Distributed Energy Resources in CAISO

Posted on June 7, 2016 by Jeff Bayne

One of the key drivers in the push for grid modernization is the rise of distributed energy resources (DERs). DERs are generally smaller power generators, and their small size has created challenges to the integration of these resources into the grid.  On June 2, 2016, the Federal Energy Regulatory Commission (FERC) issued an order accepting tariff revisions proposed by the California Independent System Operator Corporation (CAISO) that facilitate the participation of aggregations of DERs in CAISO’s energy and ancillary services markets.

Previously, CAISO required a minimum size of 0.5 MW for a resource to participate in its markets. The revisions approved of by FERC, according to CAISO, create an initial framework for small DERs to aggregate in order to overcome this threshold.

This initial framework establishes “DER Providers” as a new type of market participant in CAISO. DER Providers will aggregate small DERs, such as distributed generation, energy storage, and plug-in electric vehicle charging stations.  This aggregation, rather than individual DERs, will be treated as a market resource.  The proposal approved by FERC states that individual units that are 1 MW or greater cannot be aggregated through a DER Provider.  In addition, each aggregation of DERs must be greater than 0.5 MW and no larger than 20 MW.

DERs that participate in retail programs, such as net metering, will not be able to also participate in a wholesale market aggregation.  As CAISO explained, under California’s current net energy metering program, such resources apply excess energy against later electricity bills and thus do not have any energy left to offer into the CAISO markets.

While FERC approved the framework proposed by CAISO, it did so subject to several conditions. In addition to certain revisions that CAISO must file within thirty days, in six months CAISO must submit an information report that includes, among other things, the number of DER aggregations that have requested to participate in the CAISO market and the status of those requests.  CAISO must also conduct market performance reviews of DERs on an annual basis for the next three years.

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NACAA Releases Guidance on Model State CPP Implementation Plans

Posted on June 2, 2016 by Anjali Patel

Yesterday, June 1, 2016, the National Association of Clean Air Agencies (NACAA) released Implementing EPA’s Clean Power Plan: Model State Plans.  The document provides a toolbox of implementation options and model regulatory language to support states and stakeholders with navigating the process of developing CPP implementation plans.  The document acknowledges the judicial stay on the CPP, but recognizes that the tools provided “can be most helpful” to states that are continuing to plan for potential CPP implementation.

The document is divided into three parts.  The first section, “An Overview of State Plan Requirements and Strategic Planning Decisions,” provides an overview of the power sector, power sector regulation, and the Clean Power Plan.  It also discusses components that are required to be in state implementation plans and identifies the key decision points for state regulators.

The second section, “The Primary Plan Types and Example Plan Provisions,” provides greater technical detail and illustrative examples related to three potential compliance approaches: a rate-based approach, a mass-based approach, and a mass-based state measures approach.  This section also includes sample rule language.

The third section, “Comprehensive Model State Plan Submittals,” provides full model initial and final state plan submittals.  The model plans presented are based on a mass-based emission standard and incorporate an interstate trading platform and a “new source complement.”  The new source complement integrates additional mass emissions from a state’s election to regulate new sources under state law.

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ISO New England Launches Real-Time Dispatch for Wind, Intermittent Hydro

Posted on June 2, 2016 by Amber Martin

On Wednesday, June 1, 2016, ISO New England (ISO-NE) announced it has begun electronically dispatching wind and intermittent hydro resources interconnected to the New England grid through the implementation of its Do Not Exceed (DNE) Dispatch Project.  Until now, variable resources like wind and intermittent hydro were unable to respond to ISO-NE’s electronic dispatch instructions like conventional generators due to their reliance on fluctuating weather or river flow conditions.  Instead, ISO-NE permitted wind and intermittent hydro to run at-will under normal grid conditions and provided manual curtailment instructions when necessary.  These actions typically do not impact the market clearing price.  As of May 25, 2016, however, wind and intermittent hydro participating in the DNE Dispatch Project can receive electronic dispatch instructions and set real-time prices in the region’s energy market.

While the DNE Dispatch Project permits wind and intermittent hydro to receive electronic dispatch instructions, the process for these resources is still somewhat different than the specific output level dispatch instructions conventional generators in ISO-NE receive.  ISO-NE’s DNE Dispatch Project establishes an individual output band for each participating wind and intermittent hydro resource.  The upper bound, or DNE limit, is set based on the total amount of intermittent generation the system can handle.  The lower limit is set at the individual resource’s economic minimum limit.  A participating resource can operate freely between the economic minimum limit and the DNE limit but, as the name suggests, may not exceed the DNE limit.  Beginning June 1, 2019, DNE dispatchable generators with a capacity supply obligation will be required to offer into the Day-Ahead Energy Market based on their expected generation.  ISO-NE anticipates that its new system will improve wholesale price formation and increase utilization of low-cost renewable resources in transmission-constrained areas.

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FERC Approves NYISO Market Access for Behind-the-Meter Resources

Posted on May 31, 2016 by Amber Martin

On May 17, 2016, the Federal Energy Regulatory Commission (FERC) issued an order, 155 FERC ¶ 61,166 (2016), approving a set of tariff changes proposed by the New York Independent System Operator (NYISO) to permit behind-the-meter generation resources to participate in the grid operator’s energy, ancillary services, and capacity markets.  Through the approved tariff revisions, behind-the-meter resources meeting certain eligibility requirements will now be permitted to bid energy and capacity into the NYISO markets in a manner similar to traditional generators.  To be eligible to participate in the NYISO markets, a behind-the-meter resource must have a minimum nameplate capacity of at least 2 MW, a minimum host load of at least 1 MW, and an interconnection capable of exporting at least 1 MW of energy to New York’s transmission or distribution system.  However, under the new rules, behind-the-meter generation bidding into the market may not participate in demand response or generation buy-back programs.  Recognizing that not all behind-the-meter resources wishing to participate in the NYISO markets would satisfy the approved eligibility criteria, NYISO indicated that it intends to develop additional software, rules, and procedures in the future to integrate additional distributed generation in the wholesale markets and to align the NYISO’s wholesale markets with the New York State Public Service Commission’s Reforming the Energy Vision proceeding.  In approving the changes, FERC noted that participation of behind-the-meter resources in the NYISO markets would “improve the competitiveness, efficiency, and reliability of those markets.”

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