Category: Utility Scale Generation
Technological and other advances have reduced the levelized cost of electricity (LCOE) of solar power. However, the competiveness and affordability of solar depends not just on cost, but also on the market value of solar, and increasingly, on how solar interacts with other technologies within electricity markets. As solar penetration grows in a number of locations, there is a mounting need to understand the current location-specific market value of solar; measure the contribution of solar to grid reliability; and quantify how solar changes the motivation to invest in complementary flexible resources such as storage, demand response, and flexible thermal plants. To address this need, we bring together finely resolved solar data with historical electricity market data to identify trends in solar’s market value, reliability contribution, and impact on the bulk power system. In particular, we summarize the: (1) frequency and timing of abnormally high or low wholesale power prices as solar is deployed; (2) locational patterns and overall volatility of wholesale prices; and (3) resulting impact on the wholesale market revenues of various grid resources including emerging complementary flexible resources that may ease the grid integration of solar, including storage, demand response, and highly-flexible internal combustion engines. The geographically specific results help inform market design, planning and operations, technology and business strategy, and R&D targets.
Andrew Mills– Research Scientist, Berkeley Lab