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All sourcesNASA NTRSDOE OSTI
DOE OSTI2024

Techno-economic assessment of electricity market potential for co-located hydro-floating PV systems

Abstract—Harnessing renewable energy from diverse sources is paramount for sustainable power systems. Recently, co-located floating PV (FPV) systems present an intriguing prospect in this context. These hybrid systems, blending hydro and solar power, may offer a more consistent electricity output and potential economic advantages. Yet, assessing their actual potential requires a comprehensive techno-economic assessment. In addition, probabilistic price forecasting has recently gained attention in electricity market because decisions based on such predictions can yield significantly higher profits than those made with point forecasts alone. To this end, this paper embarks on a journey to elucidate the electricity market potential of co-located hydro-FPV systems in a probabilistic fashion to investigate the technological merits and economic viability of co-located hydro-FPV under different market structures. Our preliminary findings suggest that LCOE and payback metrics are sensitive not only to different markets but also to different solar incentives. Concurrently, we also observe that the payback period is generally faster with a production tax credit (PTC) than an investment tax credit (ITC). This assessment serves as a cornerstone for understanding the future prospects of co-located hydro-FPV systems in modern electricity markets.

13 HYDRO ENERGY↗
DOE OSTI2022

Security-Constrained Unit Commitment for Electricity Market: Modeling, Solution Methods, and Future Challenges

This paper summarizes the technical activities of the IEEE Task Force on Solving Large Scale Optimization Problems in Electricity Market and Power System Applications. This Task Force was established by the IEEE Technology and Innovation Subcommittee to first review the state-of-the-art of the security-constrained unit commitment (SCUC) business model, its mathematical formulation, and solution techniques in solving electricity market clearing problems. The Task Force then investigated the emerging challenges of future market clearing problems and presented efforts in building benchmark mathematical and business models.

24 POWER TRANSMISSION AND DISTRIBUTION↗
DOE OSTI2023

Mitigation-Aware Bidding Strategies in Electricity Markets

Market power exercise in the electricity markets distorts market prices and diminishes social welfare. Many markets have implemented market power mitigation processes to eliminate the impact of such behavior. The design of mitigation mechanisms has a direct influence on investors' profitability and thus mid-/long-term resource adequacy. In order to evaluate the effectiveness of the existing market power mitigation mechanisms, this paper proposes a mitigation-aware strategic bidding model and studies the bidding strategies of the market participants under current practice. The proposed bidding model has a bilevel structure with strategic participant's profit maximization problem in the upper level and the dispatch problem for market operators in the lower level. In particular, the consideration of potential offer mitigation is incorporated as upper-level constraints based on the conduct and impact tests. This bilevel problem is reduced to a single-level mixed-integer linear program using the KKT optimality conditions, duality theory, and linearization. Numerical results illustrate how a strategic player can exercise market power to achieve a higher profit even under the current market power mitigation process and we analyze the social impact that the market power exercise results.

Wu, Yiqian↗
DOE OSTI2022

Incorporate day-ahead robustness and real-time incentives for electricity market design

In this paper, we propose a two-stage electricity market framework to explore the participation of distributed energy resources (DERs) in a day-ahead (DA) market and a real-time (RT) market. The objective is to determine the optimal bidding strategies of the aggregated DERs in the DA market and generate online incentive signals for DER-owners to optimize the social-welfare taking into account network operational constraints. Distributionally robust optimization is used to explicitly incorporate data-based statistical information of renewable forecasts into the supply/demand decisions in the DA market. We evaluate the conservativeness of bidding strategies distinguished by different risk aversion settings. In the RT market, a bi-level time-varying optimization problem is proposed to design the online incentive signals to tradeoff the RT imbalance penalty for distribution system operators (DSOs) and the costs of individual DER-owners. This enables tracking their optimal dispatch to provide fast balancing services, in the presence of time-varying network states while satisfying the voltage regulation requirement. Simulation results on both DA wholesale market and RT balancing market demonstrate the necessity of this two-stage design, and its robustness to uncertainties, the performance of convergence, the tracking ability and the feasibility of the resulting network operations.

24 POWER TRANSMISSION AND DISTRIBUTION↗
DOE OSTI2023

Synthetic Electricity Market Data Generation and HERON Use Case Setup of Advanced Nuclear Reactors Coupled with Thermal Energy Storage Systems

This study evaluates and optimizes advanced nuclear reactors coupled with thermal energy storage (TES) systems in an Integrated Energy System (IES) architecture to enable advanced nuclear power plants (A NPP) to participate in multi-commodity markets, thus enhancing their economic competitiveness. Nuclear-TES coupling scenarios studied herein are designed attenuate the nuclear heat dynamics and defer energy delivery to a later time, enabling the nuclear reactor to continue operating at or near steady-state design conditions as usual while also enabling flexible generation. Three A-NPPs, namely, an advanced light-water reactor (A LWR), a high temperature gas-cooled reactor (HTGR) and a liquid-metal fast reactor (LMFR) were selected as the initial use cases for demonstrating the technoeconomic of thermally balanced energy storage coupling design for thermal power extraction. Each of the reactor technologies were evaluated in two different electricity markets. Stochastic optimization approach was adopted which included the evaluation of price signals from the Pennsylvania-New Jersey-Maryland (PJM) market, and Electric Reliability Council of Texas (ERCOT), using an autoregressive moving average (ARMA) model. Risk Analysis Virtual Environment (RAVEN) tool and its dispatch optimization plugin, the Holistic Energy Resource Optimization Network (HERON), were used to perform dispatch and capacity optimization, using the price data provided by the ARMA models. The results from the Nuclear-TES use cases will be used to design and characterize dynamic integrated system behavior and feedback.

22 GENERAL STUDIES OF NUCLEAR REACTORS↗
DOE OSTI2025

A bilevel multistage stochastic self-scheduling model with indivisibilities for trading in the continuous intraday electricity market

In this paper, we study the profit maximization problem of a virtual power plant trading in the continuous intraday electricity market. Our virtual power plant model is compatible with renewable, and thermal assets, covering a range of virtual power plants currently participating in energy markets. We model the trading problem as a bilevel multistage stochastic program. The upper level of the problem accounts for the profit maximization of the virtual power plant with explicit modeling of the technical constraints of the operational status of the thermal power plant including minimum start-up and shut-down times, ramp-up and ramp-down rates, and minimum generation level. The upper level also decides which continuous and indivisible (fill-or-kill) orders are submitted to the market. The lower-level problem accounts for the clearing of the continuous intraday market, i.e., matching of buy and sell orders. Because of the presence of fill-or-kill orders, the lower-level problem is mixed-integer, which prevents its direct conversion to a single-level problem using duality. In order to solve this challenging problem, we develop a convex-hull extended formulation for the lower-level problem, apply duality theory to obtain a single-level stochastic equivalent formulation, and employ McCormick envelopes to turn the problem into a multistage stochastic mixed-integer linear problem, which we solve using the stochastic dual dynamic integer programming algorithm. We conduct numerical experiments and analyze the optimal trading behavior of a virtual power plant trading in an ideal continuous market without arbitrage.

Bilevel multistage stochastic programming problem↗
DOE OSTI2022

A Hierarchical Local Electricity Market for a DER-rich Grid Edge

We report with increasing penetration of distributed energy resources (DER) in the distribution system, it is critical to design market structures that enable smooth integration of DERs. A hierarchical local electricity market (LEM) structure is proposed in this paper with a secondary market (SM) at the lower level representing secondary feeders and a primary market (PM) at the upper level, representing primary feeders, in order to effectively use DERs to increase grid efficiency and resilience. The lower level SM enforces budget, power balance, and flexibility constraints and accounts for costs related to consumers, such as their disutility, flexibility limits, and commitment reliability, while the upper level PM enforces grid physics constraints such as power balance and capacity limits, and also minimizes line losses. The hierarchical LEM is extensively evaluated using a modified IEEE-123 bus with high DER penetration, with each primary feeder consisting of at least three secondary feeders. Data from a GridLAB-D model is used to emulate realistic power injections and load profiles over the course of 24 hours. The performance of the LEM is illustrated by delineating the family of power-injection profiles across the primary and secondary feeders as well as corresponding local electricity tariffs that vary across the distribution grid. Through numerical simulations, the hierarchical LEM is shown to improve the efficiency of the market in terms of lowering overall costs, including both the distribution-level locational marginal prices (d-LMP) as well as retail tariffs paid by customers. Together, it represents an overall framework for a Distribution System Operator (DSO) who can provide the oversight for the entire LEM.

24 POWER TRANSMISSION AND DISTRIBUTION↗
DOE OSTI2022

A hybrid robust-stochastic optimization approach for day-ahead scheduling of cascaded hydroelectric system in restructured electricity market

Uncertainties arising from complicated natural and market environments pose great challenges for the efficient operation of cascaded hydroelectric systems. To overcome these challenges, this paper studies the day-ahead scheduling of cascaded hydroelectric systems in a restructured electricity market with the presence of uncertainties in electricity price and natural water inflow. To properly model the uncertainty, we consider the unique characteristics of these two types of uncertainties and capture them via the uncertainty set and stochastic scenarios, respectively. Further, a hybrid robust-stochastic optimization model is developed to simultaneously hedge against these two types of uncertainties, which is formulated as a large-scale non-convex optimization problem with mixed integer recourse. After introducing linearization of nonlinear terms, a tailored hybrid decomposition scheme combining Lagrangian relaxation and Dantzig-Wolfe decomposition is adopted to achieve efficient computation of the proposed model. Two real-world cases are conducted to demonstrate the capability and characteristics of the proposed model and algorithms.

13 HYDRO ENERGY↗
NASA NTRS2007

[Space Weather Impact on the Electricity Market]

Forbes & St. Cyr (2004, hereafter "FISC") have provided evidence that the electricity market can be impacted by space weather. Our analysis indicated that the estimated market impact for PJM was 3.7 % or approximately $500 million dollars over the 19 month sample period. Kappenman has taken exception to this estimate and contends that we have exaggerated the magnitude of the problem that space weather poses to PJM. There are four specific issues: (1) he claims that we have ignored relevant literature; (2) he asserts that Dst is not an appropriate proxy for GICs in PJM; (3) he charges that our findings are inconsistent with the impact of the 17 September 2000 storm; and (4) he alleges that our discussion of October 2003 storms is misleading. In our article, we have explained our methodology, multivariate regression analysis, with a particular focus on how it compares to correlation analysis. We have also explained the limitations of our analysis. We noted that "...While the Dstlprice relationship was found to be robust, the precise estimate should be treated with a relatively high degree of caution given that econometric modeling is not an exact science as well as the fact that the measure of space weather may be a poor proxy for GICs" (paragraph 96). We have also noted that additional research using local magnetometer data are needed (paragraph 97). We did not claim that that our findings for PJM are representative of the impact of space weather on other power grids. On the contrary, we noted that ... "Only analysis of other power grids will tell. " (paragraph 97). Kappenman inaccurately asserts that we have indicated that our findings . . . "imply much higher total costs are likely across the US and elsewhere in the world." He also inaccurately asserts that we have claimed that " . . . Dst is the most suited proxy for GIC in the PJM grid.. ." Moreover, he inaccurately refers to our analysis as a correlation study that uses Dst as quasi-binary indicator.

SaintCyr, O. Chris↗
DOE OSTI2025

Are better combinations of DERs more profitable?: Combinatorial optimization for aggregation of DERs in wholesale electricity markets

Recently, regulatory changes in various countries have enabled the participation of small-scale distributed energy resources (DERs) aggregated in virtual power plants (VPPs) in wholesale electricity markets. The inherent uncertainty and variability of resources comprising VPPs can lead to imbalances between forecasted and metered outputs, potentially resulting in the deficient settlement of generation under imbalance settlement rules. To address this challenge, it is essential to manage variability in the planning phase and uncertainty in the operation phase. Most current research focuses on managing forecasting errors in the operational phase, with insufficient attention given to the planning phase. Here, to bridge this gap, this paper proposes an optimal combination strategy for DERs to maximize the market participation revenue of VPPs by proactively managing variability in the planning phase. To estimate the expected revenue, we conducted analyses for homogeneous and heterogeneous DERs using Monte Carlo simulations and genetic algorithms. Remarkably, the proposed method demonstrated approximately 8 % higher revenue compared to the neighboring group case when considering diversity in DER set configuration with equal proportions of photovoltaics and wind.

24 POWER TRANSMISSION AND DISTRIBUTION↗
DOE OSTI2022

Integrating Hydrogen Production and Electricity Markets: Analytical Insights from California

This report compares the cost of different pathways for producing hydrogen in California. In addition to capturing the current cost of electrolyzers and other equipment, the pathways apply current retail electricity tariff options offered by utilities Southern California Edison (SCE), Pacific Gas & Electric Company (PG&E), and San Diego Gas & Electric Company (SDG&E). The analysis also tests the cost of combining hydrogen production with utility-scale wind or solar generation in California. Scenarios examine current costs as well as projections for 2030. The cost benchmark - a relatively low electrolytic hydrogen production cost - is based on the wholesale price of electricity used by a theoretical hydrogen production plant connected directly to the California Independent System Operator (CAISO) transmission system. California law currently prohibits this approach in CAISO, but it is permissible in other organized wholesale electricity markets. The cost for producing hydrogen under 2019 conditions in this theoretical case was approximately $3/kg. Different scenarios are used to examine current costs, e.g., 2019, as well as projections for 2030.

08 HYDROGEN↗
DOE OSTI2023

An Analysis of the Effects of Renewable Energy Intermittency on the 2030 Korean Electricity Market

Republic of Korea has unique geographical characteristics similar to those of an island, resulting in an isolated power system. For this reason, securing sufficient operating reserves for the system’s stability and reliability in the face of the intermittency of increasing variable renewable energy (VRE) is paramount, and this will pave the way to achieving the nation’s decarbonization target and carbon neutrality. However, the current reserve-operation method in Republic of Korea does not take into account energy-system conditions, such as the intermittency of the VRE. Therefore, this paper presents an analysis of the impact of changes in reserve-operation methods on the electricity market in the future Republic of Korean power system, with the increased levels of VRE that are currently envisioned. Specifically, three reserve-operation methods, including Korea’s current reserve-power-operation standards, were applied to the two power-system plans announced by the Korean government to analyze the annual generator operation and costs. The analysis results show that securing reserves proportional to the VRE would exert negative effects, such as increased power-generation costs and the curtailment of nuclear and VRE generation. These results can contribute to the estimation of operational reserves needed for high levels of VRE and to the design of new the Korean reserve market, to be introduced in 2025.

24 POWER TRANSMISSION AND DISTRIBUTION↗
DOE OSTI2025

An Integrated Paradigm for the Management of Delivery Risk in Electricity Markets: From Batteries to Insurance and Beyond

If power systems transition to integrate higher amounts of variable renewable energy sources, storage technologies, and distributed energy resources (DERs), new risk management frameworks are necessary to ensure cost-effective and reliable power system operations. Projects funded by the Advanced Research Projects Agency-Energy (ARPA-E) Performance-based Energy Resource Feedback, Optimization, and Risk Management (PERFORM) program aim to contribute new risk management frameworks by developing methods to quantify and manage risk at grid asset and system levels. The National Renewable Energy Laboratory (NREL) led a PERFORM project in collaboration with the Johns Hopkins University, the Electric Power Research Institute (EPRI), kWh Analytics, Packetized Energy, and Imperial Consultants (ICON). The project addressed two challenges related to risk management in electricity markets: managing net load imbalances and flexibility from DERs. This final technical report presents a list of project accomplishments, activities, and outputs.

24 POWER TRANSMISSION AND DISTRIBUTION↗
DOE OSTI2022

Multiscale simulation of integrated energy system and electricity market interactions

Accelerating the deep decarbonization of the world's electric grids requires the coordination of complex energy systems and infrastructures across timescales from seconds to decades. Here, we present a new multiscale simulation framework that integrates process- and grid-centric modeling paradigms to better design, operate, and control integrated energy systems (IESs), which combine multiple technologies, in wholesale energy markets. Traditionally, IESs are analyzed with a process-centric paradigm such as levelized cost of electricity (LCOE) or annualized net revenue, ignoring important interactions with electricity markets. This framework explicitly models the complex interactions between an IES's bidding, scheduling, and control decisions and the energy market's clearing and settlement processes, while incorporating operational uncertainties. Through two case studies, we show the importance of understanding and quantifying complex resource-grid interactions. In case study 1, we demonstrate that optimized bidding from one resource shifts the profit distribution for all energy systems in the market. This result suggests new and more flexible IES technologies can disrupt the economics of all market participants, possibly leading to accelerated retirements of less flexible resources. Interestingly, the optimized bidding has little impact on grid-level aggregate statistics, such as total generation costs and renewable penetration rate. While aggregate modeling strategies may remain valid under some IES adoption scenarios for analysis focused on regional outcomes, direct comparisons of IES technologies at specific locations without considering these interactions may lead to misleading or incorrect conclusions. In case study 2, we consider the design and flexible operation of IESs that hybridize conventional generators with energy storage. Through a sensitivity analysis, we find that as the size of the storage system increases, the total number of start-ups for coal- and natural gas-based IESs reduced by 25% and 33.6%, and the total thermal generator ramping (i.e., mileage) reduced by 86.5% and 62.5%, respectively. This shows the primary benefit of storage may not be reduced operational costs (which do not change significantly) but fewer start-ups and less ramping, which may greatly simplify the design, operation, and control of carbon capture systems. The new modeling and optimization capabilities from this work enable the coupling of rigorous, dynamic process models with grid-level production cost models to quantitatively identify the nuanced interdependencies across these vast timescales that must be addressed to realize clean, safe, and secure energy production. Moreover, the proposed general multiscale simulation framework is applicable to all IES technologies and can be easily extended to consider other energy carriers (e.g., hydrogen, ammonia) and energy infrastructures (e.g., natural gas pipelines).

24 POWER TRANSMISSION AND DISTRIBUTION↗
DOE OSTI2026

Demonstration of Electrolyzer Operation at a Nuclear Plant to Allow for Dynamic Participation in an Organized Electricity Market and In-House Hydrogen Supply

This document details the execution of Cooperative Agreement DE-EE0008849, “demonstration of electrolyzer operation at a nuclear plant to allow for dynamic participation in an organized electricity market and in-house hydrogen supply” during the performance period of 10/1/2019 – 9/30/2024. The project was funded by the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE). Constellation Energy Generation, LLC (formerly Exelon Generation Company, LLC) is the prime recipient of the award. Other members of the project team are INL, NREL, ANL and Nel Hydrogen. The main project objective was to demonstrate an end-to-end integrated grid-scale carbon-free H 2 production, storage and utilization pilot plant at a nuclear generating facility. The project also aimed to evaluate market opportunities and regulatory requirements related to the participation of integrated hydrogen production and nuclear plant facilities in organized power markets, by demonstrating dynamic control and operation of the electrolyzer and assessing the economics of dynamic participation combined with the revenue streams from hydrogen production. On March 7th , 2023 Constellation started hydrogen production at it’s Nine Mile Point Nuclear Plant in Oswego, New York. The PEM electrolyzer operating at Nine Mile Point uses 1.25 megawatt of nuclear electricity to produce 560 kilograms of clean hydrogen per day, more than enough to meet the plant’s operational hydrogen use. It will also help set the stage for possible large-scale deployments at other clean energy centers in Constellation’s fleet that would couple clean hydrogen production with storage and other on-site uses. Employing the lessons learned from the 1.25 MW demonstration-scale, nuclear-powered clean hydrogen production facility at Nine Mile Point, Constellation was a major participant in the MachH2 hydrogen hub recently selected for up to $\$$1 billion by the Department of Energy (DOE) as part of the bipartisan Infrastructure Investment and Jobs Act. Constellation will use a portion of the hub funding to build the world’s largest nuclear-powered clean hydrogen production facility at its LaSalle Clean Energy Center in Illinois. The project was featured in a number of news articles and press releases and received 2 awards. At the 2023 DOE HFTO’s Annual Merit Review meeting, the P.I. Dr. Uuganbayar Otgonbaatar and project manager Robert Beaumont were recognized for “outstanding achievements in the development and demonstration of a first-of-a-kind clean hydrogen production facility, powered by carbon-free nuclear energy, at the Nine Mile Point Nuclear Station in Oswego, New York.” The project was also awarded 2023 Nuclear Energy Institute’s Top Innovative Practice award.

08 HYDROGEN↗
DOE OSTI2024

Market Implications of Alternative Operating Reserve Modeling in Wholesale Electricity Markets

Pricing and settlement mechanisms are crucial for efficient resource allocation, investment incentives, market competition, and regulatory oversight. In the United States, Regional Transmission Operators (RTOs) adopts a uniform pricing scheme that hinges on the marginal costs of supplying additional electricity. This study investigates the pricing and settlement impacts of alternative reserve constraint modeling, highlighting how even slight variations in the modeling of constraints can drastically alter market clearing prices, reserve quantities, and revenue outcomes. Focusing on the diverse market designs and assumptions in ancillary services by U.S. RTOs, particularly in relation to capacity sharing and reserve substitutions, the research examines four distinct models that combine these elements based on a large-scale synthetic power system test data. Our study provides a critical insight into the economic implications and the underlying factors of these alternative reserve constraints through market simulations and data analysis.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗
DOE OSTI2024

Beyond Price-Taker: Multiscale Optimization of a Wind-Battery Integrated Energy System within the Wholesale Electricity Market

This work presents the optimization of a wind-battery IES using the multiscale optimization framework proposed in our previous work to quantify errors from the price-taker assumption. The framework, built over Prescient (an open-source package for solving production cost models), is applied to the RTS-GMLC dataset, an open-source dataset that is representative of the southwest U.S. wholesale electricity market. The framework provides detailed bidding, market clearing, and control processes of an IES, and it can quantify how the IES interacts with the market. In this work, we use the retrofit of a wind farm with a battery storage system as an example to show the difference in the market outcomes and revenues obtained from both price-taker and multiscale optimization approaches. Our work goes beyond price-taker and deep dives into quantifying IES-market interaction in optimizing IES. This framework enables users to explore how different design and operation decisions of energy systems interact with the market and provides a more accurate evaluation than the price-taker assumption.

Chen, Xinhe↗
DOE OSTI2022

A Computational Framework for Energy Storage Participation in Transmission Planning with Electricity Market Participation

Energy storage technologies—including pumped storage hydropower (PSH), batteries, and other technologies—have been technically proven to be capable of providing transmission services by regulating power flows and providing voltage support. These technologies will potentially increase the flexibility of transmission infrastructure and may defer (or eliminate) the need for transmission upgrades or new investments. On the regulatory side, Congress and the Federal Energy Regulatory Commission (FERC) have issued several orders over decades that have established energy storage’s (ES) eligibility as a transmission asset. The orders have required transmission planning entities to provide a level playing field where ES can participate in the transmission planning process (TPP) without undue discrimination and preference of technology. These developments pave the way for ES to participate in transmission planning as a transmission asset. On the other hand, as a flexible resource, ES can play an important role in the electricity market to enable more renewable energy integration by providing energy and grid reliability services. This could bring more revenue in return.

25 ENERGY STORAGE↗