IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v256y2019ics0306261919314217.html
   My bibliography  Save this article

Shaping photovoltaic array output to align with changing wholesale electricity price profiles

Author

Listed:
  • Brown, Patrick R.
  • O’Sullivan, Francis M.

Abstract

Large-scale deployment of solar photovoltaics (PV) contributes to the occurrence of depressed—and sometimes negative—electricity prices during daylight hours as PV displaces higher-cost generators in the merit-order dispatch stack. These changes in electricity price provide an opportunity to increase the wholesale energy revenue of PV generators through temporal shaping of PV output. Here, we explore the impact of three output-shaping strategies on PV wholesale energy revenue and capacity factor: utilization of 1-axis tracking, curtailment during negative-price hours, and modification of fixed-tilt array orientation. Utility-scale PV arrays are modeled at more than 10,000 pricing nodes across six United States electricity markets over the 2010–2017 time period. Large changes in revenue-optimized output profiles are observed for the California system, where solar capacity penetration has increased from ∼2% of peak load in 2010 to ∼28% of peak load in 2017, and the wholesale revenue benefits of temporal output shaping are increasing with time. On the California real-time market in 2017, compared to capacity-factor-optimized fixed-tilt arrays with must-run operation, curtailment increases revenues by 9%, curtailment in conjunction with fixed-tilt orientation optimization increases revenues by 20%, 1-axis tracking without curtailment increases revenues by 32%, and 1-axis tracking with curtailment increases revenues by 42% for the median node. Median optimal fixed-tilt azimuths for PV on the real-time market in California have increased from 192° in 2010 to 235° (i.e. 55° west of south) in 2017. Among the markets and years studied, the California market in 2017 demonstrates the largest potential benefit from temporal output shaping. These results highlight mechanisms for mitigating some of the decline in PV wholesale value at high solar penetrations, and illustrate the importance of adapting PV installation and dispatch strategies to changing power system conditions.

Suggested Citation

  • Brown, Patrick R. & O’Sullivan, Francis M., 2019. "Shaping photovoltaic array output to align with changing wholesale electricity price profiles," Applied Energy, Elsevier, vol. 256(C).
    • Handle: RePEc:eee:appene:v:256:y:2019:i:c:s0306261919314217
    DOI: 10.1016/j.apenergy.2019.113734
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261919314217
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2019.113734?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Weiping He, 2018. "The Regulation of Securities Markets in China," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-137-56742-0.
    2. Jiangze Bian & Zhiguo He & Kelly Shue & Hao Zhou, 2018. "Leverage-Induced Fire Sales and Stock Market Crashes," NBER Working Papers 25040, National Bureau of Economic Research, Inc.
    3. William A. Braff & Joshua M. Mueller & Jessika E. Trancik, 2016. "Value of storage technologies for wind and solar energy," Nature Climate Change, Nature, vol. 6(10), pages 964-969, October.
    4. Lave, Matthew & Kleissl, Jan, 2011. "Optimum fixed orientations and benefits of tracking for capturing solar radiation in the continental United States," Renewable Energy, Elsevier, vol. 36(3), pages 1145-1152.
    5. Fuchang Gao & Lixing Han, 2012. "Implementing the Nelder-Mead simplex algorithm with adaptive parameters," Computational Optimization and Applications, Springer, vol. 51(1), pages 259-277, January.
    6. Yi, Li & Liu, Zilan & He, Lei & Qin, Zilong & Gan, Shunli, 2018. "Do Chinese mutual funds time the market?," Pacific-Basin Finance Journal, Elsevier, vol. 47(C), pages 1-19.
    7. Hirth, Lion, 2013. "The market value of variable renewables," Energy Economics, Elsevier, vol. 38(C), pages 218-236.
    8. James Bushnell & Kevin Novan, 2018. "Setting with the Sun: The Impacts of Renewable Energy on Wholesale Power Markets," NBER Working Papers 24980, National Bureau of Economic Research, Inc.
    9. Sensfuß, Frank & Ragwitz, Mario & Genoese, Massimo, 2008. "The merit-order effect: A detailed analysis of the price effect of renewable electricity generation on spot market prices in Germany," Energy Policy, Elsevier, vol. 36(8), pages 3076-3084, August.
    10. Lamont, Alan D., 2008. "Assessing the long-term system value of intermittent electric generation technologies," Energy Economics, Elsevier, vol. 30(3), pages 1208-1231, May.
    11. Yinghua He & Antonio Miralles & Marek Pycia & Jianye Yan, 2018. "A Pseudo-Market Approach to Allocation with Priorities," American Economic Journal: Microeconomics, American Economic Association, vol. 10(3), pages 272-314, August.
    12. Jianqiang Hao & Hongying Dai, 2018. "Payday Loan Marketing in Social Media Networks," Journal of Consumer Affairs, Wiley Blackwell, vol. 52(2), pages 441-451, July.
    13. Rowlands, Ian H. & Kemery, Briana Paige & Beausoleil-Morrison, Ian, 2011. "Optimal solar-PV tilt angle and azimuth: An Ontario (Canada) case-study," Energy Policy, Elsevier, vol. 39(3), pages 1397-1409, March.
    14. Freitas, S. & Brito, M.C., 2019. "Non-cumulative only solar photovoltaics for electricity load-matching," Renewable and Sustainable Energy Reviews, Elsevier, vol. 109(C), pages 271-283.
    15. Hartner, Michael & Ortner, André & Hiesl, Albert & Haas, Reinhard, 2015. "East to west – The optimal tilt angle and orientation of photovoltaic panels from an electricity system perspective," Applied Energy, Elsevier, vol. 160(C), pages 94-107.
    16. Popov M.V. & Popova N.V., 2018. "Current Trends in the Development of Gaming Market," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 2), pages 936-945.
    17. Bin Li & K. Y. Michael Wong & Amos H. M. Chan & Tsz Yan So & Hermanni Heimonen & Junyi Wei & David Saad, 2015. "How Market Structure Drives Commodity Prices," Papers 1508.03677, arXiv.org, revised Jan 2018.
    18. Lion Hirth, 2013. "The Market Value of Variable Renewables. The Effect of Solar and Wind Power Variability on their Relative Price," RSCAS Working Papers 2013/36, European University Institute.
    19. Wei Dai & Apostolos Serletis, 2018. "Oil Price Shocks and the Credit Default Swap Market," Open Economies Review, Springer, vol. 29(2), pages 283-293, April.
    20. Wei Cui & Min Dai & Steven Kou & Yaquan Zhang & Chengxi Zhang & Xianhao Zhu, 2018. "Interest Rate Swap Valuation in the Chinese Market," World Scientific Book Chapters, in: Kathrin Glau & Daniël Linders & Aleksey Min & Matthias Scherer & Lorenz Schneider & Rudi Zagst (ed.), Innovations in Insurance, Risk- and Asset Management, chapter 13, pages 349-365, World Scientific Publishing Co. Pte. Ltd..
    21. Woo, C.K. & Moore, J. & Schneiderman, B. & Ho, T. & Olson, A. & Alagappan, L. & Chawla, K. & Toyama, N. & Zarnikau, J., 2016. "Merit-order effects of renewable energy and price divergence in California’s day-ahead and real-time electricity markets," Energy Policy, Elsevier, vol. 92(C), pages 299-312.
    22. -, 2018. "Regional digital market: Strategic aspects," Documentos de Proyectos 43633, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    23. Hafez, A.Z. & Soliman, A. & El-Metwally, K.A. & Ismail, I.M., 2017. "Tilt and azimuth angles in solar energy applications – A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 147-168.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Anselm Eicke, Tarun Khanna, and Lion Hirth, 2020. "Locational Investment Signals: How to Steer the Siting of New Generation Capacity in Power Systems?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 6), pages 281-304.
    2. Brown, Patrick R. & O'Sullivan, Francis M., 2020. "Spatial and temporal variation in the value of solar power across United States electricity markets," Renewable and Sustainable Energy Reviews, Elsevier, vol. 121(C).
    3. Kim, James Hyungkwan & Mills, Andrew D. & Wiser, Ryan & Bolinger, Mark & Gorman, Will & Crespo Montañes, Cristina & O'Shaughnessy, Eric, 2021. "Project developer options to enhance the value of solar electricity as solar and storage penetrations increase," Applied Energy, Elsevier, vol. 304(C).
    4. Ahmad Murtaza Ershad & Robert Pietzcker & Falko Ueckerdt & Gunnar Luderer, 2020. "Managing Power Demand from Air Conditioning Benefits Solar PV in India Scenarios for 2040," Energies, MDPI, vol. 13(9), pages 1-19, May.
    5. Ángel José Ordóñez Mendieta & Esteban Sánchez Hernández, 2021. "Analysis of PV Self-Consumption in Educational and Office Buildings in Spain," Sustainability, MDPI, vol. 13(4), pages 1-16, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brown, Patrick R. & O'Sullivan, Francis M., 2020. "Spatial and temporal variation in the value of solar power across United States electricity markets," Renewable and Sustainable Energy Reviews, Elsevier, vol. 121(C).
    2. López Prol, Javier & Steininger, Karl W. & Zilberman, David, 2020. "The cannibalization effect of wind and solar in the California wholesale electricity market," Energy Economics, Elsevier, vol. 85(C).
    3. Eising, Manuel & Hobbie, Hannes & Möst, Dominik, 2020. "Future wind and solar power market values in Germany — Evidence of spatial and technological dependencies?," Energy Economics, Elsevier, vol. 86(C).
    4. Javier L'opez Prol & Wolf-Peter Schill, 2020. "The Economics of Variable Renewables and Electricity Storage," Papers 2012.15371, arXiv.org.
    5. Csereklyei, Zsuzsanna & Qu, Songze & Ancev, Tihomir, 2019. "The effect of wind and solar power generation on wholesale electricity prices in Australia," Energy Policy, Elsevier, vol. 131(C), pages 358-369.
    6. Macedo, Daniela Pereira & Marques, António Cardoso & Damette, Olivier, 2020. "The impact of the integration of renewable energy sources in the electricity price formation: is the Merit-Order Effect occurring in Portugal?," Utilities Policy, Elsevier, vol. 66(C).
    7. Glenk, Gunther & Reichelstein, Stefan, 2021. "Intermittent versus dispatchable power sources: An integrated competitive assessment," ZEW Discussion Papers 21-065, ZEW - Leibniz Centre for European Economic Research.
    8. Brown, T. & Reichenberg, L., 2021. "Decreasing market value of variable renewables can be avoided by policy action," Energy Economics, Elsevier, vol. 100(C).
    9. Mills, Andrew & Wiser, Ryan & Millstein, Dev & Carvallo, Juan Pablo & Gorman, Will & Seel, Joachim & Jeong, Seongeun, 2021. "The impact of wind, solar, and other factors on the decline in wholesale power prices in the United States," Applied Energy, Elsevier, vol. 283(C).
    10. Pape, Christian, 2018. "The impact of intraday markets on the market value of flexibility — Decomposing effects on profile and the imbalance costs," Energy Economics, Elsevier, vol. 76(C), pages 186-201.
    11. Klaus Gugler & Mario Liebensteiner & Adhurim Haxhimusa & Nora Schindler, 2016. "Investment under Uncertainty in Electricity Generation," Department of Economics Working Papers wuwp234, Vienna University of Economics and Business, Department of Economics.
    12. Chinchilla, Monica & Santos-Martín, David & Carpintero-Rentería, Miguel & Lemon, Scott, 2021. "Worldwide annual optimum tilt angle model for solar collectors and photovoltaic systems in the absence of site meteorological data," Applied Energy, Elsevier, vol. 281(C).
    13. Jägemann, Cosima, 2014. "An illustrative note on the system price effect of wind and solar power - The German case," EWI Working Papers 2014-10, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    14. Mira Watermeyer & Thomas Mobius & Oliver Grothe & Felix Musgens, 2023. "A hybrid model for day-ahead electricity price forecasting: Combining fundamental and stochastic modelling," Papers 2304.09336, arXiv.org.
    15. Jain, Sourabh & Shrimali, Gireesh, 2022. "Impact of renewable electricity on utility finances: Assessing merit order effect for an Indian utility," Energy Policy, Elsevier, vol. 168(C).
    16. Edenhofer, Ottmar & Hirth, Lion & Knopf, Brigitte & Pahle, Michael & Schlömer, Steffen & Schmid, Eva & Ueckerdt, Falko, 2013. "On the economics of renewable energy sources," Energy Economics, Elsevier, vol. 40(S1), pages 12-23.
    17. Zipp, Alexander, 2015. "Revenue prospects of photovoltaic in Germany—Influence opportunities by variation of the plant orientation," Energy Policy, Elsevier, vol. 81(C), pages 86-97.
    18. Engelhorn, Thorsten & Müsgens, Felix, 2018. "How to estimate wind-turbine infeed with incomplete stock data: A general framework with an application to turbine-specific market values in Germany," Energy Economics, Elsevier, vol. 72(C), pages 542-557.
    19. Winkler, Jenny & Pudlik, Martin & Ragwitz, Mario & Pfluger, Benjamin, 2016. "The market value of renewable electricity – Which factors really matter?," Applied Energy, Elsevier, vol. 184(C), pages 464-481.
    20. Figueiredo, Nuno Carvalho & Silva, Patrícia Pereira da, 2019. "The “Merit-order effect” of wind and solar power: Volatility and determinants," Renewable and Sustainable Energy Reviews, Elsevier, vol. 102(C), pages 54-62.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:256:y:2019:i:c:s0306261919314217. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.