An Energy Market allows a project to model energy bought from or sold to a wholesale merchant market, or sold if a restriction on buying from the grid is specified.
Three energy markets can be modeled: a Day-Ahead Market (DAM), a Fifteen-Minute Market (FMM) and a Real-Time Market (RTM). (Note: These are the names of California Independent System Operator (CAISO) markets and may vary based on region). One of each can be modeled individually or in any combination.
Import
Select Energy Market and click on the drop-down to select one of three options.
Select Import to upload pricing for the selected energy market. See Import formats to view which formats are acceptable.
The average energy price for the selected year for multi-year time series is the arithmetic mean of the imported price signal in $/MWh.
Energy Price Escalator
If you would like to consider changes in price over your project lifetime, click the Energy Price Escalator (%/yr) box. Choose the %/yr to specify a linear escalator or Escalation by year to specify yearly percentages.
Maximum Storage Commitment
This is the maximum storage commitment that can be made to the energy market each time step. The sum of maximum commitments across Energy Markets does not need to be 100%. For one energy market, set the value to 100%.
See Multiple Energy Markets, below, for details.
PV Allocation
This is the percentage of remaining PV production that will be allocated to the energy market each time step after all other revenue stream allocations are satisfied. The sum of PV allocations across Energy Markets must be 100%.
Wind Turbine Allocation
This is the percentage of remaining wind turbine production that will be allocated to the energy market each time step after all other revenue stream allocations are satisfied. The sum of wind turbine allocations across Energy Markets must be 100%.
Simulation Strategy
The simulation optimizes each Energy Market with all the other revenue streams and components, two days at a time, to find the highest Net Present Value. If there is more than one Energy Market, the optimizations are combined as described in Multiple Energy Markets.
Multiple Energy Markets
Multiple energy market participation is not optimal because the market prices are not all known at the same time. Optimal modeling would produce an overly aggressive and unrealistic estimate. The goal, instead, is to produce a model that estimates the economic outcome of a skilled bidding strategy. More specifically, the goal is to produce estimates with reasonable relative accuracy so systems can be compared.
When there are multiple energy markets, an optimization is performed for each market. Each optimization involves one market and all of the other revenue streams and components, resulting in a desired storage dispatch. The two, or three, desired storage dispatches are then combined into a single dispatch.
Technically, later markets know about earlier markets, but bidding strategies often account for factors other than earlier market pricing, so it was found that modeling them without any knowledge of each other produced a more realistic result.
The dispatches are then combined according to a weighted decision scheme. For each time step, it is decided whether the BESS will charge or discharge. Markets that desired the decided dispatch direction are allowed to participate that time step and markets that desired the opposite are not. The amount of energy dispatched is calculated based on the desired dispatches of participating markets and their maximum storage commitments.
The BESS is then dispatched according to the Order of Commitment: Capacity Market first, then Time of Delivery, then Energy Markets. Energy is distributed only to Energy Markets participating this timestep, again weighted by desired dispatch and maximum storage commitment, and not to exceed maximum storage commitment.
PV and wind are also dispatched. All energy markets are included and distribution is made according to their allocations. The allocations are normalized if they add up to more than 100%.
For example, two markets could each have a maximum commitment of 100%. In time step 1, the first market could discharge 100% of the BESS and each market would sell 50% of PV and solar. In time step 5, the second market could now discharge 100% of the BESS and, again, each market would sell 50% of PV and solar. If both participate in a time step, the BESS distribution will be some combination based on desired dispatch and, again, each market would sell 50% of PV and solar.
Note that Energy Markets will not charge and discharge the battery in the same time step, sometimes referred to as virtual trading or buying out of a position. However, in certain circumstances, typically when a market has a negative price, one market could charge the battery while another market sells PV or wind.
See Also
