A resource’s true reliability value is its expected availability to provide energy or reserves when the system is at risk of load shedding. This value depends on (a) the timing of the system’s hours of greatest need and (b) the factors that affect the availability of a resource in those hours. Importantly, the hours of...
Concerns have been raised recently that the owners of coal resources in MISO have been compelling MISO to start coal units uneconomically by designating them as “must-run”. We have evaluated these concerns using actual resource cost and revenue data that is not publicly available. We performed an economic analysis of unit commitment and dispatch of...
Prices during peak demand hours are critical for the economic efficiency of electricity markets. During peak times, quick-starting peaking units are usually started and dispatched. In the tightest hours, operators may take emergency actions to increase the real-time supply or decrease demand. Efficient pricing in peak hours requires that the costs of these actions be...
The bad news is that state public policies often do undermine competitive electricity markets. The good news is that the harm can be mitigated. States have become increasingly active in pursuing environmental goals by subsidizing investment in renewable energy generation, including solar, wind, and hydroelectric resources. This subsidized entry of capacity is problematic to the...
Most electricity markets have requirements to maintain a minimum level of generating capacity to ensure that they can keep the lights on under nearly all conditions. Energy and operating reserve markets will typically not provide enough revenue to keep this quantity of generation in service, so capacity markets were developed to provide economic signals that...