Do we need to improve forecasting for supply resources that will be integrated into CAISO energy markets?
Technological improvements, reductions to the levelized costs of energy for renewable energy, and State mandated Renewable Portfolio Standards (RPS) have lead to a sharp increase in the amount of Solar and Wind projects completed or under development. While providing environmental benefits and introducing new sources of energy, higher penetrations of variable generation present new challenges to planners and operators of the electricity grid.
As higher penetrations of intermittent energy are produced and connected onto the grid, the need for high fidelity forecasting to optimally manage fast ramp rate events and provide firmed scheduling becomes increasingly critical in order to mitigate the rising costs associated with curtailment and ancillary services needed to improve power quality and maintain grid stability. High fidelity operational forecasting services that cover a wide range of temporal horizons are a cost effective way to improve energy security, power quality, and maximize return on capital investment through efficient operation and energy market participation.
The necessity and cost effectiveness of high fidelity forecasting is being realized throughout the industry, as IPP’s are requiring ‘forecasting’ within their Request For Proposals (RFP’s) from EPC firms. It is also becoming common for LSE’s to require dynamic scheduling and forecasting within Power Purchase Agreements (PPA’s). Moreover, in 2011, SB 2X was passed, amending California’s RPS law to include more renewable electricity generated out-of-state, if firm scheduling (i.e. forecasting) is provided.
And as of April 1, 2014, changes in the CAISOs Participating Intermittent Resource Program mean that renewable generators in CAISO territory are now required to provide 15 minute forecasts.
In addition, resources such as Demand Response (DR) and Distributed Energy Storage Systems (DESS) provide powerful and flexible ways for balancing authorities to optimally manage grid resources. Moving forward, the importance of and reliance on DR/DESS programs will continue to increase as balancing authorities look to new way to maintain the stability and reliability of the grid as higher penetrations of variable generation are integrated. The additional application of forecasting techniques and technologies to these new supply side resources can significantly improve the energy quality and reliability outcomes from renewable systems.
Key to this effort will be the utilization of highly accurate short and long term forecasting tools that incorporate vast improvements in spatial and temporal resolution. The lack of accuracy, spatial and temporal resolution available with currently employed supply side forecasting systems presents major challenges to balancing authorities.
Improvements in field-ready forecasting systems are critically needed to integrate supply resources into the CAISO energy market in a more efficient manner. We believe that improvements in forecasting will provide a cost effective way for balancing authorities to manage the added complexities of incorporating DR/DESS programs into transmission planning and real-time operations and manage the increasing effect of intermittency on many aspects of the grid.
Forecast Energy, Inc. is