Solar and Energy Storage Impacts on Wholesale Power Markets

Posted: July 28, 2015 - 01:51 / Reports

The continuing price decline in solar panels, combined with expected higher prices for natural gas and proposed greenhouse gas (GHG) emissions allowance regulations, makes solar energy a prime resource to offset natural gas and coal generation in the Western Electricity Coordinating Council (WECC) Interconnection. As policymakers debate the merits of increasing the RPS in California to 50 percent by 2030, one of the many uncertainties that the energy industry needs to understand is what solar and increased energy storage will do to wholesale electricity prices. To help address this important question, Black & Veatch and SEPA have teamed together to examine the impact solar and energy storage have on wholesale electricity prices in the CAISO market.

In light of these future developments, this white paper seeks to advance the discussion of the impact of high solar photovoltaic (PV) penetration on the California system and the potential role of energy storage from an economic (spot market pricing) perspective. In addition, this study will review the level and type of generation needed to maintain resource adequacy targets under a variety of scenarios, and will also look at how a high penetration of energy storage impacts those requirements.