This workshop aims to bring together all the ideas from the Architecture of Green Energy program, allow participants to summarize results so far, prepare a summary document of progress, and build a blueprint for future collaborations and follow up mechanisms.
The meeting will include a panel with new invited speakers to provide independent reflections, opportunities for future funding, talks from participants, demonstrations of program tools and models, and opportunities for soapbox presentations for topics not covered in the 10 week program. The summary document will detail how green energy systems should be designed and interact more broadly with societal needs. Since the program will focus on providing opportunities for researchers to collaborate on site in small groups on a number of related topics associated with Green Energy, participants will be encouraged to prepare detailed articles on small group outcomes, and solutions generated.
This workshop is a part of the Summer 2024 long program The Architecture of Green Energy (June 17 – August 23, 2024). Acceptances to be a participant in the long program are occurring on a rolling basis.
The electricity industry, policymakers, and regulators are grappling with decarbonizing electricity systems. Decarbonization will yield significant changes in how electricity systems are planned and operated and will require policy and market-design reforms. This talk will survey these changes as well as the major challenge of achieving the final 10%-20% of decarbonization.
9:55-10:25 CDT
Coffee Break
10:25-11:05 CDT
Green Power Procurement for Real Emissions Reductions: Accounting and Modelling in Complex Policy and Market Settings
Speaker: Ben Hobbs (Johns Hopkins University)
Multiple market failures along with policies at federal and state levels make it difficult to predict the net systems and emissions cost impact, in both the short- and long-run, of corporate and government green power procurement strategies. I define a suite of research questions that need to be addressed to understand whether such strategies are efficient means to reduce emissions, ineffectual, or even counter productive. Market models are proposed, based on equilibrium and Stackelberg formulations based on optimization and complementarity methods, to address those questions.
11:05-12:30 CDT
Short contributed talks
12:30-14:00 CDT
Lunch Break
14:00-14:45 CDT
Group Presentations and Q&A
14:45-15:30 CDT
Panel Discussion
15:30-16:30 CDT
Social Hour
Tuesday, August 20, 2024
9:00-9:15 CDT
Introduction: Convenor – Andy Philpott
9:15-9:55 CDT
Contracts with Generators in a Low-Carbon Electricity Market: Risks and Costs
Speaker: Richard Green (Imperial College)
Do low-carbon wind and solar generators need special treatment in a market where their costs have fallen to the level of conventional gas and other stations’ costs? While the level of costs may be similar, we need to take into account how cost structures and output patterns differ between renewable and dispatchable generators. While gas prices continue to determine electricity prices, renewable generators have more exposure to fuel price risk than gas-fired generators, because gas prices would affect market-based wind and solar revenues but not their costs. Appropriately structured contracts can reduce risks for generators, for energy retailers and also for electricity consumers. This presentation models the impact of different contract designs on the revenues, profits and cost of capital for renewable and dispatchable generators.
9:55-10:25 CDT
Coffee Break
10:25-11:15 CDT
A Forward Energy Market to Improve Reliability and Resiliency
Speaker: Peter Cramton (University of Maryland)
We propose a forward market for energy that aligns market participants’ incentives with social welfare. The new market promotes competition and innovation through improved forward trading and improves investment incentives, reliability, and resilience to extreme events, avoiding a costly and inefficient capacity market. The transition can be gradual and low-cost since core systems need not change. The new market products are financial derivatives of day-ahead energy, which is a derivative of real-time energy. Monthly forward energy is traded up to 12 × 4 = 48 months ahead by day type (weekday, weekend) and hour. Hourly forward energy is traded up to 24 × 30 = 720 hours ahead. Products are also differentiated by load zone to hedge congestion risk. Load-serving entities have a mandatory, yet flexible, schedule of purchase obligations, increasing linearly from 0 percent 48 months ahead to 100 percent of realized load day-ahead; dominant suppliers have a symmetric obligation to sell; otherwise, the market is voluntary. Renewable energy certificates (RECs) are included to manage renewable standards. Energy options allow forward purchase for extreme events, enhancing reliability and risk management. Forward reserves improve reserve procurement.
These monthly and hourly products enable both sides of the market to establish forward positions (anticipated load – anticipated production + sales – purchases) to manage risk better. Trade occurs without friction with hourly clearing using flow trading (Budish et al., 2023). Flow trading allows participants to adjust portfolio positions efficiently among thousands of products as information changes. It is especially appropriate in electricity markets because electricity is delivered in flows, and both the day-ahead and real-time markets employ a version of flow trading today. The approach identifies unique prices and quantities for the products that maximize as-bid social welfare.
A full-scale simulation of Texas’s ERCOT market offers proof of concept. A prototype market platform and participant tools confirm ease of implementation and participation.
11:15-12:30 CDT
TBA
Speaker: Shmuel Oren
12:30-14:00 CDT
Lunch Break
14:00-14:45 CDT
Group Presentations and Q&A
14:45-16:30 CDT
Short Contributed Talks and Panel Discussion
Wednesday, August 21, 2024
9:00-9:15 CDT
Introduction: Convenor – TBD
9:15-9:55 CDT
The science and policy of the Just Energy Transition
Speaker: Dan Kammen (University of California, Berkeley (UC Berkeley))
The path to deeply decarbonized economies requires innovation and highly interdisciplinary work across diverse fields. In this talk I will examine both the theory and practice of an urgently needed ‘climate-justice nexus’. Examples will be drawn from evolving energy markets in the US, from power-sector modeling in the US, Japan, China and East Africa, from the science and policy of the built environment, and from the delivery of health care in under-resourced communities. Across these diverse cases, a consistent finding is that aggressive cost-savings for decarbonization results in significant co-benefits as defined by the UN sustainable development goals. In sum, we find a dramatic case of climate, social, and infrastructure leverage points exist to power the Just Energy Transition.
9:55-10:25 CDT
Coffee Break
10:25-11:15 CDT
Completing ISO Markets
Speaker: Dick O’Neill
This presentation focuses on the next steps to complete the design of ISO markets. These steps are to promote bid-in demand, use AIC pricing, construct better transmission expansion (optimal topology) models and extreme weather reliability. Bid-in demand improves market surplus (including reliability) and allows for efficient consumption of low-valued consumption. AIC pricing provides better more transparent price signals without make-whole or uplift payments. Reliability models should include extreme weather based on probability of historical and foreseeable events. They should calculate expected benefits pay and the beneficiaries who pay for the expansion. To achieve this goal, we need to re-examine DR programs, purge the old vertically integrated utility lexicon like ‘1 in 10’ and peanut-buttered rates.
11:15-12:30 CDT
Learning augmented algorithms for sustainable systems
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