To maintain reliability, power systems must have sufficient resources available to serve demand all hours of the year - most notably during the peak demand hour or the single hour with highest system demand. Under-investment in generation capacity can result in undesirable periods of supply shortages, while over-investment can result in costly assets sitting idle driving up prices for consumers. Since constructing electricity generation resources can take years to a decade, it is challenging to identify new investments needed to balance cost and future reliability while also meeting other objectives such as addressing climate change.
It is become more challenging to address these issues as our electricity systems are becoming increasingly reliant on weather-dependent renewable generation resources, since periods of peak demand are not always aligned with periods of maximum renewable supply. A traditional approach to long-term system planning has been to forecast future peak demand, and then to invest in enough generation capacity to exceed the anticipated peak demand by a so-called planning reserve margin to account for uncertainties. However, this metric has become outdated now that installed capacity is an increasingly poor indicator of a generator’s ability to serve peak demand. Moreover, future power systems will rely on a range of different resources (generation, energy storage, demand response, coupling to other sectors) to maintain reliability in the grid. As a result, new approaches are needed to assess resource adequacy in future power systems.
Researchers at Argonne are currently exploring several new and innovative approaches to ensuring that resource adequacy is achieved in power systems of the future. Some examples include:
- Assessing how system cost and reliability are impacted by the different resource adequacy frameworks and incentive mechanisms that are commonly used today, including centralized planning, various capacity remuneration mechanisms including competitive capacity markets, and energy-only frameworks that rely fully on short-term price signals to provide market entry and exit incentives.
- Developing innovative models and tools to assess the ability of emerging individual resources (e.g., energy storage) to provide resource adequacy under different system conditions.
- Developing new models that replicate decision making of profit-seeking entities in competitive markets.
- Reviewing existing resource adequacy mechanisms and analyzing the potential impacts of changes in their design, including updated reserve and capacity demand curves, new methods for assigning capacity credits to emerging resources, and shifting from capacity-based mechanisms to energy-based long-term remuneration mechanisms.
- Investigating how changing climate and weather patterns impact the reliability in future power systems, and how to best capture these effects within capacity expansion models.