Increased Solar Generation could help US Wholesale Electric Prices Fall

A new analysis from Berkeley Lab details the conditions necessary to increase #solar generation and help prices fall on wholesale #energy prices.


If the world increases generation by 40 or 50 percent of the total generation, then wholesale prices can drop by about as much as $16 per megawatt-hour or 25%. This study was released Wednesday from a group of researchers at Lawrence Berkeley National Laboratory who modeled 2030 scenarios in which CAISO, NYISO, SPP, and ERCOT can reach the combined solar penetration at or above 40 percent. The researchers found electricity prices will fall, but the price fluctuations may increase during the net-load hours to the greatest number of days.  

Co-Author Joachim Seel offers the study a “holistic” analysis of price formation in a decarbonizing market. He did say that data is not available to the public.  

The researchers at Lawrence Berkeley National Laboratory hopes that the results are the beginning of a three-part study stretching into the next several years. They hope to offer policymakers, utilities and grid authorities a long-range view of how our current energy choices are going to impact the world’s future,  and influence them to cope with changes in the electric sector.  

According to Seel, it could drive policymakers to, “Make sure their decisions are robust in a high wind and solar future.” 

An article by Vice entitled “Solar and Wind are Coming. And the Power Sector isn’t Ready.” came out this Saturday shares the views of this report, because it’s true the power sector isn’t prepared.  

According to the article, the people who manage US electricity markets and infrastructure must make decisions with 20, 30, or even 50-year consequences in mind, and the risk of uncertainty has them worried.  

The article points out that whether the electricity companies like it or not they are going to have to prepare to compete against solar and wind, because the prices for solar continue to decrease as innovations improve as well.  

According to Seel, “Units that are able to ramp down their generation at times when electricity prices are very low are going to be least susceptible to those average price declines other traditional, more baseline units such as a nuclear plant or a coal plant that cannot change its output level and only generate during the high-priced hours — it will feel those average price declines much more.” 

The study considered the impacts of nuclear, and what effect that can have on the future of solar energy. The Energy Information Administration’s forecast for nuclear generation remains stable. The study concludes at the current rate nuclear generation at 99 gigawatts in 2017 is going to fall slightly to 79 gigawatts in 2050.  

The models indicate retirements of some firm capacity, and that there is no indication that nuclear capacity is going to increase over the 50 years.  

Researchers plan to dive into the impacts on all types of generators including nuclear and energy storage, and the third phase of the study is going to be released in 2020 





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