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Rao Konidena's picture
Independent Consultant Rakon Energy LLC

Rao Konidena found Rakon Energy LLC because Rao is passionate about connecting clients to cost-effective solutions in energy consulting, storage, distributed energy resources, and electricity...

  • Member since 2014
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  • Sep 20, 2022
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Midcontinent Independent System Operator (MISO)’s Independent Market Monitor Potomac Economics’ Dr Patton has proposed penalizing renewable resources. His proposal endorses “marginal” effective load carrying capability calculation to calculate capacity credit for renewables. A marginal calculation reduces the amount of capacity credit compared to the average calculation. MISO currently uses the average ELCC for calculating capacity credit for wind.

One of Dr Patton’s reasons behind proposing a marginal capacity accreditation compared to an average method is that average accreditation leads to excess payments which lead to inflated consumer costs. But if that’s true, why has he not raised this issue so far at MISO?

He also says the average method leads to under-investment in resources with greater reliability benefits (including storage-paired renewables, longer duration storage)  and over-investment in resources with diminishing reliability benefits (undiversified intermittent type, shorter duration storage, retention of gas-only thermal  generation). Again, if that’s true, why does MISO have 769 projects in the interconnection queue with more than 100 GW of capacity? Most of these projects are solar and storage. https://cdn.misoenergy.org/GIQ%20Web%20Overview272899.pdf

Dr Patton’s proposal follows a pattern in the industry at present, which is, when it comes to renewables and energy storage - we want to propose a new method to calculate capacity credits accurately. But when it comes to thermal resources, let’s act as if everything is OK even though recent NERC FERC reports point out the deficiencies of relying on natural gas units and pipelines.   

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Julian Silk's picture
Julian Silk on Sep 20, 2022

Let me try to propose a possible (maybe idiotic)  solution for this.  If one is looking at greenhouse gas emissions (GGEs), reduction in the GGEs would be considered a "marginal revenue".  The Inflation Reduction Act prices these and it is arguable whether the price is right, but it is a start.  The Marginal Capacity Accreditations have costs, and it might be considered that these are marginal costs.  Why not consider these "marginal revenues" vs. the costs of the Marginal Capacity Accreditations, the way marginal revenues are compared to marginal costs in economics?  Just looking at changes in fixed capital stock may not tell you much about the costs vs. the revenues.

Rao Konidena's picture
Thank Rao for the Post!
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