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Ensuring DER inclusion in capacity markets may require a rethink of resource adequacy
I've been writing about capacity market and resource adequacy issues since January 2019. The blackout affecting California in August 2020 should serve as a reminder to everyone that the issues first identified in this January 2019 paper, continue to impact grid reliability and there is no technical reason why this has to be the case. This is all about politics and who gets decision making authority for the future grid, while the good people of California struggle through the pain. At the very core of this issue lies the reality that energy prices are dropping and that makes it challenging for parties that we rely on for grid reliability to receive sufficient revenues to maintain operational readiness to respond to events, like in California, so they propose solutions to ensure adequate revenue streams so that they can commit to fulfill their responsibilities. Some have proposed that carbon pricing is a solution - I disagree, this unfairly punishes consumers for using electricity. A feasible technical solution to the problem is within reach using a competitive, wholesale market based capacity exchange that co-optimizes resource acquisition to satisfy both State Energy/Green Buyer goals and essential grid services needed for reliability that provides grid command and control entities, generators, transmission owners, utilities and consumers a balanced platform to meet these objectives, ensuring adequate revenues to entities responsible for grid reliability, at a cost that is just and reasonable to consumers.
Ensuring DER inclusion in capacity markets may require a rethink of resource adequacy
The growth of customer-owned resources is forcing system operators and aggregators to see their value as reliability tools and rethink the concept of resource adequacy.
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