Author: REsurety

Q4 2022 State of the Renewables Market Report

Carl Ostridge

A view of Q4 2022 U.S. renewable energy performance

REsurety State of the Renewable Market report

REsurety creates the State of the Renewables Market report every quarter to provide readers with data-driven insight into the value and emerging trends of renewable generation in U.S. power markets. We use our domain expertise in power markets, atmospheric science, and renewable offtake to analyze thousands of locations and summarize key findings here. All of the data behind this analysis is curated by REsurety’s team of experts and available via our software products. It includes aggregated metrics for wind and solar projects operating in the U.S. All summaries are calculated using hourly-level data, and all energy-weighted price metrics are calculated using concurrent weather-driven generation and energy price time series. Please fill out the form at the bottom of the page to access the full report, the Editor’s Note is below.

Carl Ostridge, Senior Vice President of Analytics Services at REsurety

Carl Ostridge
SVP of Analytics Services

Editor’s Note:

For Renewables, Timing is Everything

The final quarter of 2022 closed out with some extreme weather across most of the country and while lots of comparisons were quickly drawn against 2021’s Winter Storm Uri, December of 2022 also provided useful insights into the changing dynamics of power markets as renewable energy penetration rates increase. While the impact on market prices was smaller overall compared to Uri, one of the most interesting outcomes from the winter weather was present in ERCOT and highlighted the fact that timing is everything when it comes to capturing value from renewable energy assets.

The map in Figure 1 shows the “capture rate” potential of solar assets across the ERCOT footprint in December, 2022. Capture rate is the ratio of generation-weighted price and simple average price during the period in question and shows how much of the average price is ‘captured’ by, in this case, solar assets. Immediately visible is the interesting geographic trend across the ERCOT footprint, with the highest solar capture rates occurring in the east and west extremities while the lowest capture rates occur in the center. To understand what’s driving this, we need to look at the underlying data for one specific day.

Solar Capture Rate at ERCOT North Hub RT, December 2022
Figure 1: Solar Capture Rate at ERCOT North Hub RT, December 2022
Modeled Generation for 100MW Solar Assets Located in the Houston and Midland Regions & Market Prices, December 23rd, 2022
Figure 2: Modeled Generation for 100MW Solar Assets Located in the Houston and Midland Regions & Market Prices, December 23rd, 2022

Figure 2 shows the hourly average real-time market prices on December 23rd, 2022 as well as the generation of two hypothetical solar assets; one in west Texas and another close to the Houston area. The highest prices during this day occurred early in the morning and in the evening, meaning that most of the solar output during December 23rd did not coincide with the high prices. This leads to the very low overall capture rates in December, ranging from ~45-60% across ERCOT. But importantly, the lower prices during the day are not actually a coincidence – peak solar output has more than doubled since 2020 and there was approximately 8 GW of solar generation during the middle of the day on December 23rd, 2022, enough to move the grid out of scarcity pricing mode and back to more “normal” prices. This dynamic also creates values for locations with early sunrises (in the east) and late sunsets (in the west). The difference in sunrise and sunset times in Midland and Houston on December 23rd was approximately 30 minutes, but that was enough to secure an additional $50/MWh of value. Solar assets located close to Houston would have been able to capture the value of the high market prices before the sun came up on most of the existing solar assets further west and prices fell. That $50/MWh difference might not sound like a lot, but considering that solar capacity in ERCOT is predicted to exceed 20 GW by 2025, this type of ‘duck curve’ where solar generation serves to systematically reduce prices during the day is likely to happen with increasing frequency. Therefore, siting solar assets in locations able to naturally take advantage of the ramp hours may become increasingly valuable.

Finally, this shift in ERCOT’s grid mix, price dynamics, and subsequent drop in solar capture rates is predicted by REsurety’s Weather-Smart Fundamentals modeling. REsurety models ERCOT’s grid in 5 different future states, including high storage and net zero, and computes outcomes based on weather data representing the past 40+ years to derive the data in Figure 3 below.

ERCOT Solar Capture Rates Predicted by REsurety's Weather-Smart Modeling
Figure 3: ERCOT Solar Capture Rates Predicted by REsurety’s Weather-Smart Modeling

The average solar capture rate in ERCOT is forecast to drop below 100% by 2024, driven by the type of event we’re highlighting here – solar generation is high enough to reduce prices during the day and scarcity pricing is moved to the early morning and evening hours. As ever, timing will be the key to renewable energy value.

Q4 2022 Report Download

"*" indicates required fields

Name*
This field is for validation purposes and should be left unchanged.

8 Minutes Podcast: Emissions First

Eight Minutes podcast
Eight Minutes Podcast logo

Not all renewable power projects are alike. A wind project placed next to another wind project may not have the same impact on reducing carbon emissions as one placed near a coal facility. The location and timing of when the renewable power is produced is important in order to truly maximize the impact.

Enter REsurety, an analytics firm that is providing large commercial & industrial consumers of electricity with the data and insight needed to maximize the value from these renewable projects. Lee Taylor, CEO of REsurety, joins Paul Schuster to discuss the importance of an Emissions First perspective on project development.

You can find the full podcast as well as a condensed version here.

Weather-Smart Fundamentals Modeling Gives More Meaningful Power Price Forecasts

Jessica Tomaszewski, Senior Research Scientist at REsurety
Author: Jessica Tomaszewski
Senior Research Scientist

Forecasting of power prices is a part of everyday life for the renewables industry. Accurate power price forecasts are necessary to support the green energy transition by empowering investment, procurement, and financial-planning workflows of buyers, sellers, and investors of clean energy.

There are two primary types of models used to forecast power prices: Statistical Models and Fundamentals Models. Statistical models learn relationships between prices and other variables based on previously observed outcomes and apply these relationships to make predictions about the real world. Such models are useful in short-term, high-frequency workflows like near-term trading, where market behavior is not expected to deviate significantly from recent history. However, statistical models struggle in longer-term applications where evolving grid mixes, generation technologies, and market designs mean that the future will look different than the past. Fundamentals models can capture the impact of these changes, which is key for making long-term predictions of power prices.

Fundamentals models offer users the benefits of extendability, flexibility, and transparency in their predictions. However, the heavy computational burden of these models has traditionally required price forecasters to make simplifying assumptions about the weather. Much of the industry uses a “Weather-Normal” or “Typical Meteorological Year” to represent forward-looking weather conditions in their price models. But “atypical” meteorological conditions like heat waves, cold snaps, and severe storms can all cause dramatic surges in electricity demand, alter wind and solar supply, and affect prices. A price model that only uses a typical meteorological year will miss the extreme prices that come with extreme weather, resulting in a dramatically different modeled outcome from the true range of expected possibilities.

REsurety has taken a different, Weather-Smart approach: Our price model captures the hourly signal of 40 representative weather years in a computationally efficient way, unlocking several key benefits to customers of our fundamentals-based price models.

Key Benefits of Weather Variability in Price Models

A More Representative Mean

Weather variability is an important driver of the economics of any type of clean energy project, but storage is particularly sensitive to atypical weather conditions. For storage projects engaging in energy arbitrage, profitability relies on buying energy when prices are low and discharging it when prices are high. Energy arbitrage becomes more lucrative as the spread between high and low prices increases. Forecasting price using a weather-normal year results in inaccurate forecasts of storage value because it misses the extremes of price that drive value for storage resources. Simply put, weather-normal modeling materially undervalues the energy arbitrage revenue opportunity of storage projects.

When adequate weather variability is represented in a price model, the predicted mean value of a storage project will better reflect these high price events, as illustrated in the schematic below. Two cases are considered. The blue line represents the case with a distribution of daily forecasted storage project values created using prices produced by a Weather-Smart model fed with the signal of 40 weather years. The second case represents in green the distribution of daily storage values based on prices produced by modeling a single weather-normal year of data. While both distributions of storage project value report a similar median, the Weather-Smart distribution produces a mean value that is significantly higher than its median. In this case, the mean can serve as a simple, single quantity that distills the potential profitability of a storage project in a way that acknowledges the extreme events contributing to its value.

Visibility into Range

REsurety’s fundamentals price model gives users unique insight into their price forecasts, and by modeling hourly weather variability representative of 40 years, we elevate this insight to give visibility into a broad range of outcomes. For example, a forecast driven by a weather-normal year of input data will give a forecasted wind capture rate for a typical summer, perhaps at 80%. But how can a clean energy buyer set expectations with their financial planning team in the event of a warmer-than-average summer with lower-than-average wind speeds that yields a capture rate of only 60%? A wide distribution of potential outcomes exists depending on the weather conditions, and visibility into this range of outcomes is important for making financial decisions and planning for downside scenarios. This approach is outlined in greater depth in another REsurety blog post.

Better-Informed Portfolio Optimization

Visibility into range provided by Weather-Smart price forecasts lends itself to better portfolio optimization as well. Portfolio risk mitigation is possible through understanding the tails of distributions of individual assets, which price models with awareness of adequate weather variability can provide. By optimizing portfolios to include assets that provide value in countering scenarios, the overall portfolio risk can be narrowed. For example, a forecasted summer month that has low wind speeds and high temperatures will likely be profitable for solar projects, which can help offset low wind value or Fixed Volume Swap losses. A Weather-Smart price model that is aware of such anomalous weather conditions allows for this kind of portfolio optimization.

Learn more about Weather-Smart fundamentals forecasting in this brief video.

About the author
Jessica Tomaszewski is an atmospheric scientist with experience in boundary layer meteorology, numerical weather prediction, and wind resource assessment. Prior to joining REsurety, Jessica completed a National Science Foundation Graduate Research Fellowship with a focus on simulating interactions between wind farms and the lower atmosphere, as well as two summer internships at NextEra Analytics investigating improvements to the wind farm wake modeling process. As a research scientist at REsurety, she builds and investigates new techniques for analyzing renewable resources and mitigating their financial risk.

Jessica holds a PhD and Master’s degree in Atmospheric and Oceanic Sciences from the University of Colorado. She also holds a Bachelor’s degree in Meteorology from the University of Oklahoma. Learn more about Jessica here.

REsurety and WattTime to Make Marginal Emissions Data Widely Available to Support More Impactful Climate Action

Solar Wind Energy

The two environmental technology organizations plan to greatly increase the availability of data that enables an impact-based approach to carbon accounting and decision making.

REsurety logo

Contact:
Tara Bartley, [email protected]
Nikki Arnone, [email protected]

Boston, Mass. and Oakland, Calif. – January 10, 2023 – REsurety, Inc., a leading analytics company empowering the clean energy economy, and WattTime, an environmental tech nonprofit working to multiply positive climate impact, have today announced that both organizations plan to increase the availability of high-quality marginal emissions data. These data can support impact-based decision making and more accurate carbon accounting for climate-conscious corporations and other institutions that have committed to net-zero and science-based targets. REsurety and WattTime are collaborating to make this critical data available at no cost to qualified end users.

“We’ve heard the growing calls from the private sector for stronger climate action, which have emphasized the urgent need for access to transparent emissions data. As mission-driven organizations in this space, we feel it’s our responsibility to take meaningful action,” said Lee Taylor, CEO of REsurety.

On December 13, 2022, a group of leading global corporations and investors, including Akamai Technologies, Amazon, General Motors, Hannon Armstrong, Heineken, Intel, Meta, Rivian, Salesforce, and Workday, launched the Emissions First Partnership, calling for a shift in corporate carbon accounting standards away from megawatt-hour matching and toward an emissions impact-centric system. Their proposed principles for electricity accounting focus on maximizing greenhouse gas reductions. Marginal emissions data, which measures the carbon impact of consuming or generating energy at a given time and location, is a critical tool for maximizing and accurately measuring real-world carbon impacts.

“This year saw an extraordinary surge in the number of companies intentionally optimizing electricity use and renewable energy generation to slash emissions — an urgently needed climate trend that’s making a real difference,” said Gavin McCormick, founder and executive director of WattTime. “We and REsurety strongly agreed it’s important to share access to open, transparent, validated data from around the world that will empower organizations to more easily track and execute on emissions reduction goals.”

REsurety and WattTime will make historical marginal emissions data available to qualified end users including researchers, corporate sustainability practitioners for accounting, and other non-commercial end users at no cost within the next three months. This improves on the temporal and spatial granularity of the global annual country-level marginal emissions data already available from the UNFCCC.

Furthermore, the two organizations have committed to expanding the geographies covered by their high-quality marginal emissions data. Increased data coverage will enable the standardization of reporting and analytical frameworks, data integrations, and usage patterns for companies within the U.S. and around the world. By the end of 2023, REsurety will provide nodal marginal emissions data across all U.S. wholesale markets and WattTime will expand global data coverage to include parts of two or more additional continents.

“Salesforce has been procuring clean energy since 2013, and last year reached 100% renewable energy for its global operations. But we’ve also seen first hand that not all projects deliver the same impact. By shifting the focus from megawatt-hour matching to emissions reductions, we can focus on maximizing decarbonization impact in the regions where the world needs it the most. High-quality marginal emission data is critical to enable this work,” said Megan Lorenzen, senior manager of sustainability, Salesforce, and co-author of the company’s More than a Megawatt report.

Both REsurety and WattTime have published research and recommendations supporting the use of marginal emissions data for impact-centric carbon accounting. In September 2022, WattTime published a white paper focused on the concept of “impact accounting” to ensure emissions reductions counted on paper actually translate to changes in the real world. In October 2022, REsurety shared its analysis demonstrating that such an impact-based Scope 2 accounting approach is much more effective than alternatives in encouraging behavior that leads to real-world decarbonization.

“Addressing the impacts of climate change is the biggest challenge of our time, which is why Amazon is committed to reaching net zero carbon by 2040 and why we are on a path to being powered by 100% renewable energy by 2025 — five years ahead of our original commitment. Accounting for carbon emissions is an important part of this work, and we need to ensure the best data and methods are used to help accelerate the decarbonization of the electricity grid as quickly as possible. We welcome this commitment from REsurety and WattTime for increased accessibility and geographical coverage of electricity grid data and support their efforts to further strengthen this data,” said Jake Oster, director, public policy, AWS.

In November of 2021, REsurety and WattTime partnered to bring the strengths of their respective data sets together. Since then, the two groups have collaborated closely with corporates, investors, nonprofits, and other businesses in developing the data needed to support decisions focused on maximizing emissions impacts. Today’s announcement advances this growing data ecosystem.

For more information and to learn more about accessing the upcoming data inventory, contact [email protected] or go to www.watttime.org/contact.

About REsurety
REsurety is the leading analytics company empowering the clean energy economy. Operating at the intersection of weather, power markets, and financial modeling, we enable the industry’s decision-makers to thrive by providing best-in-class value and risk intelligence, and the tools to act on it. With the world’s most sophisticated clean energy investors, advisors, buyers, and developers as clients, REsurety empowers clients to thrive in the dynamic, complex, clean energy-fueled future. For more information, visit www.resurety.com or follow REsurety on LinkedIn.

About WattTime
WattTime is an environmental tech nonprofit that empowers all people, companies, policymakers, and countries to slash emissions and choose cleaner energy. Founded by UC Berkeley researchers, we develop data-driven tools and policies that increase environmental and social good, including Automated Emissions Reduction and emissionality. WattTime is also the convening member and cofounder of the global Climate TRACE coalition. During the energy transition from a fossil-fueled past to a zero-carbon future, WattTime ‘bends the curve’ of emissions reductions to realize deeper, faster benefits for people and the planet. For more information, visit https://watttime.org.

Employee Spotlight on Jessica Tomaszewski, Research Scientist

“I decided to lean back into my love for the environment and found that I could apply my expertise in meteorology to support the fight against climate change.”

“I grew up in a northwest suburb of Chicago called Crystal Lake. As a child, I always had an interest in science, especially natural and physical science like earth science, space, and the environment. I remember in elementary school I was the founder of a “Save the Environment” club with some of the other kids in my neighborhood, so you could say sustainability and climate change have always been important to me. My passion for weather actually grew out of fear initially. When I was a kid I was terrified of thunderstorms, and I remember a small tornado narrowly missed my town when I was maybe five or six years old, and that moment left a deep impact on me by turning that fear into curiosity: I needed to know how tornadoes happen, why the clouds looked the way they did, why the clouds were located where they were. And so from that moment on – and I remember declaring in sixth grade – I was going to be a meteorologist, and I stuck to it.

“I ended up following that interest in weather all the way to Norman, Oklahoma, which is where I went to college to study meteorology at the University of Oklahoma. And there I quite literally followed the weather sometimes by doing a decent amount of storm chasing. I’ve seen some pretty mind blowing tornadoes, which was definitely a highlight of my time there in Oklahoma. Then eventually during college I decided – probably to the relief of my mother – that severe weather and storm chasing was more of a hobby of mine than a career choice. So I decided to lean back into my love for the environment and found that I could apply my expertise in meteorology to support the fight against climate change.

“I pivoted my focus to wind energy, which is what I researched in graduate school at the University of Colorado. My PhD dissertation there consisted of running lots of weather simulations of wind farms and how wind farms interact with the area around them, and that’s what steered my journey into the energy space via meteorology.

“My manager at REsurety, Jennifer Newman, and I have a longer history than just our time at REsurety. When I was an undergrad at the University of Oklahoma, Jennifer was a grad student there, so I kind of knew of her a little bit. When I went to grad school, Jennifer was a postdoc at the National Renewable Energy Laboratory, also in Colorado. So there we interacted a little bit more through similar professional development groups and peer mentoring groups, and she eventually took the job at REsurety a couple years later. A few years after that, when I was getting ready to defend my PhD, she posted on LinkedIn that she was looking to hire a research scientist – someone who specializes in wind energy modeling – and I was like, ‘Oh, that’s me!’. So I applied and came over to Boston and I loved the people and the culture and the work that we do. It was a great fit and I knew right away that REsurety is really where I wanted to be.

“What excites me about the work that I do is getting to work with tons of really interesting data, and getting to repackage that data into stories of sorts, so interesting visuals or concepts to explain interesting or difficult-to-understand topics, and using those stories to then drive actions that support the clean energy transition. All that is something I’m really passionate about.

“My hobbies tend to sit on opposite ends of the exertion spectrum. I’m either on the couch in some corner of the internet or watching Netflix or reading, or I’m in the gym or on a run or trying Pilates and yoga. Pilates and yoga were definitely hobbies that I picked up in quarantine. I was taking a lot of Zoom gym classes and found this great instructor who’s in California, but her classes were only $5 and she was super fun to do Pilates with. That was one silver lining to the pandemic quarantine period. I also recently got a bike, so I’ve been having fun zipping around Boston on two wheels and exploring the area a little differently than I have in the past.

“I also have a dog. He is aptly named Cloudy, and he’s a Border Collie and Corgi mix who’s very cute and gets to take up a little bit of my time outside of work as well. I’ve had him for six years, and I got him in grad school, so he’s been my little cloud buddy for a while now.”

Learn about other REsurety employees.

REsurety’s Weather-Smart Fundamentals Power Price Forecasts are Now Available

Solar Wind Energy
Adam Reeve
Adam Reeve
SVP of Software Solutions

Here at REsurety, we know how important accurate forecasting is. We know that our customers need credible, explainable predictions of the expected value and upside/downside risks of the value of clean energy in order to make long-term investment or procurement decisions. And for that reason, for the better part of the last ten years, our team has been developing and improving upon long-term power price and renewable generation forecasting models. Up until now, however, those forecasts have relied on machine-learning methods and have only been available on a limited basis to customers via our Advisory services. We’re excited to announce that as of today, we have released a new fundamentals forecasting model, and are making it available across all of our product and service offerings including our SaaS platform, REmap.

REsurety developed our latest fundamentals forecasts in order to give our customers unprecedented ease of access and confidence about the future value of their clean energy projects. With these newly released forecasts, you can:

  • Develop an optimal portfolio: simulate portfolio performance under a range of outcomes to develop/manage your portfolio.
  • Calculate project-specific forecasts: all of our forecasts are natively calculated using project-specific hourly generation, so you can calculate the expected performance of your project with one click in REmap.
  • Stress test: gain visibility into downside risk driven by weather variability or changes in market dynamics, e.g. increased storage penetration, a hot summer/winter, or the impact of high renewables build out.

The Importance of Weather Variability

The most distinguishing characteristic of REsurety’s forecasts is that we don’t just model a single weather-normal year (e.g., an 8760), because we know that models based on 8760s will likely overestimate value for renewables, underestimate value for storage, and underestimate variability across all projects. Instead, we simulate ~40 years of representative hourly weather – and the impact that has on every project and load center on the grid – to develop a thorough distribution of possible weather outcomes. Importantly, this means that hourly project-specific generation is an input into our model, as opposed to being calculated after the fact.

This extremely data-intensive and compute-hungry approach is designed to give customers the answers that they need about the future. Users can: run sophisticated portfolio simulations across projects and markets using realistic and consistent weather inputs; confidently calculate the value of storage, where profitability is highest during periods of extreme weather and market volatility; and calculate the expected value and downside risk in their PPAs for accurate budgeting.

Unlike traditional forecast providers, REsurety’s fundamentals-based forecasts realistically take into account a range of possible weather conditions and the impact that they have on each project in order to solve for power prices in each hour. The plot below shows the value of the approach: for each of the five market scenarios, 40 representative weather-years (represented by thin lines) are simulated in the model. We’re calling this realistic approach to weather variability “Weather-Smart.”

The value of full weather distributions: weather and various market scenarios drive variability in the capture rate for solar generators.

“We’re excited to bring together our strengths in Atmospheric Science and Power Market Analytics in this model release,” said Adam Reeve, SVP of Software Solutions at REsurety. “Traditionally, those two fields have been separate in the industry, limiting the ability for customers to apply forecasts to their clean energy projects or portfolios. This Weather-Smart approach gives users a much more robust way of forecasting the value of clean energy.”

Why A Fundamentals Model?

REsurety’s newest forecasts leverage an hourly production cost model that accurately represents the operational and market design complexities of the power markets. It takes into account the physical power flows, hourly generation from each renewable plant, hourly load, and future market conditions inputs to solve for hourly power prices. As an example, this means that, in each hour, we model the generation at every renewable plant on the grid (based on localized wind speeds / solar irradiance, turbine / panel type, etc.) as well as production costs for dispatchable generators. We also model load in each hour, as well as the transmission limitations of the grid and other market-specific characteristics. Given these inputs and constraints, we then solve for power prices in the same way that a system operator (such as ERCOT) would.

After years of creating advanced models, we’ve learned that such a rigorous approach has a number of advantages over machine-learning (ML) models. Specifically, ML models struggle to make accurate predictions about a future that may look very different from the recorded history – such as predicting price formation in a market with a rapidly changing installed base of grid-scale storage. Results from ML models are less interpretable, making it harder for customers to understand why a certain price was produced – and by extension whether it is reasonable or not. Lastly, ML approaches are less capable of accurately simulating how changes to market rules or regulatory policies will impact prices. For these reasons, REsurety has invested in the latest fundamentals-based model that we’re excited to release today.

REsurety’s Weather-Smart fundamentals power price forecasts are currently available in ERCOT, with CAISO available later this year and full market coverage by mid 2023.

To learn more, please visit http://resurety.com/remap or email [email protected].

Solar + Wind Finance & Investment Summit 2023

REsurety is a proud Platinum sponsor of the Solar + Wind Finance & Investment Summit. Book a meeting with us

REsurety’s co-founder & CEO Lee Taylor will be on the panel: Power Markets Outlook: Valuation & Price Curves on March 13, 2023 at 1:30 pm at the Solar + Wind Finance & Investment Summit in Phoenix, AZ. 

Session description: 

The past year has seen major disruptions in many power markets: extreme weather, the War in Ukraine/gas pricing, interconnection queue pauses, and other capacity market issues have affect forward price curves, risk assessment, and long-term project valuations. This session will discuss the state of US power markets, providing perspectives on pricing curves, project valuations, and the economic useful life of projects.

• Are capacity markets functioning properly or are they becoming a hindrance to renewable deployment?
• Will interconnection queue reforms, like the 2-year reviews pause in PJM and ‘first-ready, first-served’ enable more efficiency and lessen wait times?
• How are changes to forward pricing and energy futures affecting the bankability of projects, and what does the uncertainty created by the Ukraine War mean for projections and assumptions?
• Are the mid-term elections affecting assumptions in the power markets?

Moderator:
Kenneth Irvin, Partner, Sidley Austin LLP
Panelists:
Ken Fleming, Managing Director, Power Origination for the Americas, BP
Yoann Hispa, CEO and Co-Founder, Landgate
John Larkey, Vice President, Power Marketing, National Grid Renewables
Jim Nutter, ASA, Managing Director, Marshall & Stevens, Inc.
Lee Taylor, Chief Executive Officer, REsurety

Access the agenda for the entire event here.

If you haven’t registered yet, register to attend the summit here.

Book A Meeting With Us

"*" indicates required fields

Name*

Q3 2022 State of the Renewables Market Report

A view of Q3 2022 U.S. renewable energy performance

REsurety creates the State of the Renewables Market report every quarter to provide readers with data-driven insight into the value and emerging trends of renewable generation in U.S. power markets. We use our domain expertise in power markets, atmospheric science, and renewable offtake to analyze thousands of locations and summarize key findings here. All of the data behind this analysis is curated by REsurety’s team of experts and available via our software products. It includes aggregated metrics for wind and solar projects operating in the U.S. All summaries are calculated using hourly-level data, and all energy-weighted price metrics are calculated using concurrent weather-driven generation and energy price time series. Please fill out the form at the bottom of the page to access the full report, the Editor’s Note is below.

Carl Ostridge

Carl Ostridge
SVP of Analytics Services

Editor’s Note:

Grid Congestion Hurts Project Economics & The Environment

Project developers know well the perils of transmission constraints and grid congestion when it comes to their project’s economics. If you locate your project at a point on the grid with limited availability to move clean electricity to where it will be consumed, local power prices will be much lower than average prices across the wider grid. This phenomenon is often referred to simply as “basis” but we’ll be more specific here and call it “price basis”. Price basis is bad for project economics for two reasons – first, the project’s merchant revenue (the value of electricity sold to the system operator at the point of interconnection) can be vastly reduced and second, if the project enters into a financial agreement to sell their electricity at a hub price (an aggregate across a large grid area) they may end up owing large sums of money that their merchant revenue cannot support.

The magnitude of price basis is hard to predict and, without investment in transmission or energy storage, tends to get worse over time as more wind and solar projects are added to the grid in locations with high resource availability. Developers and consultants spend lots of time, money and effort building models to analyze historical basis and forecast future scenarios to decide where to build projects and inform their economic outlook.

However, the transmission constraints and congestion that drive price basis also lead to what we’ll refer to as “emissions basis”. When a transmission constraint binds in a region with plentiful wind and solar generators, incremental clean energy (behind the constraint) often curtails other existing clean generators rather than carbon-emitting thermal generators elsewhere on the grid. This leads to emissions basis – wind and solar projects subject to transmission constraints avoid fewer tons of carbon emissions per MWh generated than the grid-wide average. In the absence of additional transmission or energy storage infrastructure, building additional wind and solar facilities in these regions has a diminishing environmental impact. Each new facility contributes less and less to the ultimate goal of decarbonization.

Figure 1: Price basis vs emissions basis for wind and solar projects in ERCOT and PJM (Jan-Jul 2022)

The strong correlation between price basis and emissions basis is highlighted in the plot below. Each point represents a wind or solar project in ERCOT or PJM and the values of price and emissions basis is calculated for the period January to July 2022. It’s clear from the plot that the projects with the highest levels of negative price basis have the lowest environmental impact while those with positive price basis tend to displace significantly more carbon emissions from the grid. Of course, there are many nuances to the data beyond this high-level correlation – trends based on location, technology, time of day and season – that REsurety’s Locational Marginal Emissions data can expose.

REsurety calculates Locational Marginal Emissions values at the nodal level with hourly resolution to provide the information necessary for project developers, investors, and offtakers to make informed decisions about where to build or invest in new projects to maximize their revenues and environmental impact.

We’ve expanded this report to provide information on both the financial and environmental value of wind and solar generation in the U.S. We hope you find this report informative.

Q3 2022 Report Download

"*" indicates required fields

Name*
This field is for validation purposes and should be left unchanged.

Employee Spotlight on Austin Thomas, Power Markets Research Associate

“The weather had the fun, sciency things going on, and I always had an interest in it.”

Austin Thomas REsurety

“I was born and raised in the Chicago suburbs. I’m a very proud Chicagoan, always will be. Growing up I always had an interest in science in general, in various forms. I watched a lot of PBS documentaries, Nature, Nova – all that good stuff. I’d also watch the local news, which is probably strange for a child in elementary or middle school, but the two segments that always got my attention were weather and sports. The weather had the fun, sciency things going on, and I always had an interest in it. In high school I took a lot of science classes and I applied to meteorology programs for university. I ended up going to the University of Wisconsin, which was the first one that I visited and I loved it from the start. 

“I didn’t quite have a specialty area within atmospheric sciences or meteorology that I wanted to focus on. In 2013, organizations that might fund a Master’s or PhD student working in a research university weren’t sure what their budget was going to look like due to a government budget sequester. That trickled down to impacting admission decisions at universities for potential Master’s students like myself coming in to do research, and I was one of many students impacted. I took that as an opportunity to look somewhere else and try something different, so I decided to go to the University of Reading in England. I never had a study abroad experience during undergrad and I was excited to live overseas for a while. Reading has an excellent Meteorology department so it’s not like I was trading academic rigor for other life experiences. It was fulfilling in multiple senses. I had a really good time living in the UK, and I made a lot of great friends. I make regular trips back there to visit them and see football matches or explore parts of the UK I haven’t been to.

“I was there for a year and a half and in the final portion of the program I was fortunate enough to study wind energy modeling. I had spent a lot of time learning how the atmosphere works and learning about climate change prior to this. My knowledge of climate change was pretty good by then and it was very clear that this is a problem that affects all of us and we need to be acting swiftly on it. I’m a decent coder, I was not an amazing mathematician, so I was probably not going to write the next great climate model. I thought I could contribute to the solution side of climate change instead. 

“I got my PhD at the University of Vermont, and towards the end of it, I had the opportunity to present at a conference for the American Meteorological Society in 2020. I was able to road trip down from Vermont, and it was there that I actually met quite a number of REsurety employees. At that point I hadn’t heard of REsurety, but by being in more energy-focused sessions within the conference I encountered REsurety folks and attended their talks and did the classic networking thing. You always hear that networking is a skill to develop and you never know when it’ll pay off. I’m not the most gregarious or social person but in this case, it definitely paid off when I joined REsurety two years after that conference. After getting my PhD I ended up taking a job in consulting which was based in New York City. I was there for a little over a year, but I didn’t enjoy it as much as I thought I would. But then I saw that the power markets team at REsurety was hiring, and they were looking for someone to work on northeast markets, which is one of the main focus areas I had. So everything kind of fell into place pretty nicely.

“The electricity system is such a complex and nuanced structure with a lot of intricate moving parts, and it also underpins so much of what makes a modern society, particularly in America. It’s fun to work on something that is so foundational to everyone. Then there’s the whole climate change piece layered on top, and with my background that means that I’m highly motivated and constantly thinking about what our behaviors and decisions in the electricity sector can mean for lessening the impact of climate change. I spent a decade of my life studying this, and having an energy systems and meteorology background makes me feel like a tailor-made fit to be a REsurety employee.

“I watch a lot of sports, primarily the Premier League in the UK and college sports – I’m a big Badgers fan. I also try to spend a decent amount of time outside. With the amount of time I spend staring at my computer either in a personal or professional capacity, I definitely try to balance that out with outdoor things, whether it’s taking a walk around the neighborhood, going for a hike, or taking a day trip somewhere. I’m hoping to get back into golf next year. I played from time to time in high school, and I like following professional golf too. I also love visiting breweries and trying out new beer. When I lived in Vermont I went to every single brewery in the state over the course of about two years, which was about 55 in total.”

Learn about other REsurety employees

REsurety at VERGE 22

The Climate Tech Event

REsurety’s Adam Reeve, SVP of Software Solutions, will be part of the panel: Optimizing Batteries for Grid Decarbonization on October 26th at 9:00 am at the VERGE 22 climate tech event in San Jose, CA. He will be joined by other thought leaders from companies like Meta and Broad Reach Power.

Session description: 
Energy storage is the lynchpin to a clean energy future. But today, energy storage is optimized to maximize money – not decarbonization. Join this session to hear about a collaboration that combines emerging technology and contract models to maximize emission benefits.

While the case study focuses on energy storage, the lessons are applicable to all deploying clean energy technologies. This model highlights how companies and stakeholders could ensure clean energy deployments are supporting rapid decarbonization.

Learn more here.

In addition to Adam Reeve, there will be other members of the REsurety team in attendance. To meet with us at the show, please email: [email protected].

Leading Global Organizations Launch New Consortium to Assess Climate Benefits of Energy Storage

Wind power

The Energy Storage Solutions Consortium will develop a first-of-its-kind methodology to quantify the greenhouse gas emissions benefits of stored energy usage.

REsurety logo
Broad Reach

Sept. 14, 2022 (Menlo Park, Calif.) – A group of leading organizations, including Meta, REsurety, Broad Reach Power and others, has announced the formation of the Energy Storage Solutions Consortium, a consortium to assess and maximize the greenhouse gas (GHG) reduction potential of electricity storage technologies. The group’s goal is to create an open-source, third-party-verified methodology to quantify the GHG benefits of certain grid-connected energy storage projects, and to ultimately help add a tool for organizations to create credible progress toward their net zero emissions goals.

Once approved by the third-party Verra through the Verified Carbon Standard Program, the standard would be the first verified methodology to quantify the emissions benefits of large-scale energy storage facilities, and would provide valuable guidance such as when to deploy stored energy to deliver maximum emissions reduction benefits. 

“At Meta, we are committed to accelerating the transition to the carbon-free grid of the future, and large-scale energy storage is a critical part of that transition. Having achieved 100% renewable energy for our global operations, we are now looking to help move the energy storage industry forward by addressing next-level challenges and opening pathways that will help drive high impact emissions reductions on the grid,” said Peter Freed, director of energy strategy at Meta. “We are excited to launch this consortium in partnership with these industry-leading organizations, who will bring diverse perspectives and experience to the development of a robust, transparent methodology.”

“We need to decarbonize the grid as quickly as possible, and to do that we need to maximize the emissions impacts of all grid-connected technologies – whether generation, load, hybrid or standalone storage,” says Adam Reeve, SVP of software solutions at REsurety. “Enabling this sort of decarbonizing activity is the exact reason why we invested in developing high-resolution Locational Marginal Emissions. Energy storage is a technology that has huge potential, and we’re delighted to partner with industry leaders in this forward-thinking and collaborative effort to develop a global standard for energy storage benefits.”

“Battery storage will play an increasingly important role in delivering reliable and affordable power to homes and businesses as we move toward a 100% renewable energy grid. As the leading utility-scale battery storage platform in the U.S., we’re looking forward to working with other industry leaders to be able to quantify the important GHG reduction benefits of large-scale energy storage facilities and help organizations take climate action,” says Paul Choi, EVP of origination at Broad Reach Power.

In order to calculate the GHG benefits of large-scale energy storage facilities, the consortium will leverage locational marginal emissions. This concept measures the tons of GHG emissions displaced through the charging and discharging of energy storage facilities on the grid at a specific location and point in time.

In addition to steering committee members Meta, REsurety and Broad Reach Power, the consortium includes a number of advisory committee members. These advisory members include leading technology companies, emissions data providers, investors, storage developers and service providers, and non-governmental organizations among others.

Members include:
3Degrees Group, Inc., Akamai Technologies, Clearloop, Equilibrium Energy, Fluence, General Motors, GlidePath Power Solutions, Habitat Energy, Hannon Armstrong, Jupiter Power, Longroad Energy, Marathon Capital, Microsoft, Primergy Solar, Quinbrook Infrastructure Partners, RES Group, Rivian, Rowan Digital Infrastructure, Stem, Tabors Caramanis Rudkevich, TimberRock, UBS Asset Management, and WattTime.

The Energy Storage Solutions Consortium is also partnering with Perspectives Climate Group, the German consultancy dedicated to helping its clients achieve net zero GHG emissions and to developing practical solutions for accounting of emission reductions from innovative climate- friendly technologies.

About Meta Platforms, Inc.
Meta builds technologies that help people connect, find communities and grow businesses. When Facebook launched in 2004, it changed the way people connect. Apps like Messenger, Instagram and WhatsApp further empowered billions around the world. Now, Meta is moving beyond 2D screens toward immersive experiences like augmented and virtual reality to help build the next evolution in social technology. about.facebook.com

About REsurety
REsurety is the leading analytics company empowering the clean energy economy. Operating at the intersection of weather, power markets and financial modeling, we enable the industry’s decision-makers to thrive through best-in-class value and risk intelligence, and the tools to act on it. For more information, visit www.resurety.com or follow REsurety on LinkedIn.

About Broad Reach Power
Broad Reach Power is the leading utility-scale battery storage platform in the United States. Based in Houston, Broad Reach is backed by leading energy transition investors, EnCap Investments L.P., Apollo Global Management, Yorktown Partners and Mercuria Energy. The company owns a 21 GW portfolio of utility-scale battery storage and renewable power projects across the U.S., giving utilities, generators, and customers access to technological insight and tools for managing merchant power risk so they can better match supply and demand. For more information about the company, visit www.broadreachpower.com.

Media Contacts

REsurety
Tara Bartley
[email protected]
(774) 232-1220

Broad Reach Power
Morgan Moritz
[email protected]
(512) 745-2575

Meta
Stacey Yip
[email protected]
(650) 407-0610

How Playing Whack-a-Mole With Dirty Power Can Help the World Reach Net Zero, as published by Bloomberg

Understanding the real-time mix of power sources in electricity grids could be a win-win for companies and the planet.

Authored by Eric Roston

Bloomberg reviews the challenges behind corporations meeting net-zero goals and REsurety’s efforts with the new Energy Storage Solutions Consortium is highlighted. Read more below.

Excerpt:

“Until now, power investments have been made largely with a focus on maximizing revenue and reliability. Now they need to help the world reach net zero, too.

Meta Platforms Inc., the power data and analytics company REsurety Inc., and Broad Reach Power, which owns and operates clean energy projects in the US, last week launched an Energy Storage Solutions Consortium. The group wants to set up a freely available and independently approved method to measure the planetary greenhouse gas savings associated with grid-scale energy storage. The goal is to make sure battery-stored renewable power is displacing fossil-generated electricity.”

Read the full article on Bloomberg’s website.

The Importance of Basis in Project Valuations: How Investors are Using REmap to Help

Wind Energy

Authored by Blair Allen, Director, Software Customer Success

In our Q2 2022 REmap report, we focused on node-to-hub basis: how deteriorating node-to-hub basis and the increase in use of basis-sharing clauses in PPAs were forcing companies to direct more attention to it as a risk, and that investors were chief among that group because of its impact on project health and ultimately project returns. This has prompted investors to search for new tools to better understand the basis risk faced by existing assets, and to carry that focus up the decision-making tree when new investment decisions are being made. Simply put, basis exposure not only impacts the valuation for cash and tax equity investors, but increasingly whether to walk away and forgo the time and cost of additional due diligence of a project. To help drive towards more efficient and realistic investment decisions, investors are turning to alternative data sources to supplement their traditional methods.

One way that REmap, REsurety’s SaaS-based market analytics product, supports more efficient and realistic project valuations is by saving investors time when accessing up-to-date historical basis performance for wind and solar projects. REmap shows hourly basis values for all operational wind and solar projects across the country. Investors use this data as a confidence check against forecasted basis values present in sponsor models, and to see how it aligns with historical performance at that proxy node as well as nearby nodes. Investors are turning to REmap for this information not only because it is easy to access and visualize with just a few clicks, but also because REmap’s hourly generation for all projects enables users to see the generation-weighted impact of basis – which is ultimately what matters most for project valuations.

Caddo County and neighboring wind projects

For example, an investor might be evaluating a portfolio of assets with a mix of operating and in-development projects. One project is an in-development wind farm in Caddo County, Oklahoma, and the engineering report included in the sponsor model designated a nearby operating wind project as the representative “proxy” node due to its geographical and electrical proximity to the new location. The sponsor model says the forecasted basis for the project is going to be $3 over the next few years then fall to $1 in the outer years. To confidence check this value, the investor can login to REmap and search for the county to identify the proxy node used in the consulting report, then quickly flip through the time series data for the proxy node to see how it performed recently, how prices have trended, and the project’s generation-weighted value. The same is then done for neighboring nodes/projects to see if the proxy node is an outlier or consistent with trends in the area. If performance at other nearby nodes differs, a note is made to discuss this difference with the sponsor or consultants to understand why any differences may exist. In this example, the investor finds that, historically, generation-weighted basis has ranged anywhere from $2 to -$12 on average for the proxy node and neighboring nodes, and recent data suggests a downward trend at several locations. The decision is made to use several different basis scalar values in the project model, based on historical performance at these different locations, so that the investor can evaluate how these different scenarios may impact expected profits and the likelihood of hitting a return threshold. After discussing with internal stakeholders, a decision will be made on how to price the overall investment given the risks inherent in this project, or to pass on the investment opportunity.

The historical, monthly-level generation-weighted basis for wind projects in, and neighboring, Caddo County. Projects display a range in month-to-month performance, and a mix of trends.

Investors know that markets are changing and history isn’t necessarily an indication of future performance, and that costly 3rd-party basis forecasts don’t get it right either. The utility of historical data is that it represents real-world performance and builds a foundation for evaluating the uncertainty in the future. Investors starting with a simple question – “how different is the forecast in the sponsor model from what’s happened in the past” – can use the answer to determine how much time to put into due diligence, or how much risk to price into the investment. REmap is helping investors make these decisions more efficiently with centralized, easy access to the historical and forecasted data they need.

For more information on REmap, or REview, which is helping investors evaluate the basis risk of their current portfolio, contact [email protected].

Learn more about REmap:
See what’s coming from REmap on the forecasting front
Learn how investment firm Hannon Armstrong is using REmap

Improving the Electrical Grid with Innovation and Partnerships, as published by Tech at Meta

Wind power

The electrical grid is transforming as older, less efficient fossil fuel generation plants are closing and more wind and solar farms are added to the system.

Authored by John DeAngelis, Energy Manager, Meta

AN EXCERPT: The electrical grid is transforming as older, less efficient fossil fuel generation plants are closing and more wind and solar farms are added to the system. These changes, however, can introduce additional complexity to the system that requires new tools to help the grid transition reliably. Additionally, companies are attempting to reach net-zero emissions by reducing carbon emissions from their operations, removing greenhouse gases from the air, and partnering with others on specific projects to directly reduce air emissions. Increasingly, energy storage is being deployed to help address these challenges and improve grid reliability.

The global energy storage market could hit one terawatt-hour by 2030, according to the latest forecast from research company BloombergNEF. Energy storage has been deployed in the United States mostly to help balance the electricity system when there are short-term fluctuations in supply and demand. However, these energy storage projects are currently incentivized to maximize revenue, which at times can inadvertently increase system emissions.

In 2022, Meta along with our partner Broad Reach Power, launched a pilot to test how energy storage could reduce carbon emissions while continuing to help preserve a reliable electrical grid. Meta is working with industry leaders to study how emerging technologies like energy storage can support grid reliability and reduce emissions as we continue to build some of the most efficient and innovative data center facilities in the world.

Read the full article on Tech at Meta.

White Paper: Making It Count

Updating Scope 2 accounting to drive the next phase of decarbonization

Authored by David Luke Oates, Senior Vice President of Power Markets Research, REsurety

Dr. Oates holds a Ph.D. in Engineering and Public Policy from Carnegie Mellon University and a Bachelor’s degree in Engineering Physics from Queen’s University, Canada.

EXCERPT: Corporations are increasingly focused on reducing their carbon footprints by decarbonizing the electric grid. While solar and wind energy development have rightly been a mainstay of these efforts, there is growing consensus that producing more clean energy alone isn’t enough. To maximize grid decarbonization, clean generation needs to occur at times and locations where its output displaces the highest-emitting resources. Consumption timing and location should be adjusted to minimize its carbon emissions via siting decisions, demand flexibility measures, and energy efficiency. And energy storage is needed to manage grid congestion and mismatches between clean supply and demand.

Effective carbon accounting frameworks can help coordinate these complex mitigation strategies by allocating emissions among the entities responsible for producing them. These accounting frameworks attempt to ensure that activities with more impact on actual emissions have more impact on carbon accounts. Given the large and increasing interest of investors, customers, regulators, and governments in corporate decarbonization initiatives, effective carbon accounting frameworks can encourage corporations to maximize their actual carbon reductions.

Fill out the form to access the full white paper.

"*" indicates required fields

Name*
This field is for validation purposes and should be left unchanged.

Q2 2022 REmap Report

REsurety creates the REmap-powered State of the Renewables Market report every quarter to provide readers with data-driven insight into the emerging trends and value of renewables in U.S. power markets. We combine our domain expertise in power markets, atmospheric science, and renewable offtake to analyze thousands of projects and locations and summarize key findings here. All of the data behind this analysis is available via our interactive software tool, REmap. Please fill out the form at the bottom of the page to access the full report, the Editor’s Note is below.

Blair Allen, director, software customer success, REsurety

Blair Allen
Director, Software Customer Success, REsurety

Editor’s Note:

Node to hub basis* is rapidly becoming one of the most prominent financial risks for renewable developers and clean energy buyers alike. Although not a new issue, it has recently become more visible for two reasons: first, it is getting much worse in many areas with a lot of renewables, and second, clean energy buyers are increasingly taking on basis-risk exposure through contractual terms in PPA agreements. While basis used to be a risk only borne by project developers and investors, now corporates are sensitive to it as well.

In Q2, a handful of renewable-rich regions saw generation-weighted (AsGen) basis worsen by double digit values relative to the 4 year Q2 average. In many cases this was most prominent in areas that were already no stranger to negative basis. In ERCOT South Hub, for example, the average AsGen basis for operating wind projects in Q2 over the last 4 years was -$11 – in 2022 it declined to -$34. In the NP15 region of CAISO, the average AsGen basis for operating solar projects dropped from -$9 over the last 4 years to -$27 in 2022. And in SPP South Hub, operating wind projects saw their 4 year average decline from -$9 to -$31 in 2022.

But hub-level average values only tell part of the story, since basis is inherently a project-specific concern and can vary considerably not only within hub boundaries but across projects only miles apart from each other. For instance, when considering the projects within SPP South Hub last quarter, REmap shows project-by-project AsGen basis values that varied from as low as -$48 to as high as $26. The same extreme divergence played out across different ISOs and hubs, driven by subregional constraints driving a wedge in value between locations on either side of congested areas.

Basis warrants so much attention because it is extremely volatile and has a large impact on investment returns. In addition, it is hard to solve: investment into transmission infrastructure takes years and is extremely expensive. Developers screen for viable greenfield locations to avoid it, investors pore over model results to price it, and now energy buyers are turning to their advisors or tools to understand it better as well. The basis risk sharing clauses increasingly present in PPAs link the developer and clean energy buyer to the project’s basis performance in ways the two groups weren’t before, and the mechanics of that linkage aren’t always well understood. Although its impact ultimately depends
on the counterparty and the project-specific contract details that can either worsen or improve exposure, one thing is clear: basis should be on everyone’s radar.

In this Q2 REmap report, we analyze a number of metrics including: shape, capacity factor, and AsGen value of power for renewables domestically. REmap users have real-time access to these metrics and more, including basis analysis, through the map-based SaaS offering.

*AsGen basis is defined in this report as the difference between a project’s AsGen nodal price ($/MWh) and its hub price ($/MWh), where the hub is assumed to encompass the area where the node is located.

Q2 2022 REmap Report Download

"*" indicates required fields

Name*
This field is for validation purposes and should be left unchanged.

Options for EIA to Publish CO2 Emissions Rates for Electricity, as published by Resources for the Future

The path toward decarbonization in the United States entails not only a mix of federal, state, and local government policies promoting clean energy, but also voluntary efforts by the private actors to reduce their CO2 emissions.

Authored by Karen Palmer, Brian Prest, Stuart Iler, and Seth Villanueva

Resources for the Future reviews use cases for emissions rate data and different options available to the Energy Information Agency for publishing data on both average and marginal emissions rates. Existing methods and data sources, such as REsurety’s Locational Marginal Emissions data, are discussed and evaluated. Read the executive summary excerpt below.

Excerpt:

Decarbonization efforts in the US consist of a mix of government policies to promote clean sources of energy and improve energy efficiency and voluntary actions by private actors to reduce their CO2 emissions. Understanding both the likely and actual benefits of both policies and private actions requires information about the carbon intensity of different sources of energy including electricity. Demand for data on the CO2 intensity of US electricity production and consumption is growing as governments and private companies seek to understand the emissions effects of both their electricity consumption and their clean energy investment choices. Emissions rate information is also important for Scope 2 emissions accounting under the GHG Protocol Corporate Standard1 that provides a way of tracking progress toward clean energy targets that many companies have declared.

The desire for transparent and consistent data on electricity emissions rates led the US Congress, in the Infrastructure Investment and Jobs Act (IIJA), to call for the US Energy Information Administration (EIA) to publish spatially and temporally granular electricity emissions rate data, beginning in late 2022. Specifically, the IIJA calls on EIA to report on hourly operating data, including “where available, the estimated marginal greenhouse gas emissions per megawatt hour of electricity generated” within each balancing authority and by pricing node. The law also calls on EIA to harmonize its electric system operating data with GHG and other relevant data collected by EPA or other federal agencies, as well as data collected by state or renewable energy credit registries. The resulting integrated data set should include net generation data and “where available, the average and marginal greenhouse gas emissions by megawatt hour of electricity generated within the boundaries of each balancing authority,” to be offered on a real-time basis through a publicly accessible application programming interface (API).

Read the full report on Resources for the Future’s website.

REsurety unveils renewable energy toolkit for portfolio management

Solar Wind Energy

Clean energy buyers and investors utilize the best-in-class SaaS to forecast, audit and explain the financial and environmental outcomes of clean energy projects and contracts

BOSTON, June 28, 2022 – REsurety, Inc., the leading analytics company empowering the clean energy economy, today announced a new SaaS analytics toolkit, REview. It’s the latest addition to the company’s software suite, which harnesses massive project performance and high resolution weather datasets to give clean energy buyers and investors a unique view into the financial and carbon emissions impact of the projects in their clean energy portfolios. 

The new toolkit extends REsurety’s existing market intelligence SaaS product capabilities by providing insight into customer-specific projects and specific contracts. REview customers can use the tool to analyze how their contracts are performing, what risks they hold, and how settlement is expected to occur over the coming months and years. The tool provides a breakdown of drivers of financial, operational, and carbon emissions performance, both at the hourly and aggregate level. 

Rich Santoroski, Chief Risk Officer and Co-head of Portfolio Management for Hannon Armstrong
Rich Santoroski

“We are pleased to incorporate REsurety’s dynamic new tool in service of our commitment to innovative client solutions,” said Rich Santoroski, Chief Risk Officer and Co-Head of Portfolio Management for Hannon Armstrong, and a Board member of REsurety. “Like their entire set of software applications, REview offers superior data with actionable insights to evaluate new renewable energy investments and monitor asset performance.”

REview delivers several unique benefits to customers: data speed and transparency, locational marginal emissions (LME) integration, and fundamentals-driven, scenario-based forecasting. REview provides high accuracy estimates of project and contract performance long before project data is typically provided; an independent and granular view of settlement and operational performance; and it’s the only tool on the market that measures both project-specific carbon emissions performance alongside project-specific financial performance. 

Lee Taylor, CEO of REsurety
Lee Taylor

“REsurety is excited to empower sustainability leaders with the insight and confidence they need to continue accelerating their investments in the clean energy-fueled future,” said REsurety CEO Lee Taylor. “Full visibility into project performance – both financial and environmental – and high confidence in the value and risk of future results is key for the long term success of this industry.”

For years, REsurety has used its proprietary data and analytics to accurately model the project output, carbon emissions impact, and financial value of clean energy generation. The new subscription service leverages these models and makes the insights they enable accessible to corporate buyers or investors through just a few clicks.

Screenshot of REsurety's new analytic tool, REview
REview helps customers understand settlement impacts potentially caused by a project’s operations by comparing modeled settlement to actual settlement.

Information about REview and its applications can be found here.

REview is currently in private launch with leaders in clean energy procurement, investment, and trading. General availability beyond the private launch is expected later this fall.

Companies may request an online demo of REview from an expert on the REsurety team by contacting [email protected]. Members of the news media may arrange for a demo by contacting Tara Bartley, [email protected]

About REsurety

REsurety is the leading analytics company empowering the clean energy economy. Operating at the intersection of weather, power markets, and financial modeling, we enable the industry’s decision-makers to thrive through best-in-class value and risk intelligence, and the tools to act on it. For more information, visit www.resurety.com or follow REsurety on LinkedIn


Disclaimer.

Decarbonizing the Datacenter, as published in the Wall Street Journal

Solar Energy

EXCERPT:

Solar Energy

Microsoft, which operates a global network of datacenters for its cloud services, has a long-term vision that by 2030, 100% of its electricity consumption, 100% of the time, will be generated from zero-carbon sources. This “100/100/0” commitment recognizes not only the critical obligations Microsoft has as a major consumer of electricity, but also the opportunities that come with it, says Brian Janous, general manager of energy and renewables at Microsoft.

Microsoft, which operates a global network of datacenters for its cloud services, has a long-term vision that by 2030, 100% of its electricity consumption, 100% of the time, will be generated from zero-carbon sources. This “100/100/0” commitment recognizes not only the critical obligations Microsoft has as a major consumer of electricity, but also the opportunities that come with it, says Brian Janous, general manager of energy and renewables at Microsoft.

In the U.S., Microsoft has partnered with clean energy analytics company REsurety to help develop tools capable of calculating emissions at each node along an electric grid. First piloted in Texas, these measurements of Locational Marginal Emissions (LMEs) help companies trying to decarbonize better understand the sources of the power they use on a granular level, then measure the impact of clean energy use and adjust power practices accordingly.

Read the full article in the Wall Street Journal.

Employee Spotlight on Sarah Sofia, Software Engineer and Solar Energy Expert

“I remember in high school, people were often surprised that I was interested in STEM and art, but I think they’re super connected and that a lot of engineering is creative.”

Software Engineer Sarah Sofia talks about her career

“I liked math and science but I also danced very seriously growing up, doing ballet, tap, and jazz. I remember in high school, people were often surprised that I was interested in STEM and art, but I think they’re super connected and that a lot of engineering is creative. Whether literally you’re building something or building a structure in your head for how to visualize a model, it’s all very connected to how you think about art and drawing or sculpting. 

“Increasingly it was very clear that physics and engineering was really what I loved to do. And my dad is very into science so he instilled an early interest in that for me. He has a small business that’s at our house and his team makes tools to test reliability, thermal conductivity, and thermal management of electrical components. As I get older, I have realized that being around a lot of circuit boards, working with my dad to build different things, and doing science experiments in the basement, made a lot of science and engineering feel more tractable as an adult. Like when I was little, I would go into the shop and make jewelry out of solder and ribbon cable and then as I got older I wanted to understand what they are and what they do. Participating in that and having someone lead me to see all of the possibilities from a young age was really valuable. I feel like that’s a big barrier for some because you can have so much separation from how things are made or work. So getting that growing up and being like ‘oh I know how to make something’ was special.

“I was very into physics and astronomy in undergrad, then my trajectory sort of slowly changed. After graduating, I wanted something with an impact on the world I was living in, in a more direct way. It felt like a pretty natural transition to engineering from physics and I found solar as a really cool application of physics. I liked being able to go all the way from the fundamental physics of what is happening on a micro level, all the way up to energy going into people’s houses. I was fortunate to work with industry in grad school. I wanted to maintain that and continue working in industry, where it really felt like I was directly connected with renewables getting installed now and less hyper focused on a very small portion of something that’s important in a solar cell. 

“As I have been in this world, I increasingly just think energy is super cool. I’m really interested to see, particularly as new technologies come more online, how they will change and shape the way our grid is evolving. I think getting to a higher and higher percentage of renewables and carbon free energy poses a lot of challenges, but they’re really exciting and interesting challenges. 

“My big hobbies at the moment are baking and quilting. I’ve always loved the transformative process of baking. As I’ve gotten into baking more complicated things and figured out how to optimize recipes and why certain things make certain things happen, I think it is really interesting. And then you get a treat at the end! Then during Covid, I took a remote quilting class through a fabric store in Cambridge. They did Zoom classes and sent materials. It’s slow, but very fun. Whenever there’s some progress that you see day to day it’s very satisfying.”

Learn about other REsurety employees

Currents Podcast: Recent Evolution of the Hedge Market

Currents podcast features discussions on project finance and recently interviewed REsurety's CEO Lee Taylor.

Listen in as Todd Alexander and Lee Taylor discuss the recent evolution of the hedge market due to the impacts of winter storm Uri. They get into the spectrum of hedging options before the storm, how each of those structures fared, how the hedging landscape has changed and more.

The Currents Podcast features in-depth discussions on the latest developments in project finance. The podcast is hosted by partner Norton Rose Fulbright’s Todd Alexander, who interviews key business leaders and policy makers to investigate important trends affecting the energy and infrastructure space.

Employee Spotlight on Jennifer Newman, VP of Atmospheric Science Research

Jennifer Newman

“I found anecdotally that a lot of meteorologists also play instruments.”

Jennifer Newman, Vice President, Atmospheric Science, REsurety, standing in front of a wind turbine.

“I grew up in the Boston area, and my dad was a sportswriter and my mom works in medical book publishing. So not really all that science-related. But I’ve always loved blizzards and snowstorms and thunderstorms. I still absolutely love snow. Growing up in New England, we definitely got a wide variety of weather. I was always fascinated by all of it and loved being out in it. 

“I have a younger brother who’s a software developer out in L.A. Sometimes we chat about agile development and things like that. We have this common vernacular now.

“Back then I took dance classes, I was in chorus, I played clarinet in the band, I acted. I was into the humanities, but I had this inclination for science and math. Everything appealed to me, so I went in as an undeclared major at Cornell University

“One draw for Cornell was its marching band. I did marching band throughout high school and all four years in college. I played the clarinet. We did every home and away game, and we also did a couple NFL games, and a Canadian Football League game. Rehearsals were three times a week. One of them was Tuesdays until 11 pm, which now I can’t imagine!

“Someone in the band was in the Meteorology Department, and he became known as the band meteorologist. I had never really found an outlet for all the math and physics, but once I saw, you can apply it to something that I really loved – the weather – that’s when things started to click. I found anecdotally that a lot of meteorologists also play instruments. 

Jennifer Newman, Vice President, Atmospheric Science, REsurety, with a weather balloon.

“I did an internship with the University of Rhode Island, sending up weather balloons with instruments to measure ozone. Then the summer after my junior year, I went to the University of Oklahoma and got into more severe weather research, and ended up going there for grad school too. 

“My thesis was on how to better detect tornadoes with current weather radar systems. I did a lot of storm-chasing down there. It took me a couple of years of going out driving around dirt roads in Kansas, but I did eventually get to bag a couple of tornadoes. You end up running into all kinds of people, like a crowd of people on a dirt road in Kansas or Oklahoma. Now that I own a house, I have to say I don’t think I’d be thrilled if there was a tornado coming through or hail, knowing I would have to pay to replace my roof. I think I’m good with an occasional minor thunderstorm.

“While taking a renewable energy class during the last semester of my Master’s program, I realized I really loved learning about wind energy and the meteorology applications. That’s when I decided to stay for a PhD so that I could learn more. During my PhD, I got to set up meteorological instruments at some operational wind farms and analyze the data, which gave me a great understanding of how important accurate measurements are for wind energy. After finishing my PhD, I did a postdoc with the National Renewable Energy Laboratory in Boulder, Colorado.

“I’ve always thought I liked working in industry more than academia, and I wanted to move back to the Boston area, because my family is still here. I started reaching out to my network, and was connected with REsurety. It was a smaller company then, about 10 or 11 employees, and they were looking to hire some kind of research scientist, so my skill set matched really nicely. 

“I was able to look in-depth into the challenges we were facing and improvements we wanted to make with our generation modeling. What I bring is figuring out what we’re doing well, where we can improve, and working with the engineering team to make those changes to our wind and solar models.

“Math and physics tend to be male-dominated fields. Having two female co-advisors in graduate school was very impactful in my life. Seeing that they had to work hard to be heard always inspired me to speak up and be confident. There was only one other female when I got here, and so I started Women of REsurety. I want the females here to have a connection to other women working at the company.

“I had a daughter five months ago, so my hobby right now is child rearing!”

Jen’s full bio.

Learn about other REsurety employees.

Carbon Accounting with the Greenhouse Gas Protocols: Successes and Emerging Challenges

David Luke Oates
David Luke Oates is a carbon accounting subject matter expert.
David Luke Oates

By David Luke Oates, SVP of Power Markets Research, REsurety

The Greenhouse Gas Protocol is a foundational component of modern climate standards. It is incorporated into the Task Force on Climate-Related Financial Disclosures’ (TCFD) guidelines for voluntary climate disclosures1, as well as the Science-Based Targets Initiative’s (SBTi’s) recommendations for aligning corporate targets with climate goals.2 It has also largely been paralleled in the U.S. Security and Exchange Commission’s recent proposed rule on climate disclosures.3

The GHG Protocol has achieved considerable success in providing a common framework for voluntary disclosures. But it is now a fairly outdated standard, and its flaws are becoming more impactful and problematic. The GHG Protocol Corporate Standard was originally released in the early 2000s, with updated Scope 2 guidance released in 2015. The nearly seven years since that release have featured dramatic increases in corporate clean energy purchases and interest in accurate corporate climate disclosures.4 There is now growing interest in updating the GHG Protocol and addressing some of its shortcomings.

At REsurety, we spend much of our time helping buyers and sellers of clean electricity to manage their financial risks and achieve their decarbonization goals. We are particularly interested in ensuring that Scope 2 accounting is as effective as possible. Today, the GHG Protocol Scope 2 Guidance has two major flaws: 1) it does not ensure that all actual carbon emissions are accounted for across entities and 2) it often doesn’t create the right incentives for entities interested in decarbonization. 

On the first item, the GHG Protocol’s Market-Based method for Scope 2 accounting allows reporting entities to apply REC purchases to cover their consumption at an emissions rate of 0 tons/MWh. It also allows entities to account for their grid consumption by applying a simple-average emissions rate. This average emissions rate reflects the same clean energy claimed through REC retirements, effectively double-counting the impact of clean energy and contributing to under-reporting of emissions.5 While this double-counting may have been of little concern a decade ago, the volume of today’s clean energy purchases make it a more serious problem.

On the second item, by relying on average emissions rates with low temporal and spatial granularity, current Scope 2 guidance risks send the wrong signals to entities interested in decarbonization. Consider an entity purchasing solar energy that mostly displaces coal generation, in a grid that also includes considerable baseload nuclear. Since the average emissions rate of this grid is much lower than the emissions rate of the displaced coal, the reduction in the entity’s carbon footprint would not reflect the solar energy’s full carbon impact. In general, the activities achieving the greatest amount of decarbonization are not fully rewarded under the current GHG Protocol, creating a misalignment of incentives. We think there is an opportunity to fix both of these problems.

Governments and corporate entities have recently made ambitious climate mitigation commitments. Truly delivering on these commitments will require a modernized set of carbon accounting rules to align incentives and avoid double-counting. We believe that a revised Scope 2 carbon accounting framework based on granular marginal emissions data can help address some of the shortcomings we mentioned above. We look forward to sharing more details on potential solutions to these challenges in the months to come.

In the interim, we love talking with anyone who shares our goals of more accurate carbon impact measurement and the tools to maximize that impact – so please contact us at [email protected] if you have any questions or want to connect and discuss.

_______________________________________________________________________________________

Footnotes:

[1] See p. 21, Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures, October 2021

[2] See p.3, SBTi Criteria and Recommendations, Version 5.0, October 2021

[3] See §I.D.2. (p. 40), The Enhancement and Standardization of Climate-Related Disclosures for Investors, SEC Proposed Rule, File No. S7-10-22

[4] U.S. corporate clean energy purchases grew from 1.2 GW/year in 2014 to over 11 GW/year in 2021. See Clean Energy Buyers Association Deal Tracker

[5] While this double-counting could theoretically be corrected by applying the residual mix emissions rate to all parties’ grid consumption, this approach is not feasible in many jurisdictions. Calculating the residual mix emissions rate depends on visibility into all private contracts for RECs between counterparties, something that individual reporting entities aren’t able to provide. In jurisdictions (such as the U.S.) where residual mix emissions rates are not available, current GHG Protocol guidance is to apply the average emissions rate to grid purchases. See GHG Protocol Scope 2 Guidance §6.11.4


Disclaimer.

Media Advisory: Prolonged periods of negative pricing in Q1 set new record

Blair Allen

REsurety’s REmap Q1 State of the Renewables Market report presents generation-weighted value, shape value, and capacity factor for major U.S. hubs

BOSTON, MAY 10, 2022 – The U.S. power grid saw record lows in the first quarter of 2022, REsurety’s REmap Q1 2022 State of the Renewables Market Report finds, with prolonged negative pricing in Texas expected to ease this summer.

Unlike the soaring prices of last year during the Texas energy crisis of February 2021, this year the ERCOT power grid saw record lows in Q1. It was another turn in a developing plotline REsurety commented on last quarter. 

One example: In February 2021, ERCOT West Hub (among others) settled at the market price cap of $9,000/MWh for three days; in February 2022 ERCOT West Hub saw a two day period where prices never rose above $0/MWh. Mild demand coupled with sustained periods of high wind and solar generation created the conditions for this negative pricing event, though these conditions weren’t isolated to only those few days. In fact, by the end of the quarter, West Hub more than doubled the number of negative-priced hours than were seen in Q1 the year prior.

REsurety creates the REmap-powered State of the Renewables Market report every quarter to provide readers with data-driven insight into the value and latest emerging trends of renewables in U.S. markets. The team uses its knowledge in power markets, atmospheric science, and renewable offtake to analyze thousands of locations, and summarize a few key findings, using the data that is available via its interactive software tool, REmap.

Key components in the report to be used to analyze trends in a given ISO, sub-regions of an ISO, or hub, are:

  • The generation weighted value, or the realized value of the wind and solar projects 
  • The shape value, or the relationship between the generation value and the simple-average market price
  • The net capacity factor for operating wind and solar projects 
Blair Allen, Director, Software Customer Success, REsurety
Blair Allen

“Using the modeled energy in REmap, which tells us how projects could have performed based on underlying wind/solar resource availability, last quarter West Texas solar projects saw anywhere from 20 to 30% of their potential hourly production for a given month happen in negatively priced hours. However, in reality, these projects weren’t operating at their potential capacity in these intervals, and either shut down or significantly ramped down production,” reports Blair Allen, Director, Software Customer Success, REsurety. 

Over the next quarter as the weather starts to transition to summer conditions negative pricing is expected to decline. With an increase and shift in demand, Q2 will likely be a transitional period, with the frequency of negative pricing hours remaining high to start before subsiding more materially by the end of the summer in mid Q3. 

The power of REmap lies in the historical and predictive modeling for renewable energy projects across the United States, as well as the ability to analyze hypothetical installations. Learn more by reading the Q1 report

About REsurety

REsurety is the leading analytics company empowering the clean energy economy. Operating at the intersection of weather, power markets, and financial modeling, we enable the industry’s decision-makers to thrive through best-in-class value and risk intelligence, and the tools to act on it. For more information, visit www.resurety.com or follow REsurety on LinkedIn

Contact:  Allison Lenthall, [email protected], +1-202-322-8285


Disclaimer.

Q1 2022 REmap Report

REsurety creates the REmap-powered State of the Renewables Market report every quarter to provide readers with data-driven insight into the emerging trends and value of renewables in U.S. power markets. We combine our domain expertise in power markets, atmospheric science, and renewable offtake to analyze thousands of projects and locations and summarize key findings here. All of the data behind this analysis is available via our interactive software tool, REmap. Please fill out the form to access the full report, the Editor’s Note is below.

Q1 2022 State of the Renewables Market Report

"*" indicates required fields

Name*
This field is for validation purposes and should be left unchanged.

Blair Allen, director, software customer success, REsurety

Blair Allen
Director, Software Customer Success, REsurety

Editor’s Note: As the first quarter of 2022 concludes, we reflect on historic highs and historic lows. Another record in ERCOT marks the quarter’s passing, just as one did a year ago following the market events of February 2021. However, unlike the soaring prices of last year, this record involves a prolonged period of negative pricing, and another turn in a developing plotline we commented on last quarter. Please fill out the form below to access the report.

Consider this comparison: in February 2021 ERCOT West Hub (along with others) settled at the market price cap of $9,000/MWh for three days; in February 2022 ERCOT West Hub saw a two day period where prices never rose above $0/MWh. Mild demand coupled with sustained periods of high wind and solar generation created the conditions for this negative pricing event, though these conditions weren’t isolated to only those few days. In fact, by the end of the quarter, West Hub would more than double the number of negative-priced hours than were seen in Q1 the year prior.

One impact of this increasing frequency in negative pricing is rising levels of curtailment, particularly among solar projects which, unlike wind, don’t benefit from the production tax credit and are less likely to operate below $0/MWh. For example, using the modeled energy in REmap, which tells us how projects could have performed based on underlying wind/solar resource availability, last quarter West Texas solar projects saw anywhere from 20 to 30% of their potential hourly production for a given month fall in negatively priced hours. However, in reality these projects weren’t operating at their potential capacity in these intervals, and either shut down or significantly ramped down production.

Another important angle to consider: whereas for the last few years hourly negative prices at West Hub were evenly split between on-peak and off-peak hours during this time of year, this year saw that balance shift to 60/40 in favor of on-peak hours. The cause for this shift is clear: increasing amounts of solar capacity means that low pricing is no longer just following the production profiles for wind, and is coinciding more regularly with the rise and fall of solar energy.

Looking ahead, as seasons change into summer conditions so too do we expect a change in the volume of negative pricing. An increase and shift in demand– which will steadily move more towards the mid afternoon as air conditioning ramps–and a decline in wind production at the same time should converge to steadily mitigate on-peak negative price frequency. Q2 will likely be a transitional period, with frequency of negative pricing hours remaining high to start before subsiding more materially by the end of the quarter.

Friends don’t let friends use 8760s

says Jennifer Newman, VP of Atmospheric Science Research, REsurety

As featured in POWER Magazine

Any company embarking on a new project must do its research to ensure that it calculates the proceeds based on the right financial information. With so much data now readily available, it’s more important than ever to use the right data, and make accurate calculations. 

REsurety's Jennifer Newman, VP of atmospheric science research, talks about 8760s.

Amid the boom in demand for renewable power plants, that is not always happening when backers go to measure the value of the energy they will generate. Here’s why, according to Jennifer Newman, Vice President of Atmospheric Science Research at REsurety, the Boston-based renewable industry data and analytics company. 

Q: What is an 8760 and how is it used in the renewable energy industry?

A:  An 8760 (sometimes referred to as a typical meteorological year or TMY) consists of hourly generation values for a wind or solar project for all 8,760 hours of a typical year. Importantly, 8760s are almost always used to represent average generation for a renewable energy project in a given hour. 

Q:  And what’s the problem? Why shouldn’t 8760s be used to estimate the value of power generation being produced by renewable energy projects? 

A:  An 8760 isn’t bad on its own – it’s a perfectly acceptable way of representing average generation. The issue is when a generation 8760 is paired with hourly power prices to produce either a revenue backcast (an estimate of the revenue a project would have made given historical prices) or a revenue forecast (an estimate of how much revenue a project could earn in the future). 

The problem with a backcast is that hourly renewable generation influences power prices during each hour. And that’s because wind and solar tend to be very inexpensive sources of electricity. So an hour where there’s a lot of wind or solar on the grid will tend to be associated with lower power prices, particularly in markets with high renewable penetration. When you use an 8760 instead of actual generation values during each timestamp, you aren’t able to capture that impact of hourly generation on hourly power prices.

And when analysts are using a model to predict future power prices, it’s a mistake to assume that conditions in the future will be similar to  an “average weather year”. Abnormal weather conditions can cause drastic price changes, as we all saw in Texas during February 2021.

Q: So what should be used to accurately calculate the value of renewable power generation?

A: There’s an abundance of rich datasets we can use to inform our decisions on whole new levels. For a backcast analysis, we should be using concurrent generation and price time series data to make these calculations and avoid errors (i.e. the generation volume that is used for 7:00 am on January 13th, 2019 should reflect the same weather conditions that generated the price that was observed in that same hour). In a forward-looking scenario, you should use a variety of different potential weather conditions beyond just an average year. Would you want to use a typical Texas February to project possible gains and losses, now that you know that Texas in February of 2021 is possible?  

Q: Where does a company turn then, to ensure it’s using the right information?

A:  At REsurety we offer the REmap tool, which models hourly generation for every wind and solar project in the United States, and will soon look forward at hypothetical situations to allow for future planning. REmap also offers data for synthetic situations – what-if planning for potential future sites – including historical modeled generation, observed power prices, and the combination of generation and power prices to estimate revenue. 

Getting beyond 8760s can not only steer a company to site a new renewable project in one location versus another, it can also provide guidance on the financial risk associated with a range of potential weather conditions.

Learn more, download the white paper.

Disclaimer.