Tag: REsurety

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:
Senior Representative, 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.

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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

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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.”

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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

Employee Spotlight on Jocelyn Kleiger, Software Engineer

“With the work that I do, it’s a means to an end for something that’s much greater than myself and will constantly be moving in a positive direction.”

“I’m from Long Island, around the North Shore area. My sister and my dad would say that I was a cute kid, and my brother would say that I was headstrong and went against the system. Then kids I actually went to school with thought I was weird. So it really depends on who you ask. 

“I was a total literature and humanities nerd in high school, and I didn’t really get into STEM too much until my junior year. I was part of the literature magazine and the school newspaper, and I did advanced photography in high school. When I was a senior, I took AP Physics and it wasn’t until I took that class that I ended up joining robotics and getting more into engineering. Then I went to a marine engineering college because I grew up near the ocean and really liked offshore wind energy at the time. They were just starting to talk about the Block Island wind project when I was a senior in high school, so that’s kind of why my career went the way that it did.

“Software engineering was actually pretty far down the list of things on my mind. No one ever really thought I’d be an engineer. I was supposed to be a lawyer. I had an aversion to software in general, especially because the only formal coding experience I had was one C++ class when I was an undergrad. It was me and five other kids and they all knew a coding language beforehand, so the class went very fast. It was humbling, to say the least. I’m still in touch with everyone from that class, and I reached out to them when I got the job at REsurety saying ‘Hey, guess who’s a software engineer now?’ 

“I’m a little bit of a hippie. I’m Jewish, and one of the tenets of Judaism is tikkun olam, which means ‘world repairs’, so I wanted that in whatever career I picked. So I decided to go into a career that would address climate change because that’s what had the most effect on the greatest number of people.

“The first work that I did in clean energy was for a wave energy converter firm who was working on making their device cost competitive with the grid in Australia. You can’t depend on politics or goodwill to bring about the clean energy transition, because a) it won’t happen fast enough and b) that’s very easily reversible and subject to human whims. But if you can make it cost competitive, then you’re fair game. So I started doing some research on least cost grid optimization for decarbonization, using primarily Python and data science techniques. I wasn’t really doing much software then but that’s what got me interested in the economic side of it. When I found out about REsurety, I thought that it was a perfect fit for me, and the more I talked to people at REsurety it seemed like a really great culture. I really feel like I’m simultaneously challenged and supported.

“What excites me about the energy industry now is that there’s much less existential dread in it than there used to be. The reason why I went into clean energy instead of climate change research was because I don’t have it in me to constantly read about the climate crisis and have that be my entire life, because that just sounds like an anxiety attack waiting to happen. With the work that I do, it’s a means to an end for something that’s much greater than myself and will constantly be moving in a positive direction.

“I like to read, and I’m in a book club. I cook a decent amount and I’ve been getting a little bit more experimental now that I actually have free time. I was a vegan for a while, and then I was vegetarian. I usually cook a lot of stews, because they’re just very cozy and it’s also very hard to mess them up. When I’m feeling jazzy I’ll make something with a little more effort like baklava or spanakopita.

“I hike and climb when I can. I went climbing yesterday. I’m not good at it, and I like to use the fact that I’m under five feet tall as an excuse for that. I also like to hang out with my dog. Hopefully next year, he’ll be in mountain shape so I won’t have to leave him at home.”

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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.

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.

Employee Spotlight on Morgan O’Connell, Revenue Operations Associate

“I love music and food, which relates to my love of cooking. But then when I’m able to grab some time for painting, that’s a different kind of vibe.”

“I grew up around Boston on the South Shore. I would say as a kid, I loved learning and meeting new people. I was kind of an outgoing nerd. I’m a painter, so I would have my time to paint, but then I always wanted to learn something new at school and be a part of different clubs and groups. 

“I went to Lafayette College down in Pennsylvania, and I was an art and environmental studies double major there. Honestly, energy and renewables wasn’t something I had on my mind until college. I took an environmental geology class and the professor was inspiring and brilliant. I could tell that she believed in her students’ ability to make an impact. So that environmental geology class was the reason I switched to an environmental studies major.

“I got to do a thesis that combined art and environmental studies, which was the first of its kind. I did a lot of research into plastic pollution in local water systems and how it affects the environment and everything downstream. Then I wrote a paper and created artwork based on the learnings from my research. 

“I used to work at a large energy management company, and REsurety is exactly what I was looking for in the sense of pivoting completely to renewable energy. Also, working at a smaller company allows you to make a bigger impact and collaborate in ways that are not possible at a large company, and I’ve been enjoying that. I feel like everybody is more willing to adapt as well. Everyone is very interested in market changes and new legislation that affects our business and it should be talked about and worked through.

“REsurety is such a collaborative company. You might be in your silo at times, but the second you step out for happy hour or a bagel morning, that is when the magic happens. The conversations are really enlightening and I’m learning a lot.

“I’m most interested in energy storage as a technology and seeing how it advances. We saw that through solar and how big investments in solar can drive down prices and storage is now not attainable for most companies price-wise. So I think I’m most excited to see where storage goes. 

“When I’m not working, I’m probably hanging out with friends. I love music and food, which relates to my love of cooking. But then when I’m able to grab some time for painting, that’s a different kind of vibe.

“Also, I just joined the Young Professionals Board for a nonprofit called Friends of the Children, which is a different community outside of energy and art. They provide one-on-one mentorship to kids throughout their entire childhood who might not otherwise have that support or access to resources. 

“It’s related to the same kind of thing I did in college. For all four years I ran a volunteer program that was cooking for 30 women and children at a non-emergency shelter. That was on a weekly basis and when we made the food we got to hang out and eat with the residents. I learned a lot from women who have been through so many systemic obstacles and I felt like I’ve been in my own little bubble here in Boston, so it’s been good to be a part of a new community.”

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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

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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.

Employee Spotlight on Nikhil Ramakrishnan, Marketing Specialist

“Where I grew up in India was a huge inspiration to me and shaped who I am today. So being able to incorporate parts of that in my music and my creative process is rewarding.”

Nikhil Ramakrishnan, marketing specialist at REsurety

“I grew up all over the place. I was born in Pennsylvania, but I only lived there for two or three years before moving to New York. Then we moved to Singapore for a year. Then back to New York and eventually we moved to New Delhi, where I did middle school and high school. It was definitely a lot of different cultures and a little bit of culture shock here and there. 

“When I first moved to India, I didn’t grasp how cool the experience was. I had to learn the language from scratch. I had to start at a preschool level because I didn’t know anything. After two or three years, I became fluent in Hindi though, which was pretty impressive, I didn’t think I’d be able to do that.

“For a long time, I really had no idea what I wanted to do. When I was in high school, I took a couple of broad business classes that gave a feel for each field within business. Afterwards, I decided that business would be the best fit. And within those classes, I was pretty good at marketing. I also enjoyed the marketing side the most. 

“I always knew that I wanted to come back to the U.S. for college. I had done 10 years in India, it was time for a change. I went into college as a marketing major. After taking a few classes, I knew that that was what I wanted to pursue.

“I like the connecting with people aspect, because you really have to understand what a person is thinking or what a person is looking for. That human touch in marketing is something that you don’t often find in other parts of business. And there’s so many different ways of targeting people and reaching people. People think and behave in so many different ways. There’s not just one blanket method of targeting or hitting on somebody’s interest. 

“I also really enjoy music. I make music in my free time. It’s mostly hip hop and rap tracks. It’s cool to see how my music has evolved. It started out as just a hobby with my college roommate and it’s now grown to where we’re putting on local shows, meeting new artists from the area, and growing our network in the music space as well. 

“Living in India definitely shaped my taste in music. I actually wrote a whole song about the city that I used to live in. Where I grew up in India was a huge inspiration to me and shaped who I am today. So being able to incorporate parts of that in my music and my creative process is rewarding.

“I just graduated from Northeastern University about two and a half months ago. The clean energy field was always something that I was around growing up, because my dad worked in energy companies. It was never a situation where I was forcing myself to pursue energy. It was just if an opportunity to work in energy came up, I’d definitely consider it. It just so happened to work out that way with REsurety. 

“I’m looking forward to growing and developing more as a marketer in this new role. It already feels like the work I’m doing is very meaningful and making an impact on the organization. I’m also excited for the amount of growth potential that the energy field has to offer. I think the future is looking really bright for it and I’m excited to be a part of it.”

Join our team

Clean Integration Podcast: Managing Intermittent Power Risks

Clean Integration Podcast by Soluna

Listen in as John Belizaire, CEO at Soluna Computing and Lee Taylor, CEO at REsurety discuss the challenge of intermittency in the renewable energy market. The podcast covers REsurety’s impact on the clean energy economy through their innovative tools like Locational Marginal Emissions (LMEs) and hedging strategies.

The Clean Integration Podcast features experts in the renewable energy industry discussing the path to making renewables the primary, most affordable energy source. The podcast is sponsored by Soluna, a utility-scale developer that combines renewable energy power plants with high-performance computing facilities.

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.

The Enhancement and Standardization of Climate-Related Disclosures for Investors

Wind Energy

REsurety’s letter to the Securities and Exchange Commission Re: File No. S7-10-22, dated June 17, 2022

AN EXCERPT:

On behalf of REsurety, Inc., a leading analytics provider in the clean energy economy, we are writing in support of File No. S7-10-22: The Enhancement and Standardization of Climate-Related Disclosures for Investors. We also suggest two specific language refinements to improve the accuracy and transparency of Scope 2 emissions disclosures.

Anticipated Value of the Proposed Rule

For the last 10 years, REsurety has helped our clients understand the risks and value of buying and selling electricity from clean energy projects. Many of our clients develop renewable energy projects, have made voluntary public GHG reduction commitments, or own assets exposed to climate-related risk. The SEC’s proposal to require detailed climate-related disclosures has the potential to benefit our customers, as well as the public and the planet. By requiring disclosures from a large category of companies, the proposal protects investors from unintentional exposure to climate-related risk. By standardizing disclosure requirements and requiring attestation, the proposal can also help substantiate GHG reduction claims. In short, the proposed rule has the potential to increase efficiencies in capital markets, boost investor confidence and encourage companies to take effective climate action at scale.

Challenges with the GHG Protocol

While we strongly applaud the SEC’s aims, we are concerned about the pivotal role the GHG Protocol plays in the SEC’s proposal, particularly with respect to Scope 2 emissions disclosures. The proposed GHG emissions disclosure requirements are based “primarily on the GHG Protocol’s concept of scopes and related methodology”.1 The proposed rule cites the GHG Protocol Scope 2 Guidance as a methodological source for determining Scope 2 inventories.2

The GHG Protocol Scope 2 Guidance allows reporting entities to select from an extensive hierarchy of emissions factor data to calculate their footprints. Application of some of these emissions factors would result in footprints that differ materially from actual GHG emissions. For example, the current Scope 2 Guidance lists Renewable Energy Credits (RECs) as the highest-quality “emissions factor” data type but takes no position on where or when RECs are produced relative to their consumption. An entity consuming power in a coal-heavy grid could eliminate its Market-Based Scope 2 footprint by purchasing sufficient RECs from a very clean grid, even when such a purchase would have a negligible effect on actual GHG emissions.

By relying on average emissions factors, current Scope 2 guidance also risks sending signals to registrants that are at odds with the goal of reducing carbon emissions. Consider a registrant 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 registrant’s carbon footprint would not reflect the solar energy’s full carbon impact. As a result, the registrant may hesitate to contract for the solar energy in the first place, knowing that its actual carbon benefits could not be reported.

Read our full letter.

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] Proposed Rule, §I.D.2.

[2] Proposed Rule, §II.G.2.c (p. 195). The proposed rule also cites the EPA’s guidance on Indirect Emissions from Purchased Electricity, which is highly similar to the GHG Protocol Scope 2 guidance. See §II.G.1.b. (p. 160)


Disclaimer.

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.”

Join our team

June 2022 Project Finance NewsWire

How Hedges Have Changed Since Uri, Lee Taylor, REsurety CEO

Project Finance NewsWire spotlights developments affecting project finance and the energy sector; you can find Lee Taylor’s feature on page 15.

AN EXCERPT:

Cover page of the June 2022 Project Finance NewsWire report.
A publication from Norton Rose Fulbright

The hedge market is offering the same menu of options a year and a half after a sudden cold snap in Texas left some power projects facing huge losses.

However, more attention is being paid to how to cap exposure in extreme scenarios.

Winter Storm Uri was an extreme cold event in late February 2021, centered in Texas but also affecting neighboring states, that was a one-in-10-year or one-in-50-year event, depending on which meteorologist you ask. It was not off the charts, but it involved an extreme level of sustained cold. There were deaths and significant property damage in Texas.

The storm led to a spike in electricity demand, especially for heating, and a shortfall in supply.

The shortfall in supply was driven by a number of factors, but the main driver was power plants froze physically and transmission infrastructure was shut down. These factors affected all types of power plants. The most pronounced effect was on gas-fired generation, but renewables, and wind in particular, were affected as well.

There was a pronounced financial impact in ERCOT because of the mechanism within ERCOT to reward generation during spikes in demand. There are administrative adders to the spot electricity price that force the price of power to go to a cap, incentivizing supply when demand spikes. At the time, the cap was $9,000 a megawatt hour. The result was that a spot market in which the price for electricity is often in the $20 to $40 range per MWh, was suddenly pricing power at $9,000 a MWh for three days.

Continue reading by downloading the PDF.

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.

Join our team

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

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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.

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