Report by Brattle Economists Reveals Significant Variations in Resource Adequacy Requirements Among North American Power Markets - KTEN.com - No One Gets You Closer

Report by Brattle Economists Reveals Significant Variations in Resource Adequacy Requirements Among North American Power Markets

  • Texoma HeadlinesMore>>

  • Man Arrested After Stolen Pickup Truck Crashes In Denison

    Man Arrested After Stolen Pickup Truck Crashes In Denison

    DENISON, TX -- A Durant man is behind bars after police say he stole a pickup and slammed it into a fence. Police say Jimmy Crow, 46, hot-wired the truck in Denison before crashing into a utility pole. It all started about 4 a.m. The resident says he saw a thief by his friend's "for sale" pickup that was parked in his yard in the 2200 block of West Morton Street for better visibility.Police say Crow made it across the street, almost hitting a patrol car, before hitting a fence in the 2000 blo...More >>
    DENISON, TX -- A Durant man is behind bars after police say he stole a pickup and slammed it into a fence. Police say Jimmy Crow, 46, hot-wired the truck in Denison before crashing into a utility pole. It all started about 4 a.m. The resident says he saw a thief by his friend's "for sale" pickup that was parked in his yard in the 2200 block of West Morton Street for better visibility.Police say Crow made it across the street, almost hitting a patrol car, before hitting a fence in the 2000 blo...More >>
  • Shop Local For Mother's Day And Win Prizes From Downtown Durant

    Shop Local For Mother's Day And Win Prizes From Downtown Durant

    Mother's Day is just a few weeks away. If you're looking for a unique gift idea, you might shop local with Downtown Durant. If you do, you could get tickets to be registered for a few prizes and gifts of your own.For more information contact Durant Main Street at http://www.durantmainstreet.org/ Durant Main Street 110 North 2nd Ave Durant, OK 74701 580-924-1550 : Work 580-924-1615 : FaxMore >>
    Mother's Day is just a few weeks away. If you're looking for a unique gift idea, you might shop local with Downtown Durant. If you do, you could get tickets to be registered for a few prizes and gifts of your own.For more information contact Durant Main Street at http://www.durantmainstreet.org/ Durant Main Street 110 North 2nd Ave Durant, OK 74701 580-924-1550 : Work 580-924-1615 : FaxMore >>
  • Sherman Hosts Earth Day Celebration Saturday April 26, 2014

    Sherman Hosts Earth Day Celebration Saturday April 26, 2014

    Texomaland comes together Saturday, April 26, 2014 from 8:30 a.m.-5:00 p.m., to celebrate the environment and efforts to preserve it at Earth Day Texoma 2014, a day-long, family-friendly event at Sherman Municipal Grounds, 405 N. Rusk in Sherman. The free festival has grown in popularity and attendance each year since it began six years ago with the goal of helping ordinary people learn practical ways to improve the health of the planet, their children and themselves. Last week, EDT’s organiz...More >>
    Texomaland comes together Saturday, April 26, 2014 from 8:30 a.m.-5:00 p.m., to celebrate the environment and efforts to preserve it at Earth Day Texoma 2014, a day-long, family-friendly event at Sherman Municipal Grounds, 405 N. Rusk in Sherman. The free festival has grown in popularity and attendance each year since it began six years ago with the goal of helping ordinary people learn practical ways to improve the health of the planet, their children and themselves. Last week, EDT’s organiz...More >>

Information contained on this page is provided by an independent third-party content provider. WorldNow and this Station make no warranties or representations in connection therewith. If you have any questions or comments about this page please contact pressreleases@worldnow.com.

SOURCE The Brattle Group

CAMBRIDGE, Mass., Feb. 11, 2014 /PRNewswire/ -- Economists at The Brattle Group have prepared a report for the Federal Energy Regulatory Commission (FERC) that assesses the economic and reliability implications of different resource adequacy standards. Released by the FERC Sunday at the FERC-NARUC Collaborative, the report finds that the common one-day-in-ten-years ("1-in-10") resource adequacy standard varies greatly in how it is applied across North America.  The Brattle report surveys resource adequacy standards and finds that differences in definitions and accounting practices translate into a more than five percentage point difference in reserve margins.  

"These differences make it challenging to meaningfully compare reported reserve margins across regions," noted Johannes Pfeifenberger, a Brattle Principal and co-author of the study. "These variations also mean that a wide range of different reliability standards have been accepted by the industry and from a policy perspective-perhaps without a clear realization that these differences exist."

The study also examines the economic implications of the 1-in-10 resource adequacy standard compared to those of alternative reliability targets.  Using the Strategic Energy and Risk Valuation Model (SERVM) by Astrape Consulting, the authors conducted probabilistic simulations of hourly generation availability, load profiles, load uncertainty, transmission availability, and other factors to estimate economic and reliability metrics. Based on these simulations, the study finds that:

  • The "economically optimal" reserve margin tends to be significantly below the planning reserve margins yielded by the traditional 1-in-10 resource adequacy standard unless regulators incorporate risk mitigation benefits into their decision making.
  • Energy-only market designs, in particular those with price caps and an absence of scarcity pricing mechanisms, will not generally yield reserve margins as high as those based on the 1-in-10 standard desired by system operators and policy makers.
  • A capacity market could be designed to achieve economically-optimal reserve margins through either: a) imposing economically-based, rather than physical reliability-based, planning reserve margin requirements, or b) implementing a demand curve for capacity that is designed to procure the cost-minimizing quantity of capacity.
  • Increasing demand response penetration will result in higher average energy prices and higher frequency of scarcity pricing, with increased market efficiency but lower capacity prices.
  • Total costs are very similar over a wide range of planning reserve margins, which means the choice of an energy-only or energy-plus-capacity market design does not by itself have great implications for average supplier net revenues or average consumer costs.
  • Planning reserve margins higher than economically optimal will slightly increase costs but significantly reduce price volatility and customer cost uncertainty.

Although the study finds significant variation in how reserve margins are set within the industry, the apparent acceptability of these differences can provide a valuable opportunity for increased flexibility.  "A more explicit recognition of the significant variances in setting reserve margins that have in fact been acceptable from a policy perspective can provide an opening for more flexibility in setting resource adequacy targets. This flexibility will be increasingly necessary as the industry and its regulators consider resource adequacy in light of a host of new challenges, such as gas-electric interdependencies, increased penetration of intermittent resources and demand response, flexibility needs, and capacity market design," Pfeifenberger added.

The report, "Resource Adequacy Requirements: Reliability and Economic Implications," was authored by Mr. Pfeifenberger, Brattle Senior Associate Kathleen Spees, and Kevin Carden and Nick Wintermantel of Astrape Consulting. It is available for download at www.brattle.com.

The Brattle Group analyzes complex economic, finance, and regulatory questions for corporations, law firms, and governments around the world.  We are distinguished by the clarity of our insights and the credibility of our experts, which include leading international academics and industry specialists.  For more information, please visit www.brattle.com.

©2012 PR Newswire. All Rights Reserved.