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COMPARE AND CONTRAST ELCC METHODOLOGIES ACROSS CPUC PROCEEDINGS

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Why Use ELCC?• California currently uses a time-window approach to value the capacity

contribution of renewable resources

– Net qualifying capacity is based on the 30th percentile of renewable production during specified peak time window (2-6 pm, June-Sept.)

– Most utilities and ISOs across the country use similar heuristics

• Heuristic approaches have the benefit of simplicity but are not as accurate as a reliability-based approach

• ELCC measures resource contributions across year, not just in peak period

• Inaccuracies of heuristics are magnified as renewable penetration increases

• California Senate Bill 2 (2011) requires use of ELCC

“…the commission shall determine the effective load carrying capacity of wind and solar energy resources on the California electrical grid. The commission shall use those effective load carrying capacity values in establishing the contribution of wind and solar energy resources toward meeting the resource adequacy requirements established pursuant to Section 380.”

http://www.leginfo.ca.gov/pub/11-12/bill/sen/sb_0001-0050/sbx1_2_bill_20110412_chaptered.pdf

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Factors that Affect the Marginal Capacity Value of Renewable Generation

• Coincidence with load– Locations with better solar resources and more production later in the

day will have higher ELCC values

• Production variability– The potential for low production when energy is needed and/or high

production when energy is not needed reduces the value of a resource

• Location– Distributed resources may avoid transmission and distribution losses

• Existing quantity of variable generation– Common resource types should show diminishing marginal returns,

each additional unit of variable generation has less capacity credit than the previous unit

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ELCC Value in Application• Stakeholders have suggested multiple potential links between ELCC figures

determined in RA and the RPS Calculator:– Direct use of RA’s ELCC numbers– Use of same technology categories as RA

• The portfolio capacity value is a relevant calculation for resource planning– Due to the complementarity of different resources the portfolio value will be higher than

the sum of each individual resource measured alone• May need to attribute the portfolio capacity value to individual resources

– E.g., allocate RA procurement responsibility among multiple entities– There are many options, but no standard or rigorous way to do this

• The marginal capacity value, which considers the existing portfolio, should be used in procurement– This value will change over time with the mix of

system needs & resources

Individual Solar Capacity

Value

Individual Wind Capacity

Value

Combined Capacity

Value

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Renewable ELCC Values are Needed in Three CPUC Proceedings

• Values are used for a different purpose in each proceeding

Resource Adequacy• ELCC is used to assign

capacity credit to renewable resources for RA procurement

• Calculate portfolio wide ELCC and allocate to individual projects

• Short-term focus: 1-3 years out

• Historical data from resources in the ground

• Model: SERVM

LTPP• Establishes total

renewable capacity contribution to calculate residual system need

• Calculate portfolio wide ELCC-based capacity contribution

• Long-term focus: 10-20 years out

• Need historical and projected data

• Model: SERVM and RPS Calculator

RPS Procurement• Estimates contribution

from new resources in order to inform renewable procurement

• Marginal contribution from new resource depends on portfolio

• Long-term focus: 10-20 years out

• Need historical and projected data

• Model: Utility models

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Resource Adequacy

• RA calculates actual NQC to apply to each renewable project

• Only considers existing portfolio

LTPP

• Uses values from RA for existing resources and RPS Calculator for new renewable resources

• Evaluates alternative mitigation strategies for reliability issues

RPS Procurement

• Utilities look out 20 years and procure RPS energy

• Requires forecast of ELCCs that will be used in RA proceeding

ELCC Process Flow Chart

RPS Calculator

• RPS Calculator fills in with generic projects to reach RPS target

• Requires forecast of ELCCs used in RA proceeding

Other CPUC Proceedings

• Use system-wide ELCC-derived values at future penetrations to value demand-side programs based on their specific characteristics

• Energy Efficiency

• Demand Response

• Load Shifting

• Energy Storage

• Distributed PV

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Use of ELCC in RA Proceeding

• Principal purpose: Establish near-term system capacity procurement obligations for regulated load-serving entities (LSEs)

• Scale of calculation: requires calculation of the capacity value attributed to existing individual renewable energy projects in each LSE’s portfolio

• General method: Calculate system-wide ELCC using an LOLP model and allocate to individual projects

• Time period: Near-term (1-3 years out)• Data required: historical performance of existing resources• Model used: SERVM

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Use of ELCC in LTPP Proceeding

• Principal purpose: Develop multiple alternate resource portfolios to address any identified long-term system reliability needs

• Scale of calculation: requires calculation of the capacity value attributed to the entire portfolio of existing and forecasted resources and proposed reliability mitigations

• General method: Calculate system-wide total capacity contribution using an LOLP model; individual ELCCs not needed but may be helpful for allocation of system need

• Time period: Long-term (5-20 years out)• Data required: historical performance of existing resources

and projected performance of new resources• Model used: not determined at this time

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Use of ELCC in RPS Procurement

• Principal purpose: Procure least-cost mix of renewable resources when considering net portfolio value

• Scale of calculation: Requires calculation of the marginal capacity value associated with potential new renewable energy projects

• General method: Calculate marginal contributions of new renewable resource types using an LOLP model, given procurement that has already occurred in the CAISO system

• Time period: Long-term (5-20 years out)• Data required: historical performance of existing resources

and projected performance of new resources• Model used: Utilities can develop or procure models

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Summary

• ELCC values are used for different purposes in different CPUC proceedings

• Different types of values are used for each proceeding– RA: Historical values for each existing resource– LTPP and RPS Procurement: Forecasted values for potential future

resources

• It may not be practical to use a single model to calculate all of the ELCC values that are needed– However, the models should be in general alignment about the

marginal value of different resources at various penetrations– It may be useful to conduct a benchmarking exercise when all models

are available and ready for use