EnCompass will calculate the marginal cost (shadow price) of meeting energy and ancillary service requirements as part of a standard simulation.
This is equivalent to a system lambda type of calculation that considers incremental fuel and variable costs but not any startup or no-load costs. EnCompass can also dynamically adjust energy and ancillary bids to account for these costs and minimize the amount of uplift to make generators whole.
CAPACITY / SCARCITY PRICING
EnCompass can forecast annual capacity prices using the same type of methodology used in PJM and New York, including downward-sloping demand curves. New capital projects and resources eligible for retirement will submit capacity bids to recover fixed operating and capital carrying costs, less any profits from the energy and ancillary service markets. EnCompass will dynamically adjust energy and ancillary service bids if no capacity market is modeled or if there are still unrecovered costs, similar to the scarcity pricing mechanism used in ERCOT.
Horizons Energy has developed complete EnCompass databases for North American power markets. EnCompass can forecast 30-year prices for energy, ancillary service, capacity, emission allowances, and renewable energy with these databases. Other market metrics can be produced, including hourly generator operations, transmission flows, and congestion costs.
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