Generator Construction – Tips Analysts Need to Know
MARKET SIMULATION MODELING: Generator Construction – Tips Analysts Need to Know
By Jason Atwood | Director of Business Development email@example.com
Part 3 of 4.
Mitigating generator siting risks is crucial. What challenges do analysts face and how do they overcome them?
It is imperative to avoid investing millions of dollars in a new generator in a highly congested area or make other siting mistakes. This poses the questions: What type of generation should be constructed? When and where should it be constructed? What should be the maximum output?
What type of generation should be constructed?
Most companies currently focus on wind, solar, and storage, while a few concentrate on natural gas fired generation. Though nuclear generation can deliver zero carbon emissions to reach compliance goals, cost of construction is extremely high and permitting is a challenge. This explains why the Vogtle expansion in Georgia will be the only new nuclear project in the past 25 years. However, this has the possibility of changing in the next ten years due to the aggressive goals of achieving zero carbon and advancements in micro-reactors. Unless something drastically changes in carbon capture and sequestration, there will likely be no further advancements in coal plants. The power industry is mainly focused on renewable resources, storage, and natural gas.
When and where to site the generation?
Typically, this modeling process for siting generation is started at the zonal level, then broken down to the individual bus location. It is essential to have robust modeling software that can perform zonal and nodal simulations. It is also vital to use a market database that includes investment costs for each type of generator along with operating parameters. The modeling software should consider staged projects such as constructing simple cycle peakers and then converting them to a combined cycle plant in the future. Revenue and profit forecasts for 30 to 40 years are often required to obtain financing or regulatory approval. Upon identifying a profitable zone and timeframe to build the facility, the next step is additional evaluation at the bus level.
It is essential to model at the nodal level to capture transmission congestion and generator curtailment risks associated with the proposed power plant. Fees are required to submit generators into the interconnection queue, so to make the most of your time and stretch your dollar you only want to submit the best sites into the generation interconnection process.
Prior to modeling a new generator, run a nodal base case to compare change case results. Create a scenario for each bus of interest and model the generation. Run each scenario independently and compare to the base case. Consider factors such as generator curtailment and transmission congestion: the project may exacerbate congestion problems or create counterflows to relieve them. Though generation may be the focus, review how the new generator may be impacted by transmission and how it may impact energy prices. Adjust the megawatt output as needed to determine available transmission capacity at particular locations.
Examine all necessary simulations such as the impact of a retiring neighboring facility or the construction of a competitor plant nearby. Consider any new transmission and how it may influence the plant. Compare the LMP of the generator bus to the LMP of the zone or hub to determine the power basis differential. There are tens of thousands of megawatts in the ISO/RTO generator interconnection queues. Modeling the market and simulating multiple scenarios reduces risk in siting a generator in a sub-optimal location.
Though this process takes time and effort, “if you fail to plan, you are planning to fail,” as Benjamin Franklin said. Don’t take a chance, use EnCompass to model the market.
The EnCompass software product is the industry leader in representing North American power markets and offers the ability to easily and thoroughly analyze changing market structures, zonal or nodal powerflow transmission representations, environmental compliance programs, price forecasting and resource planning applications. Don’t be limited by insufficient or outdated power planning software or software designed for different markets. Call or email us to schedule a demo to see what EnCompass can do for your organization.
Anchor Power Solutions provides planning software and consulting services for the power industry with a focus on market price forecasting, economic transmission analysis, integrated resource planning, budgeting, and risk analysis. Anchor Power Solutions developed EnCompass Software to accomplish all these functions in a single, easy-to-use system. For a custom demonstration, contact firstname.lastname@example.org.