Presentation Description: In organized power markets, power grid imbalances resulting from excess renewable energy generation may cause economic curtailment, a phenomenon in which low (often negative) prices signal wind or solar energy generation to reduce output or halt entirely. Rapidly changing market dynamics and an increasing abundance of renewable energy may result in larger and more frequent economic curtailment events, necessitating a forward-looking model of economic curtailment for clean power asset valuation and risk assessment. In this talk, we use data on historical plant level generation, curtailment, and energy prices from the Electric Reliability Council of Texas (ERCOT) to develop a Markov Chain model of economic curtailment as a function of real-time energy prices at regional price hubs. We apply our model to 1000 stochastic climate, energy generation, and price simulations for the next 15 years to assess the magnitude, distribution, and ramifications of economic curtailment in relation to hypothetical project generation and revenue.
