CAISO time-of-day power prices are changing. The daily price profile now reflects a growing premium in the morning and evening hours, The profile also includes a steeper price discount in the midday hours. The new time-of-day prices represent a market incentive: ramp power supply up or down more quickly on command.
Changing Load Profiles Will Reward Power Storage and Demand Management
In the electric system, demand must always be met with generation supply. The goal is simple: meet grid reliability and to avoid blackouts. Historically, generation adjusted as customers turned equipment on and off, typically around the same time each day. The morning and evening hours are the most challenging for grid operators. This is the time generation supply must match rapid changes in demand.
The recent addition of solar generators has contributed to steeper ramp events in the morning (ramp-down) and evening (ramp-up). In response, thermal generation units must decrease output in the morning with the sunrise and increase output in the evening as the sun sets. The new pricing premium suggests that ramp handling is getting harder for traditional generation capacity. The new time-of-day power prices are call to service for new ramp response strategies, including power storage and demand management.
Time-of-Day Power Prices
The power prices profiled reflect simple averages by hour for the CAISO trading hubs zP26, NP15, and SP15. The profiles cover the period January through July for the three years profiled