Price Formation in Zero-Carbon Electricity Markets
Appropriately valuing hydropower’s contribution to the grid as energy markets evolve is key to justifying future hydropower investments and operations. The move towards clean energy technologies that do not have a direct fuel cost means that future electricity markets will be dominated by frequent, extended periods of low to zero electricity prices. Such unpredictable energy markets could make it prohibitively risky to develop new energy generation in the future. A report by Argonne National Laboratory and Pacific Northwest National Laboratory investigated the role of hydropower resources in future zero-carbon markets to set the stage for discussions about alternative electricity market mechanisms. Specifically, the report highlighted how generators could be compensated for relatively low-cost hydropower energy and found that hydropower was likely to benefit in a zero-carbon system by providing flexibility and energy storage in systems with high percentages of variable renewable resources.
Learn more and read the report, “Price Formation in Zero-Carbon Electricity Markets: The Role of Hydropower.”