The marine energy potential in the United States is twice the current total national electricity consumption. Generally, it has been cost-prohibitive to take advantage of this tremendous resource. We are developing and launching a framework to analyze the potential revenue streams for marine energy to participate in existing electricity markets. This framework will provide wave energy and offshore wind investors key insights into the site-specific expected revenues and encourage marine energy development in the region through informed decision-making.
The revenue analysis framework takes into account the site-specific power generation potential of the marine technologies and will maximize their profits from selling energy into regional electricity markets. The power generation potential at select sites is based on the RM6 energy converter and site-specific hourly capacity factors for wave energy and offshore wind. Pricing data is collected from the regional electricity markets’ Independent System Operators, including locational marginal pricing for participation in wholesale electricity markets, and ancillary services, such as spinning and non-spinning reserves provisions. Preliminary analyses for the West Coast show that ancillary services prices are lower than locational marginal prices by an order of magnitude or more, thus bidding to the wholesale electricity market creates the highest revenue. Future work includes considering nuances of participating in ancillary service provision. Future work will also include the incorporation of the blue economy markets as potential revenue streams and the identification of optimal electricity market bidding strategies for wave and offshore wind energy developers to maximize profits. Furthermore, this work aims to help reshape electricity market policy for a stronger business model for marine energy technologies. This can occur if Independent System Operators would allow wave and wind energy technologies to participate in the different ancillary services by updating their technical regulations. This will provide the new marine energy industry opportunities to compete with the traditional technologies.
The goal of this revenue analysis framework is to stimulate the development of the marine energy markets and diversify the national energy landscape while, as a byproduct, allowing for the development of blue economy markets in the region. The advantages of the analysis go beyond the development of cheap and reliable power generation. It will further lead the way for introducing electricity market reforms for the incorporation of renewable/marine energy into a broader electricity market services portfolio.
In addition to the revenue analysis, we are conducting a power systems capacity expansion analysis to evaluate the benefits and impact of the deployment of wave energy and offshore wind technologies from the perspective of grid planning in the Western Electricity Coordinating Council (WECC) in 2050. The input data into our capacity expansion model, SWITCH WECC, includes: (i) existing generators across the WECC, (ii) wave energy and offshore wind candidate projects, (iii) other candidate projects such as solar, wind, geothermal, biomass and thermal power plants and storage technologies, (iv) existing and potential transmission lines between the WECC load zones, and (iv) 2050 load projections for each of the WECC load zones. We run 10 scenarios in SWITCH that consider a range of investment and operational costs for wave energy and offshore wind. SWITCH provides the least-cost power generation and transmission build-out solution for each of the scenarios we design, in order to evaluate optimal deployment, electrical generation, collocation, and curtailment of wave and offshore farms in 2050.