EXECUTIVE SUMMARY
Optimizing Automated Trade Strategies
KEY TAKEAWAYS
- Renewables may introduce challenges to grid operations that are best addressed with batteries.
- Forecasting software plays a key role in meeting requirements for renewables use cases.
- NextEra Analytics maintains forecasts with up-to-date regulatory information to ensure compliance.
The variability of renewable energy sources, such as wind and solar, can make it challenging to predict output.
Forecasts and tools that help analyze and optimize the operation of assets are increasingly critical in today’s variable energy landscape. NextEra Analytics develops solutions that enable forecasting and optimization for low-cost, sustainable power systems, giving energy providers the ability to capture value from their assets.
Optimizing Automated Trade Strategies
Dive into the world of Battery Energy Storage Systems (BESSs) and explore how algorithmic tools can strategically optimize BESS operations, enabling financial efficiency, reliable capacity during peak demand, and compliance with evolving ISO frameworks for a sustainable energy future.
Download Summary PDFOpens in a new window.Speakers
Context
Context
The presenters discussed challenges created by the increase in renewable energy sources and how reliable forecasting software can help address those challenges.
Key Takeaways
Renewables may introduce challenges to grid operations that are best addressed with batteries.
Battery energy storage systems are the most valuable tools for energy optimization.
In addition to maximizing the value of renewable energy assets, batteries can offer energy reliability and cost savings benefits such as:
Arbitrage
Arbitrage
Solar energy production is at its peak during daylight hours; however, energy demand at that time is relatively low. As the sun sets, energy production drops, but demand increases sharply. The rapid rise in demand can drive spikes in wholesale energy prices, but can also be difficult for the grid to handle, presenting an opportunity for batteries to capture real-time energy arbitrage.
Load shifting
Load shifting
As energy costs vary and depend on the type of tariff a business is on, using battery management tools in conjunction with reliable forecasting software can help keep overall energy costs low. For some businesses, their tariff type might follow a set fluctuation in energy costs; the costs will be low or high depending on a schedule provided ahead of time. Energy usage can be optimized through load shifting: charging batteries when prices are low and pulling load from the batteries when prices are high.
Peak shaving
Peak shaving
For businesses with tariffs that include demand charges or coincident peak charges, there is no schedule for when energy costs are going to be high. Demand charges are based on the highest amount of power used at any one time during a billing period, regardless of overall use. Coincident peak charges are fees incurred when the highest usage coincides with the grid’s busiest time. By leveraging forecasts to predict peaks in power consumption and/or when the grid is going to reach peak demand, batteries can be charged ahead of time to cover load during the forecasted period and reduce energy costs.
Ancillary services
Ancillary services
Large and sudden changes in electricity supplier demand can cause the North American grid frequency to deviate from 60 Hz. To support grid frequency regulation, the independent system operators (ISOs) or balancing authorities need assets that can be ramped up or down quickly to offset sudden changes in electricity supplier demand. Batteries are an excellent fit for this use case, with the ability to rapidly adjust from charging to discharging and back again.
In some areas, voltage fluctuations can occur due to changes in load, especially from high-powered industrial equipment or significant variations in distributed generation. In this use case, batteries provide voltage regulation, acting as a dynamic buffer within the grid by supplying or absorbing reactive power to manage voltage fluctuations.
“It’s not as simple as just charging a battery in the morning and then discharging it in the afternoon. There are a lot of factors that go into it, like tariffs, how an organization may be sourcing their energy — all of that needs to be taken into account to maximize savings.”
– Lester Aponte, Technical Sales Lead, NextEra Analytics
“It’s not as simple as just charging a battery in the morning and then discharging it in the afternoon. There are a lot of factors that go into it, like tariffs, how an organization may be sourcing their energy — all of that needs to be taken into account to maximize savings.”
– Lester Aponte, Technical Sales Lead, NextEra Analytics
Forecasting software plays a key role in meeting requirements for renewables use cases.
Forecasting software and tools, such as the NextEra 360 SaaS platform, provide analytical and predictive capabilities to optimize effective arbitrage, load shifting and peak shaving, and ancillary services. NextEra 360 forecasting software is especially useful when working with batteries because of the variability and differences in response capabilities.
NextEra Analytics develops forecasts for energy and ancillary prices, renewable resources, and points of interconnect availability. In some cases, NextEra 360 also forecasts load for co-located premises. Together, these forecasts are leveraged to model a battery's power capability and determine how much energy will be stored over time. Then, complex optimization algorithms that are designed to fit the use of the battery or other source, also accounting for energy price forecasts created by the NextEra Analytics quantitative team, are applied to produce a strategy for maximizing revenue.
NextEra Analytics offers a robust solution for three key use cases:
Dynamic Forecasts
Battery Management
Customized Monitoring
Dynamic Forecasts
Software plays a crucial role — tools such as NextEra 360 take in real-time data and automatically update forecasts to increase accuracy. To provide further support, the NextEra Analytics quantitative team is dedicated to building forecasts, conducting market research, and creating trade strategies.
Dynamic Forecasts
Battery Management
Customized Monitoring
Battery Management
Reaping the benefits of batteries, such as real-time energy arbitrage, peak shaving, and others, requires strong forecast capabilities and algorithms for energy optimization over several value streams.
Dynamic Forecasts
Battery Management
Customized Monitoring
Customized Monitoring
Every customer has a different risk tolerance. NextEra 360 software maximizes revenue across products within the boundaries of an individual customer’s risk-mitigation requirements. NextEra Analytics reviews every customer’s operational and financial performance characteristics and risk posture — including warranty constraints, for example — against various strategies. NextEra Analytics will recommend a strategy and continually monitor performance.
“It really boils down to two metrics: First, how much of the theoretical maximum revenue did we capture? And second, how much above a baseline is our performance?”
– Carlos Zada, Manager of Product Management, NextEra Analytics
“It really boils down to two metrics: First, how much of the theoretical maximum revenue did we capture? And second, how much above a baseline is our performance?”
– Carlos Zada, Manager of Product Management, NextEra Analytics
Dynamic forecasting is especially useful when forecasting solar or wind power
“These markets are constantly evolving, and many are still even adapting to batteries as a newer resource that we’re seeing on the grid. It’s critical that our quantitative team work closely with our regulatory and policy specialists … to make sure we’re compliant with market rules.”
– Lauren Foley, Energy Risk & Resilience Manager, NextEra Analytics
“These markets are constantly evolving, and many are still even adapting to batteries as a newer resource that we’re seeing on the grid. It’s critical that our quantitative team work closely with our regulatory and policy specialists … to make sure we’re compliant with market rules.”
– Lauren Foley, Energy Risk & Resilience Manager, NextEra Analytics
NextEra Analytics maintains forecasts with up-to-date regulatory information to ensure compliance.
In addition to managing the influx of renewable energy sources and batteries to the grid, operators must adhere to changing regulations from agencies such as NERC and FERC. As the market continues to evolve and more batteries come online across various ISOs, there is an exponentially growing need for software that can optimize ISO market participation and help operators remain compliant in the ever-evolving regulatory landscape.
In addition to managing the influx of renewable energy sources and batteries to the grid, operators must adhere to changing regulations from agencies such as NERC and FERC. As the market continues to evolve and more batteries come online across various ISOs, there is an exponentially growing need for software that can optimize ISO market participation and help operators remain compliant in the ever-evolving regulatory landscape.
One area that NextEra Analytics is closely watching is resource adequacy (RA), which is a critical topic in all ISOs and in all markets. RA plays a key role in maximizing value, yet it complicates system planning, as it depends on calculating the estimated reliability of a renewable resource’s capacity over a decade or more.
One area that NextEra Analytics is closely watching is resource adequacy (RA), which is a critical topic in all ISOs and in all markets. RA plays a key role in maximizing value, yet it complicates system planning, as it depends on calculating the estimated reliability of a renewable resource’s capacity over a decade or more.
NextEra Analytics continuously monitors requirements from regulators and ISOs across the country, incorporating changes into its forecasting algorithms. In addition to maintaining compliance in each market, the NextEra Analytics quantitative team is constantly working to help customers hit their revenue performance targets.
“Resource adequacy is definitely a hot topic in all ISOs and all markets … RA really is an important revenue stream to many resource types. Renewables are certainly no exception.”
– Sam Hile, Senior Policy Specialist, NextEra Analytics
“Resource adequacy is definitely a hot topic in all ISOs and all markets … RA really is an important revenue stream to many resource types. Renewables are certainly no exception.”
– Sam Hile, Senior Policy Specialist, NextEra Analytics
Additional Resources
Battery Energy Storage Systems — QuickChat Video
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