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Procuring power quickly and efficiently has never been more important for utilities and community choice aggregators (CCAs). Traditional planning and energy procurement strategies, which typically take years and cost millions, increasingly pose risks in the context of soaring demand growth and uncertain market conditions. Utilities and CCAs that can move swiftly to mitigate those risks are poised to benefit from significant time and cost savings.
In a recent webinar, Dr. Gary Dorris, CEO of Ascend Analytics, joined Paul Eory, Director of Resource Planning, and Dr. Brent Nelson, Managing Director of Markets & Strategy, to discuss how Ascend's Integrated Resource Plan (IRP) and All-Source RFP process allows utilities and CCAs to realize a least-cost, long-term, no-regrets power supply – all while shortening the planning-to-procurement process from years to months.
For many utilities and CCAs, energy planning and procurement involves a long and fairly costly process. Setting up an IRP, defining scenarios, engaging external stakeholders, and analyzing (and re-analyzing) scenarios can often stretch to more than a year before a portfolio recommendation is made. Even then, identifying energy procurement opportunities can take anywhere from one to three additional years. In this 'typical' approach to planning and procurement, the entire process can take 2-5 years and cost anywhere from $3.1 to $7.6 million.
As illustrated in Figure 1, Ascend's ability to combine resource planning and procurement processes can allow utilities and CCAs to shorten a years-long timeline to less than 12 months. This approach begins with an assessment of the current state, in which Ascend helps evaluate current portfolios to identify energy and capacity gaps. That information is then used to inform a scoping protocol to launch an RFP using Ascend's AEX™ power procurement platform.
Afterward, both processes move forward in tandem. On the procurement front, Ascend leaves the bid window open for approximately three months in order to ensure maximum competition, which helps ensure the lowest rates possible for ratepayers. As the market responds to the RFP, Ascend uses that information to inform scenario plans with utilities, CCAs, and other key stakeholders. Once the bidding window closes, Ascend leverages AEX to evaluate and rank bids in a fraction of the time that traditional processes take: what typically takes more than six months is done in less than three weeks. Thus, projects can be quickly shortlisted and an accelerated procurement decision can be made.
This approach produces multiple benefits for buyers and sellers. It efficiently allocates resources, which helps staff-constrained utilities and CCAs. It also saves months of model-building time by eliminating data transfers, streamlines the bidding process by ensuring that asset parameters input during bidding directly integrate into valuation models, and allows teams to focus on quality assurance rather than setup, thus reducing evaluation time from months to days.
Crucially, Ascend's approach also uses market-driven insights, gleaned during the bidding phase, to inform planning processes. This market-driven approach provides utilities and CCAs with real-time, up-to-date assumptions about what can actually be transacted on, rather than relying on studies that may be obsolete by the time that energy is procured. This approach also offers maximum transparency for all technologies and processes, which can help diffuse potential tension points between stakeholders.
For utilities and CCAs, designing an optimal energy procurement strategy requires accounting for long-term changing dynamics in power markets, in which weather increasingly drives supply, demand, and price, while market volatility and opportunity costs increasingly shape bidding behavior. As more renewables and storage enter power systems, it also becomes essential to correctly assess the value of flexibility for dispatchable capacity. Thus, planning and procurement decisions must go beyond what purely production cost models might predict, and account for the significant negative correlation between price and generation in renewables-heavy markets. Enforcing that correlation produces capture rates that start to decline because generation takes generation-weighted prices down relative to average price. Approaches that fail to account for that correlation can end up overvaluing renewable resources.
When planning irreversible investment decisions, utilities and CCAs must also carefully consider volatility on multiple time scales, including hourly and sub-hourly. For instance, volatility often exists in real-time markets in ways that do not manifest in day-ahead markets, as shown in Figure 2. Not intentionally modeling volatility (and real-time prices) will lead to overoptimized models that are inconsistent with the market and irrelevant for valuation of storage and other flexible assets.
Moving quickly in the planning-to-procurement process becomes even more important in uncertain market or policy environments. Longer timelines increase the probability of exposure to technology and resource cost risks such as increasing interest rates, inflation, supply chain issues, or economic shocks related to tariffs.
Another trend impacting energy planning and procurement strategies involves a movement beyond annual renewable energy credits (RECs) toward more sophisticated approaches to decarbonization, including hourly Locational Marginal Emissions (LMEs). Driven in large part by corporates such as Amazon and Meta, the hourly LME approach provides more cost-effective carbon reduction at a lower price, delivering greater value in a PPA compared to RECs alone. This approach can also provide opportunities for utilities and CCAs; rather than prescribing a particular technology, the goal-oriented nature of LMEs measures and rewards solutions focused on the ultimate goal of reducing emissions. This can encourage innovative resource choices and also allows for a proper valuation of flexible assets such as storage.
The Ascend Energy Exchange™ (AEX) is an exchange for renewable and storage projects that significantly reduces transaction costs and improves transaction outcomes by streamlining processes and facilitating a uniquely competitive process for clean energy procurement and project sales. Contact us to learn more or watch the webinar now.
Procuring power quickly and efficiently has never been more important for utilities and community choice aggregators (CCAs). Traditional planning and energy procurement strategies, which typically take years and cost millions, increasingly pose risks in the context of soaring demand growth and uncertain market conditions. Utilities and CCAs that can move swiftly to mitigate those risks are poised to benefit from significant time and cost savings.
In a recent webinar, Dr. Gary Dorris, CEO of Ascend Analytics, joined Paul Eory, Director of Resource Planning, and Dr. Brent Nelson, Managing Director of Markets & Strategy, to discuss how Ascend's Integrated Resource Plan (IRP) and All-Source RFP process allows utilities and CCAs to realize a least-cost, long-term, no-regrets power supply – all while shortening the planning-to-procurement process from years to months.
For many utilities and CCAs, energy planning and procurement involves a long and fairly costly process. Setting up an IRP, defining scenarios, engaging external stakeholders, and analyzing (and re-analyzing) scenarios can often stretch to more than a year before a portfolio recommendation is made. Even then, identifying energy procurement opportunities can take anywhere from one to three additional years. In this 'typical' approach to planning and procurement, the entire process can take 2-5 years and cost anywhere from $3.1 to $7.6 million.
As illustrated in Figure 1, Ascend's ability to combine resource planning and procurement processes can allow utilities and CCAs to shorten a years-long timeline to less than 12 months. This approach begins with an assessment of the current state, in which Ascend helps evaluate current portfolios to identify energy and capacity gaps. That information is then used to inform a scoping protocol to launch an RFP using Ascend's AEX™ power procurement platform.
Afterward, both processes move forward in tandem. On the procurement front, Ascend leaves the bid window open for approximately three months in order to ensure maximum competition, which helps ensure the lowest rates possible for ratepayers. As the market responds to the RFP, Ascend uses that information to inform scenario plans with utilities, CCAs, and other key stakeholders. Once the bidding window closes, Ascend leverages AEX to evaluate and rank bids in a fraction of the time that traditional processes take: what typically takes more than six months is done in less than three weeks. Thus, projects can be quickly shortlisted and an accelerated procurement decision can be made.
This approach produces multiple benefits for buyers and sellers. It efficiently allocates resources, which helps staff-constrained utilities and CCAs. It also saves months of model-building time by eliminating data transfers, streamlines the bidding process by ensuring that asset parameters input during bidding directly integrate into valuation models, and allows teams to focus on quality assurance rather than setup, thus reducing evaluation time from months to days.
Crucially, Ascend's approach also uses market-driven insights, gleaned during the bidding phase, to inform planning processes. This market-driven approach provides utilities and CCAs with real-time, up-to-date assumptions about what can actually be transacted on, rather than relying on studies that may be obsolete by the time that energy is procured. This approach also offers maximum transparency for all technologies and processes, which can help diffuse potential tension points between stakeholders.
For utilities and CCAs, designing an optimal energy procurement strategy requires accounting for long-term changing dynamics in power markets, in which weather increasingly drives supply, demand, and price, while market volatility and opportunity costs increasingly shape bidding behavior. As more renewables and storage enter power systems, it also becomes essential to correctly assess the value of flexibility for dispatchable capacity. Thus, planning and procurement decisions must go beyond what purely production cost models might predict, and account for the significant negative correlation between price and generation in renewables-heavy markets. Enforcing that correlation produces capture rates that start to decline because generation takes generation-weighted prices down relative to average price. Approaches that fail to account for that correlation can end up overvaluing renewable resources.
When planning irreversible investment decisions, utilities and CCAs must also carefully consider volatility on multiple time scales, including hourly and sub-hourly. For instance, volatility often exists in real-time markets in ways that do not manifest in day-ahead markets, as shown in Figure 2. Not intentionally modeling volatility (and real-time prices) will lead to overoptimized models that are inconsistent with the market and irrelevant for valuation of storage and other flexible assets.
Moving quickly in the planning-to-procurement process becomes even more important in uncertain market or policy environments. Longer timelines increase the probability of exposure to technology and resource cost risks such as increasing interest rates, inflation, supply chain issues, or economic shocks related to tariffs.
Another trend impacting energy planning and procurement strategies involves a movement beyond annual renewable energy credits (RECs) toward more sophisticated approaches to decarbonization, including hourly Locational Marginal Emissions (LMEs). Driven in large part by corporates such as Amazon and Meta, the hourly LME approach provides more cost-effective carbon reduction at a lower price, delivering greater value in a PPA compared to RECs alone. This approach can also provide opportunities for utilities and CCAs; rather than prescribing a particular technology, the goal-oriented nature of LMEs measures and rewards solutions focused on the ultimate goal of reducing emissions. This can encourage innovative resource choices and also allows for a proper valuation of flexible assets such as storage.
The Ascend Energy Exchange™ (AEX) is an exchange for renewable and storage projects that significantly reduces transaction costs and improves transaction outcomes by streamlining processes and facilitating a uniquely competitive process for clean energy procurement and project sales. Contact us to learn more or watch the webinar now.
Ascend Analytics is the leading provider of market intelligence and analytics solutions for the energy supply. The company’s offerings enable decision makers in power development and supply procurement to maximize the value of planning, operating, and managing risk for renewable, storage, and other assets. From real-time to 30-year horizons, their forecasts and insights are at the foundation of over $50 billion in project financing assessments. Ascend provides energy market stakeholders with the clarity and confidence to successfully navigate the rapidly shifting energy landscape.
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