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Ascend Analytics led the 2020 Clean Energy Request for Offer (RFO) on behalf of Clean Power Alliance (CPA), the largest Community Choice Aggregator (CCA) in California. CPA solicited competitive proposals in October 2020 for the purchase of 15-year renewable energy and storage contracts to fulfill its future energy needs, resource adequacy requirements, and renewable portfolio standard (RPS) targets by 2030. Ascend used a highly automated process for RFO valuation. Using software innovation, Ascend has taken a process that commonly takes utility in-house staff months to a matter of weeks. About our expedited process CPA RFO manager Erik Nielsen said, “It was mind blowing how efficient you guys were.”
The results were heavily skewed toward selection of instate solar plus storage with some wind and geothermal also receiving overall values worthy of shortlisting for Power Purchase Agreement (PPA) contracting. Despite a record number of 43 standalone storage proposals, the value of the investment tax credit for storage, tipped the economic scale toward the hybrid projects.
In total, Ascend evaluated a total of 105 conforming offers that included solar plus storage, wind, geothermal, standalone storage (both 4 hours and 8+hours), and firm/shaped energy products.
Offers were evaluated based on a combination of quantitative and qualitative criteria. Quantitative criteria focused on project economics assessed at the nodal level inclusive of valuation at both day-ahead (DA) hourly prices and real-time 15 and 5 minute prices for energy and ancillary services. Because of consideration of nodal values, basis and solar weighted basis forecasts recognized the locational value of projects. Qualitative criteria focused on factors related to environmental stewardship, workforce development, development risk, project location, and impacts on disadvantaged communities. An environmental screening was also performed in conjunction with The Nature Conservancy to assure projects did not cause a negative environmental impact to endangered species, loss of agricultural land, or other environmental values.
Projects were submitted from across the west, but most are located in the Los Angeles region and in California’s Central Valley
The economic assessment consisted of valuing project revenues across CAISO day-ahead (DA), real-time (RT), and ancillary services markets. Avoided resource adequacy (RA) costs were also included in the final valuation, as applicable. Ascend used its Market Forecasts in conjunction with the PowerSIMM™️ model for resource valuation, determining both project value and risks through stochastic studies that quantify uncertainty in future energy prices. Valuations were performed down to the 5-minute real-time market price for each node of interconnection, which provided CPA with insight into the price volatility and basis risk dynamics for each project.
The relative valuations are shown below. Values are not disclosed to protect competitive information.
Solar battery hybrid projects were the clear winner, proving to be the most economic, while wind and geothermal projects were also shortlisted to add resource diversity and sun-down clean energy to the portfolios. Storage paired with solar is more competitive compared to standalone storage because of the Investment Tax Credit (ITC), which undercurrent law declines from a 26% refund of the capital cost to 22% in 2023 and10% 2024 and beyond. Projects either in the CAISO footprint or that demonstrated clear deliverability into CAISO also benefited from more confidence that the project would receive net qualifying capacity (NQC) value for compliance with California’s Resource Adequacy program.
Additional details on the valuation results can be found in the Energy & Planning Resources Committee agenda packet on the Clean Power Alliance website. Ascend Analytics is providing on-demand analysis to support CPA in the negotiation phase.
Read more about Ascend’s energy resource procurement services or contact Anthony Boukarim, Senior Manager, Resource Planning Consulting, for more information.
Ascend Analytics led the 2020 Clean Energy Request for Offer (RFO) on behalf of Clean Power Alliance (CPA), the largest Community Choice Aggregator (CCA) in California. CPA solicited competitive proposals in October 2020 for the purchase of 15-year renewable energy and storage contracts to fulfill its future energy needs, resource adequacy requirements, and renewable portfolio standard (RPS) targets by 2030. Ascend used a highly automated process for RFO valuation. Using software innovation, Ascend has taken a process that commonly takes utility in-house staff months to a matter of weeks. About our expedited process CPA RFO manager Erik Nielsen said, “It was mind blowing how efficient you guys were.”
The results were heavily skewed toward selection of instate solar plus storage with some wind and geothermal also receiving overall values worthy of shortlisting for Power Purchase Agreement (PPA) contracting. Despite a record number of 43 standalone storage proposals, the value of the investment tax credit for storage, tipped the economic scale toward the hybrid projects.
In total, Ascend evaluated a total of 105 conforming offers that included solar plus storage, wind, geothermal, standalone storage (both 4 hours and 8+hours), and firm/shaped energy products.
Offers were evaluated based on a combination of quantitative and qualitative criteria. Quantitative criteria focused on project economics assessed at the nodal level inclusive of valuation at both day-ahead (DA) hourly prices and real-time 15 and 5 minute prices for energy and ancillary services. Because of consideration of nodal values, basis and solar weighted basis forecasts recognized the locational value of projects. Qualitative criteria focused on factors related to environmental stewardship, workforce development, development risk, project location, and impacts on disadvantaged communities. An environmental screening was also performed in conjunction with The Nature Conservancy to assure projects did not cause a negative environmental impact to endangered species, loss of agricultural land, or other environmental values.
Projects were submitted from across the west, but most are located in the Los Angeles region and in California’s Central Valley
The economic assessment consisted of valuing project revenues across CAISO day-ahead (DA), real-time (RT), and ancillary services markets. Avoided resource adequacy (RA) costs were also included in the final valuation, as applicable. Ascend used its Market Forecasts in conjunction with the PowerSIMM™️ model for resource valuation, determining both project value and risks through stochastic studies that quantify uncertainty in future energy prices. Valuations were performed down to the 5-minute real-time market price for each node of interconnection, which provided CPA with insight into the price volatility and basis risk dynamics for each project.
The relative valuations are shown below. Values are not disclosed to protect competitive information.
Solar battery hybrid projects were the clear winner, proving to be the most economic, while wind and geothermal projects were also shortlisted to add resource diversity and sun-down clean energy to the portfolios. Storage paired with solar is more competitive compared to standalone storage because of the Investment Tax Credit (ITC), which undercurrent law declines from a 26% refund of the capital cost to 22% in 2023 and10% 2024 and beyond. Projects either in the CAISO footprint or that demonstrated clear deliverability into CAISO also benefited from more confidence that the project would receive net qualifying capacity (NQC) value for compliance with California’s Resource Adequacy program.
Additional details on the valuation results can be found in the Energy & Planning Resources Committee agenda packet on the Clean Power Alliance website. Ascend Analytics is providing on-demand analysis to support CPA in the negotiation phase.
Read more about Ascend’s energy resource procurement services or contact Anthony Boukarim, Senior Manager, Resource Planning Consulting, for more information.
Ascend Analytics is the leading provider of market intelligence and analytics solutions for the power industry. 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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