Author: The Volt

Dr. Gary Dorris, Ascend Analytics’ CEO, presented ‘Unlocking the Latent Value of Flexible Generation and Drive Additional Profits’ at Infocast’s PJM Market Summit 2015.

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The presentation focused on the changes in PJM supply fundamentals that are creating new price dynamics and opportunities for flexible generation.  Realizing opportunities to profit from real-time price volatility requires an understanding of price dynamics beyond traditional production costing.  The new paradigm to realize opportunity combines granular asset modeling at 5 minute time-steps with behavioral dynamics of agent response and system fundamentals.  In order to unlock the latent value of generation and drive additional profits, the presentation outlined how to:

  • Understand what are the fundamental drivers creating new price dynamics
  • Visualize price dynamics with geo-spatial plots that identify opportunities
  • Capture additional value through quantifying risk arbitrage opportunities in a hybrid modeling framework
  • Learn what technologies stand to profit the most from these changes.

Ascend Analytics presents to the CEO and Board of a large equipment supplier regarding identifying market opportunities for flexible energy generation

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Dr. Gary Dorris (CEO) and Dr. Brock Mosovsky (Sr. Analyst) of Ascend Analytics recently presented to the CEO and board of directors of a multi-billion dollar equipment supplier. The supplier is working closely with their customers to identify the most effective locations for flexible generation and requested Ascend Analytics’ expertise to assist them and their customers in their planning efforts. The supplier was keenly interested in the following points:

  • Translating price volatility in the real-time energy markets into extrinsic value for flexible generation assets
  • Market fundamentals and their impact on prices and volatility including: coal retirements, resource addition, intermittent generation assets (e.g., wind and solar)
  • Persistence value for natural gas generation assets serving a more valuable role in the U.S. supply stack because of increasing amounts of renewables being integrated into the grid. There will always be a risk associated with the lack of control over wind and solar generation; natural gas “peaking” units can fill this gap.

The invitation to present to the board was preceded by the recent release of Ascend Analytics’ report on the Identification of Market Opportunities for Flexible Generation.  The report includes interactive geospatial maps by ISO and highlights market price volatility by LMP for Day-Ahead and Real-Time markets.  Also, included is a detailed analysis of market fundamentals that includes a graphical view of generation supply stack and load, both present and future.  Finally, the report provides an analysis of ISO market rules to support maximizing value from Flexible Generation (inclusive of expected market changes to comply with the new FERC pay for performance regulation mandate).

For more information, please contact Ascend Analytics at (303) 415-1400 at info@ascendanalytics.com

Ascend Helps NorthWestern Monetize Risk In S.D. Resource Plan

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Ascend Analytics recently put its PowerSimm Planner software to great success for NorthWestern Energy in its formulation of a 10-year integrated resource plan (IRP) for South Dakota.

PowerSimm Planner helped NorthWestern realize value of adding highly flexible peaking resources to its generation fleet in the SPP and MISO market. Despite these markets having some of the lowest average energy costs in the country, Ascend uncovered a hidden opportunity to realize additional value through internal combustion units (ICU’s).

The ICU’s (Wartsila 50SG) attributes of no start-up costs and small heat rate penalty at minimum load provide substantial economic operating advantages over standard combustion turbines (GE 7FA).  These advantages are realized through capturing the more dynamic price signals of the 5 minute real-time energy market for energy and ancillary services.

“NorthWestern’s decision to enlist Ascend to provide the analytics for its South Dakota integrated resource planning (IRP) further solidifies our position as a leader in electric utility planning sing sophisticated modeling software to help power companies more cost-effectively predict and monetize unique opportunities,” Ascend Analytics President Gary Dorris said.

It marks the company’s second such collaboration with NorthWestern.  Last year, Ascend provided modeling support for NorthWesterns successful bid to acquire $870 million of hydroelectric generation in Montana.

NorthWestern also used PowerSimm to model supply portfolio, regional commodity prices, and energy resource characteristics in South Dakota.  The software introduced “meaningful uncertainty” into future simulations, capturing both the expected costs and risks of its portfolio there.

Traditional resource planning tools lack the sophistication of PowerSimm and fail to capture the extreme volatility and value of more flexible generating resources.  Other software planning models for IRPs fall short recognizing the value of flexible generating assets.

NorthWestern Energy concluded that current peaking options such as GE 7FA are not cost competitive with more flexible internal combustion engines (Wartsila 50 SG).  The additional value of a flexibility added an order of magnitude increase in profits.

Check out Ascend’s contribution to NorthWestern’s South Dakota resource plan via the utility’s website: Chapter 4 — Portfolio Modeling and Analysis

For more information, please contact Ascend Analytics at (303) 415-1400 at info@ascendanalytics.com.

Ascend’s New HyperDrive Flies At Warp Speed With Exceptional Accuracy

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Ever suffered from too-much-data-too-little-time syndrome?  Can’t seem to find enough hours in the day to get everything processed?

Ascend Analytics has the perfect solution for what ails you.  And it doesn’t involve copious amounts of coffee and energy drinks or chronic insomnia to work.

Let Ascend’s new HyperDrive burn the midnight oil for you.  Our new offering provides unparalleled performance and accuracy, putting your generation, loads, and hedge instrument data through thousands of iterations without compromising hourly dispatch optimization details.

HyperDrive, uses advanced computational and empirical modeling techniques that can put a 200-unit generation portfolio through its mandatory 2,000 hourly simulations over five years in under two hours, based on current experience.  Like the Tesla S, the speed is “insane” compared to anything out there.

The service fits a series of structural state-space regression models that capture the underlying uncertainty in weather, load, renewables and market prices combined with detailed chronological dispatch of generation.

HyperDrive’s computation efficiency does not compromise model accuracy by realizing results within 1% of detailed hourly results — even for complex combined cycle units in the volatile ERCOT market.

Take HyperDrive for a spin.  For more information, please contact sales at Ascend Analytics at (303) 415-1400 or info@ascendanalytics.com

Ascend’s PowerSimm Propels Riverside Utilities New IRP Over Finish Line

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Riverside Public Utilities recently won final approval of its 2014-2033 Integrated Resource Plan, thanks in part to Ascend Analytics’s PowerSimm Planner, which provided its analytic backbone.

Utility officials put the software to the test, quantifying costs and risks associated with critical IRP components, including retirement of coal-generation plant InterMountain Power Project, capacity expansion planning, renewable resources and energy storage.

PowerSimm Planner, a complete analytics platform for energy portfolio planning, capacity expansion and financial analysis, is designed to help energy planners and financial managers model revenue requirements, optimize power expansion plans and compare their financial impacts.

“We’re thrilled to have had the opportunity to help RPU get the biggest bang for its customers’ bucks and solidify its bottom line,” said Ascend President Gary Dorris.  “We helped utility officials determine the best path forward for swapping out its InterMountain coal-fired power generation for less-carbon intensive electricity production.  It’s a win-win-win for everyone involved – the consumers, the utility and the environment.”

PowerSimm Planner helped Riverside officials quantify projected costs and risks arising from 12 different resource planning scenarios to make up for the lost generation resulting from IPP’s phase-out.

All of them involved making market-hedged purchases according to varying degrees of load growth rate (weak to strong), prospective IPP phase-out dates (2020 and 2025), and percentage of renewables required (33% and 40%) in the utility’s power generation mix.

PowerSimm’s analysis showed that the rate of load growth proved a significant factor in future costs. Weak load growth produced COSLN forecasts ranging from 10% to 14% higher through 2033.

The IRP plan concludes that combined effects of phasing out InterMountain too early and termination of its free carbon allowances could drive up electricity costs as much as 1¢/kWh.

“From a strictly economic perspective, it does not currently make sense to try and unilaterally terminate our IPP contract any earlier than necessary.  Rather, we should continue to support a market driven dispatch scheme that recognizes the inherent carbon cost embedded in this energy asset, while planning for a replacement option that can come online just a few years before the IPP contract terminates,” the IRP plan states.

In addition, Riverside officials, with PowerSimm’s help, considered five other non-market-forward alternatives to replace IPP’s lost generation.  Those included: 1) building a new 100 MW GE LMS-100 high-efficiency, simple cycle gas plant; 2) using five 9.3MW Warsila 20V34SG simple cycle internal combustion units stacked together in a 46.5 MW generation facility; 3) purchasing 50W of the 1,000 MW IPP Repower Project; 4) replacing 75MW of IPP coal energy with renewable resources through a new long-term contract; 5) acquiring a near-term 150MW commercial tolling contract, effective January, 2016.

Overall, four of five alternatives presented resulted in higher service costs, and all of them produced greater uncertainty than the market-hedge scenarios.

Read the plan

For more information on Ascend’s PowerSimm Software Suite, contact sales at info@ascendanalytics.com or (303) 415-1400.

Ascend Analytics Establishes New Approach for Determining QF Rates to Protect Ratepayers

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Ascend Analytics delivers expert testimony on new approaches to develop Qualify Facility (QF) power contract rates that protected the ratepayers’ and utility’s interests.  The QF rates applied a novel new economic construct that followed FERC guidance under the Public Utilities Regulatory Act (PURPA).  During expert testimony, witness Dr. Gary Dorris, substantiated wind energy purchase rates through a Differential Revenue Requirement (DRR) approach using Ascend’s PowerSimm software.  The hourly avoided costs measured through DRR are the QF power contract rates.

The DRR approach differentiated between hours of power imports and exports to determine the hourly avoided cost to serve load.  Under import conditions, the model calculated avoided cost as a function of market price.  During export conditions, avoided costs were a function of the utilities own production cost from a lower cost power plant.  The result of utilizing market interactions to determine the avoided cost of production yielded the a more consistent and lower avoided cost over other approaches.

Recent Ascend Analytics “Best Practices” Course A Rousing Success

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Have you ever wondered how good Ascend Analytics’ Best Practices In Risk-Based Resource Planning Course is?  The latest round of attendees in San Francisco, California, offered nothing but high praise for the course’s material and its instructor, Ascend CEO Gary Dorris.

“I will be a much smarter regulator because of this course,” said California Public Utilities Commission analyst Alexander Cole; and David Miller, a senior regulatory analyst at CPUC, summed it up as “succinct relevant material expertly delivered.

The course came at just the right time for Ken Wong and his employer, Hawaiian Electric Company, where he serves as senior corporate energy planning engineer.  “We are very pleased with the conference as the time was perfect.  For several years we wanted to move toward incorporating stochastic analysis in our planning work so we could assess the variability of uncertainties we face.  We just didn’t have the software tools,” Wong said.  “We are looking to you to help train us by doing a stochastic analysis of our recent planning effort using your software.”

Redding Electric Utility Selects Ascend Analytics’ PowerSimm Software for Advanced Resource Planning

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Ascend Analytics is pleased to announce that Redding Electric Utility (REU) has selected Ascend’s PowerSimm energy risk management software to provide its resource planning analysis.  Ascend’s ability to scale PowerSimm to the needs of our clients provides REU the advanced analytics utilized by larger organization, such as AEP and NRG, at a cost that fits the City’s budget.

Ascend Analytics’ PowerSimm software solutions will provide REU’s Resource Planning Group, run by REU Assistant Director Dan Beans, a complete platform for critical energy decision analysis, portfolio management, and long-term planning.  REU will be equipped with the analytic and data infrastructure to support the decision analysis needed to prepare the City for a broad set of Planning uncertainties.

REU’s Planning Group requires a comprehensive analytical framework, PowerSimm gets the details right through accurately representing the physical and financial dynamics of the energy supply markets.  PowerSimm’s output reporting will provide REU the tools to make critical decisions to decrease the uncertainty of the City’s cash flows, improve its energy position analysis, provide insights for detailed asset valuations, and most importantly – the necessary tools to provide reliable, safe, low cost power to the City of Redding.

We believe Barry Tippin, Assistant City Manager and REU Director, stated it best when presenting the decision to the Redding City Council:

“The increasingly complex markets and ever-changing utility industry have increased the need for comprehensive analytics and risk analysis to assist in making informed decisions on long-term resource planning. The proposed software will provide Redding Electric Utility (REU) Resources Division staff the ability to:

  • Evaluate a range of alternative resource strategies and specific new opportunities
  • Support REU’s hedging and risk management activities
  • Provide input to the budget as well as regular reporting to management and operations
  • Analyze proposed legislative and regulatory mandates that may affect existing and new resources

There is a select group of software/modeling companies that can provide the products and services to meet the utility industry’s needs in resource planning.  REU’s Resources Division has actively pursued and evaluated these companies and their software packages.  Through this process, Ascend Analytics distinguished itself with the capability to provide the needed software and support services required to meet REU’s needs.”

Gary Dorris, President and CEO of Ascend, reiterates Barry’s thoughts “Ascend is very pleased that our new “Software as a Service” offering can conveniently deliver to Redding the same quality analytics we provide to America’s top three electric utilities.  Ascend’s PowerSimm software will provide the analytic intelligence and insights necessary to support complex critical decision analysis posed to today’s municipalities.  We look forward to building a long lasting relationship with the City of Redding and providing solutions that will further enable Redding to continue to provide consistently low rates to their customer base.”

Ascend is excited about the REU implementation project ahead.  Ascend looks forward to meeting, and exceeding, the current and future analytic needs of Redding Electric Utility.  For more information on PowerSimm Planner, please contact Ascend Analytics’ Sales at info@ascendanalytics.com or (303) 415-1400.