Common Contracts
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Reliability Contracts Between Renewable and Natural Gas Power ProducersJune 4th, 2019
Abstract—Renewable power adoption has required policies that protect intermittent generators, such as wind and solar, from system-level costs of resource shortfalls. It has been shown that if renewable generators were to accommodate these costs in energy market settlement, significant renewable generation cur- tailments would ensue, especially as the penetration of renewables grows. Based on the current evolution of policies towards unmet commitment penalties for intermittent generators, we propose a reliability contract between a renewable power producer (RPP) and a natural gas power plant (NGPP) where the NGPP fulfills the RPP unmet commitments in low resource scenarios. We consider a day-ahead energy market where players are scheduled based on quantity-price bids in a least-cost manner by an Independent System Operator (ISO). We analyze the contract against a baseline scenario where the RPP faces the shortfall penalty, deriving optimal commitments and a condition where the adoption
