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Energy Market
Green Final
| Term | Definition |
|---|---|
| Theoretical electricity grid path from generation to use | Power plant to transmission substation to high voltage transmission lines to power substation to transformer to transformer drum to house |
| Summer load pattern | trough at 4am, builds throughout day as AC kicks on then falls at night |
| Winter load pattern | Not as low trough at 4am, morning spike with lights and coffee, falls during day, then spikes in evening with lights on and tv |
| real time energy market frequency | typically clears every 5 minutes |
| near term energy market | day-ahead energy market approximately one day forward |
| LMP acronym | locational marginal pricing |
| LMP system | major US markets use it, create hourly and sub-hourly prices at every locations |
| LMP formula | = energy cost + marginal congestion costs + marginal losses |
| why offtake PPA is important | project finance structure with huge debt is ill-suited for absorbing price shocks, need someone who can like Utility, corporate entities, creditworthy retail customers, hedging counterparty |
| ISO acronym and meaning | Independent Service Operator, essentially who manages the connection between generator and user |
| capacity markets | ISOs will pre-auction capacity for various zones to ensure capacity will be available for reliability |
| Where is generator paid | at location |
| Where does load pay | at its location on the grid |
| locational price basis | difference in price between generator and purchasing utility |