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Case Study

How a Developer Leverages Nodal Modeling for Renewable Energy Investment Decisions

Case Study, Nav, Linea Energy
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Customer

Customer Linea Energy is a renewable independent power producer (IPP) founded in late 2022, developing, owning, and operating wind, solar, and storage through innovative pathways to unclog renewable timelines.

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Background

Background Using EnCompass for nodal modeling, Linea Energy conducted a detailed analysis of a potential acquisition project in ERCOT.

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Results

Results Linea Energy discovered that the best scenario would be to have behind the meter load or nearby load. The next-best scenarios are upgrading transmission and then increasing storage penetration.

Project Information

Linea Energy's strategic use of nodal modeling offers significant advantages in a highly competitive and dynamic energy market. 

hd-encompass

Key Areas of Focus

  • ▶ Project Basis and Curtailment Assessment: Evaluating revenue impacts and operational constraints
  • ▶ Identification of Binding Constraints: Pinpointing transmission bottlenecks and their financial implications
  • ▶ Sensitivity Modeling: Stress testing the project under various market conditions, including transmission upgrades, load additions, and storage penetration
  • ▶ Congestion Analysis: Identifying top congestion hotspots as it can reveal opportunities where storage could alleviate congestion and earn congestion revenue

Average LMP Heat Map

Average LMP and basis evaluation provides good guidance to overall project siting. Locational marginal pricing (LMP) data helps identify areas where electricity prices are consistently high, indicating potential for profitable energy sales. Basis information shows the price difference between local nodes and major hubs, helping assess the financial risk of products such as hub settled PPAs. Areas with favorable LMP and basis can be prioritized for project development.

LMP Heat Map EnCompass 2

Congestion Analysis

Congestion data highlights areas where transmission constraints frequently occur. Identifying top congestion hotspots is crucial as it can reveal opportunities where storage could alleviate congestion and potentially earn congestion revenue. It can also help avoid areas where severe congestion might limit a project’s ability to deliver power to the grid.

Case Study, Congestion Analysis

Economic Curtailment Analysis

Combined with historical analysis, near-term nodal modeling can offer valuable insights into project basis risk, possible curtailment, and elements that may enhance or mitigate these challenges.

Case Study, Economin Curtailment Analysis

Conclusion

The analysis revealed that scenarios with nearby load additions and high storage penetration provided the best project outcomes. Conversely, downsizing the project resulted in the least favorable outcome.

Linea Energy’s strategic use of nodal modeling offers significant advantages in a highly competitive and dynamic energy market. By leveraging EnCompass and its in-house capabilities, the organization can conduct timely, customized, and detailed analyses to optimize asset performance, mitigate risks, and make data-driven decisions in project development and acquisitions.

“The EnCompass model serves as the cornerstone of our analytical process. It allows us to navigate and make sense of a market that’s evolving at extraordinary speed, helping us to anticipate changes and identify opportunities. This powerful visualization tool transforms the nodal results into actionable insights, supporting our developers to make strategic decisions in greenfield site selections.”

Arebise icon
Arebise (Xiaogeng) Deng, Senior Fundamental Analyst, Linea Energy

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