Revenue-optimized photovoltaic orientation in a northern competitive electricity market with carbon offsets

Abstract

Solar photovoltaic (PV) farms are typically designed to maximize energy generation; however, their impacts on market prices can create conditions where revenues may be maximized by orienting the system to produce more energy at more valuable times of the day. PV generation offers its energy at a zero-dollar price in competitive electric markets, which tends to result in a drop in hourly price (“merit-order effect”) and reduction of revenues (“cannibalization effect''). We present an analysis of optimizing the orientation of PV systems for revenues, accounting for cannibalization in three pricing dynamics, with flat, medium, and steep merit-order curves. We employ a dataset of historical price-quantity offers from 2011 to 2019 from Alberta, Canada, a market that also has significant opportunities to generate carbon credits (CC). The market has an average maximum hourly load of ∼9 GW; we introduced 15, 400, 1000, and 3000 MW PV-capacity inputs, using tilt angles from 0° to 90° and azimuths from 90° to 270°. Our results show that for small PV capacities compared to the load, the market revenue-optimized orientations are close to the energy-optimized orientations, as would be expected. At higher levels of PV capacity, market revenue-optimized orientations deviate from the energy-optimized orientation as price cannibalization increases. The extent of this deviation depends on the slope of the historical merit order. When CC are introduced into the simulation, the total revenue-optimized orientation moves back towards the energy-optimized orientation as the CC overcome cannibalized market losses but exasperate overall market price depression.

Keywords

• Photovoltaic
• Orientation
• Revenue
• Electric Market
• Carbon Credits
• Price