The SWIS DUCK – Value pricing analysis of commercial scale photovoltaic generation in the South West Interconnected System

Abstract

The Duck Curve is an illustrative term used to describe the compounding effect of small-scale renewable generation on the electricity demand curve in electricity markets. The “Duck Curve”11The effect is also been referenced as the “Duck Chart” in early literature on the topic. problem has become a topical subject in the electricity industry in recent years and is associated with issues such as minimum system demand, changes to ancillary service requirements, unsustainable ramp rates, risk of over generation, occurrences of negative wholesale prices and exit of large-scale thermal generation. Unfortunately in the South West Interconnected System (SWIS)22The SWIS is the name of the power system located in the south west corner in the state of Western Australia, Australia. the Duck Curve has been referenced at a cursory level with a limited amount of formal analysis with poorly formed views of the effect of what it is trying to describe. This paper summarises a literature review undertaken of the Duck Curve focusing on econometric aspects rather than power system engineering in the SWIS. The paper develops a hypothesis and substantiates that behind the meter generation should be displacing the revenue from all generation, but the effect will be more pronounced in commercial scale PV farms as the generation profile of both rooftop and commercial PV is determined by irradiation levels that are in similar geographic locations. Due to high variance in electricity spot prices a value analysis approach was used to create a model suitable for Ordinary Least Squares analysis. This analysis showed evidence for the proposed hypothesis and more importantly that econometric rigger using easily accessible tools and techniques can be applied to the Duck Curve concept with significant results.