Currently, we institute a one year delay in our estimation of energy market prices that are used for determining retirements and capacity additions. This means no capacity is built economically in the start year and that smoothing functions don't work well because the incorporate the zero value.
In the future, we should add a set of electricity dispatch calculations for the start year, even if simplified, to generate electricity market prices that we can use in the first year and then use smoothing functions.
Smoothing is important to prevent the model from wanting to build resources based on a single "good" year. We dealt with some of this by moving to five year average energy prices when calculating future profitability, but we still use those prices in a single year. We should also smooth out the annual fluctuations to better represent decision-making regarding resource profitability.
Currently, we institute a one year delay in our estimation of energy market prices that are used for determining retirements and capacity additions. This means no capacity is built economically in the start year and that smoothing functions don't work well because the incorporate the zero value.
In the future, we should add a set of electricity dispatch calculations for the start year, even if simplified, to generate electricity market prices that we can use in the first year and then use smoothing functions.
Smoothing is important to prevent the model from wanting to build resources based on a single "good" year. We dealt with some of this by moving to five year average energy prices when calculating future profitability, but we still use those prices in a single year. We should also smooth out the annual fluctuations to better represent decision-making regarding resource profitability.