Electric power systems have seen a recent surge in interest in hybrid resources—defined in this report as multiple resources (e.g., generation, storage, and/or load) that share a common point of interconnection, with the plant controlled as a single resource by the system operator. As utilities, grid operators, and resource owners and developers continue to seek new functionality from wind and solar technologies, hybrid systems can offer a number of advantages. Hybrid systems can provide grid services that solar or wind alone often cannot economically provide, and, importantly, hybrids can help to reduce the need for transmission upgrades.
In the space of three years, the number of hybrid resources proposed in U.S. interconnection queues increased from almost nothing to more than 150 GW, constituting around one-third of all new solar proposals and more than half of new storage proposals. This report discusses what hybrid resources are, why the industry is seeing increasing hybridization across many technology types, how these resources interconnect to the grid, and what this means for system operations and markets. It offers initial recommendations for system planners, market designers, and policymakers as they define market rules and requirements that govern hybrids’ use.
The report discusses the coordination and modeling of hybrids’ component resources and plant-level controls, outlines advantages and disadvantages of different participation models, and discusses resource adequacy and accreditation methods, which will become increasingly important for hybrid resources. As thermal generation retires and the capacity value of wind and solar resources diminishes as their levels rise, the capacity revenues for hybrid projects will likely continue to increase as a portion of these resources’ overall revenue mix.
Because hybrid resources are still in their infancy, it is important that system operators, policymakers, and regulators take care in how they define market rules and requirements that govern hybrids’ use. Requirements for hybrid resources should be defined in a technology-neutral manner and not be overly prescriptive about how grid needs are met, in order to afford flexibility and creativity in the design and implementation of new technologies in the future high-renewables grid.
The report offers the following guiding principles for consideration when implementing market policies, interconnection requirements, and incentive mechanisms for hybrid resources:
- Become less prescriptive and more technology-agnostic with definitions
- Leverage existing points of interconnection for additional resources
- Create multiple participation model options to facilitate greater flexibility and innovation, while allowing resources to provide all services they are technically capable of
- Develop broad participation models in advance for technologies that are not yet tested
- Give the asset owner the option to manage internal operation of the hybrid facility when they choose to do so, as long as they aim to meet performance targets defined by the system operator
- Consider synergistic effects and diversity benefits of combining complementary resources
- Reconsider traditional requirements that close doors for future flexibility and services in a transforming grid