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The Economics Behind the California Duck Curve:

The California Independent System Operator (CAISO) has been monitoring and analyzing the Duck Curve and its future expectations for about a half a century now and their biggest finding is the growing gap between morning and evening hours prices relative to midday hours prices. According to their last study, the U.S. Energy Information Administration, found that the wholesale energy market prices over the past six months during the 5 p.m. to 8 p.m. period (the “neck” of the duck) have increased to a whapping $60 per megawatt-hour, compared to about $35 per megawatt-hour in the same time frame in 2016. However, on the other side they have measured a drastic decrease in the midday prices, nearing $15 per megawatt-hour. These high peaks and deep valleys are only growing further and further apart making this Duck Curve even more prevalent as our renewable energy production continues to grow.

To understand these deep valleys and the high peaks we need to look at many different variables that go into the renewable energy grid. The green resources such as solar, wind, geothermal, and hydroelectric are increasingly satisfying California’s total electricity needs. However, as of now, the technology that has been implemented puts a lot of control into consumers which leads to issues amongst different operating conditions. In order for it to run smoothly this would require flexible resource potentials to guarantee reliability from the renewable energy grid.

A critical part of this curve comes from the “Net load,” net load is the difference between expected load and anticipated electricity production from the range of renewable energy sources. In certain times of the year (namely Spring and Summer), the curves create a “belly” appearance in the midday that then drastically increases portraying an “arch” similar to the neck of a duck, consequently the name “The Duck Chart”.