How to Develop Renewable Energy Leveraging Nodal Modeling

In a dynamic and evolving energy market, the ability to perform detailed, real-time scenario analysis offers a competitive advantage for renewable energy companies like Linea Energy.

What follows is how Linea utilizes EnCompass results to inform their decision making and demonstrates how they apply nodal analysis throughout its development and acquisition activities.

About Linea Energy

Linea Energy is a renewable independent power producer (IPP) founded in late 2022, developing, owning, and operating wind, solar, and storage through innovative pathways to unclog renewable timelines.

Linea is focused on building a robust project pipeline through greenfield development and mergers and acquisitions. In less than two years, Linea has built a five GW pipeline of projects with signed site control and interconnection positions, with roughly another GW in the advanced stages of acquisition.

The Challenges of Large Loads and Data Centers

For 50+ years, US electricity demand growth has become increasingly decoupled from economic growth. This trend is now reversing, catching some in the utility industry unprepared – new infrastructure planning typically takes a decade, but the industry is facing a much shorter timeframe to prepare for handling the growth.

Drivers of new demand growth include: 

• Are estimated to comprise ~5% of current US electricity demand
• Are projected to grow 10-20% per year through 2030
• Have 50+ GW of new data center capacity announced since 2023.

• Has a focus on energy-intensive sectors: semiconductors, solar, and battery manufacturing
• Is expected to add a significant amount of high load factor demand.

• More electric vehicles and heating electrification, primarily in the Northeast and West, will boost demand.
• There’s potential demand from grid-connected electrolyzers for green hydrogen.

Additional Industry Trends

Challenges

• There’s a projection of 5-10% electricity demand growth over five years, varying by region.
• In the US there’s a slowing of interconnection studies and transmission capacity additions.
• Coal and natural gas plants are scheduled to retire.
• Long lead times (up to five years) for critical equipment such as large transformers continue.

Implications

• This means likely upward pressure on power prices.
• Meanwhile, opportunities for renewable developers with increased demand for clean energy (especially late-stage projects) will grow.
• The US needs large-load interconnection processes. Utilities must prioritize and manage new large loads.
• There’s a behind-the-meter generation boom, and there are new tariff structures.
• Current transmission planning processes are too slow to meet immediate growth needs.

Why In-House Nodal Modeling?

Traditional infrastructure planning typically requires five to 10 years, but energy companies now have a much shorter timeframe for planning. 

One way Linea Energy is innovating is through our approach to project analysis and risk assessments. This brings us to a critical capability we've developed in house: nodal modeling.

Our internal nodal modeling capabilities provide several key advantages: 

• Customized Analysis: Tailored to specific projects and portfolio, we can focus on areas of particular interest and adjust parameters and scenarios quickly. 
• Timely Decision-making: We can respond quickly to market changes or new opportunities with a faster turnaround for project evaluations and risk assessments.
• Enhanced Risk Management: We have more frequent and detailed risk assessments and a better understanding of project-specific risks and market dynamics. We can also run multiple scenarios and sensitivity analyses.
• Cost-Effectiveness: We reduced reliance on external consultants and had economies of scale as the capability is used across multiple projects.
• Proprietary Insights: We developed unique market perspectives that can provide a competitive edge and identified opportunities that may not be apparent in third-party analyses. We also built institutional knowledge specific to Linea's needs and strategy.

Download the case study to see how the Linea Energy team applies nodal analysis throughout their development and acquisition activities and utilizes EnCompass to better inform their decision making. See the full results. 

About the author: Arebise Deng is a seasoned professional with over nine years of experience in North America power fundamentals and production cost modeling. Her journey includes seven years with Aurora (Standard Zonal & Capacity Expansion) and two years with EnCompass (Zonal & Nodal Analysis), during which she has acquired extensive knowledge in energy, capacity, ancillary services, and REC markets. Her role includes conducting energy market research, producing fundamental curves, and actively monitoring all US regional market regulation changes and price trends.