The National Resources Defense Council (NRDC) is looking into 2017 and calling for the grid to continue evolving to meet the energy needs of people in the 21st century while protecting the environment. The advocacy organization called for market reforms to make it easier to incorporate more renewable energy and fully account for the value of renewable energy.
NRDC’s Senior Attorney, Sustainable FERC Project, Energy & Transportation Program John Moore observed that tensions are growing between the wholesale electricity markets and consumer’s demand for cleaner, carbon-free power. “The need to optimize these markets to support a transforming electric grid is likely to come into sharper focus in 2017,” he wrote in a blog about needed market reforms.
"Clean energy resources are quickly becoming the most affordable and dominant resources on the system, so markets need to adapt to reflect their value rather than discriminate against them,” Moore said. But when power markets devalue energy from wind, solar and other clean energy resources it can increase the cost of electricity because markets are procuring more electricity than necessary to meet power needs, Moore stated. He added that power markets are focussed on price and don’t value the lessened pollution from renewable sources rather than fossil-fuel sources.
Looking forward Moore said that the Federal Energy Regulatory Commission (FERC), as well as state regulators, utilities, grid operators and consumers should consider and enact market reforms to alleviate this tension to support clean energy.
Among the recommendations, Moore and NRDC called on energy markets to facilitate the integration of renewable energy and demand-side resources rather than frustrate such efforts. Energy markets also should respect the authority of legislatures and regulators to set, strengthen and achieve environmental policies and goals.
Moore said energy markets should: “Fully value the contributions of all resources on the system, including those under state regulation and others that may not participate directly in markets.” He added they should: “Price and compensate products that provide grid flexibility and other reliability services necessary for a dynamic grid that includes high levels of clean energy and emerging technologies.” As part of this, he also advocated that energy markets and utilities avoid giving unfair preference to fossil fuels that are unneeded “inflexible” baseload resources.
“The good news is that the clean energy genie is out of the bottle for good. Markets must reflect the new reality of low-cost clean energy and clean energy policy preferences. For the dynamic grid of the future, ‘flexibility’ is the yardstick by which to measure the resource mix,” Moore contended. He anticipated that in an electric grid increasingly dominated by wind and solar power natural gas and energy storage systems will play a role in ensuring the future of energy is clean.Tweet