The Future of Centrally-Organized Wholesale Electricity Markets

Lawrence Berkeley National Laboratory hosted a webinar on March 24, 2017, titled "The Future of Centrally-Organized Wholesale Electricity Markets." To view a video of the recording, click here.  

Despite enormous complexity, diversity and challenges, bulk power markets in the United States are functioning reasonably well. However, some aspects of their design — particularly, the long-term functioning of wholesale markets administered by regional transmission operators and independent system operators — remain a work in progress and in some cases are subject to an ongoing debate.

Four questions in particular lack consensus and are the subject of this report:

1. Are today's centrally-organized market designs adequate to accommodate state public policy goals, and what potential design changes would further enable deployment of resources that achieve the goals of reliability, affordability and resource mix?
2. What are the market impacts of environmental regulations that further constrain the deployment of fossil fuel resources?
3. What are the market impacts of integrating increasingly higher levels of renewable resources with zero marginal cost?
4. Are today's market designs adequate to acquire the flexible resources needed to better integrate increasing levels of variable energy resources at least cost?

These questions are debated in the report by authors representing a market operator (PJM), utilities (National Rural Electric Cooperative Association), environmental interests (Natural Resources Defense Council) and consumers (National Association of State Utility Consumer Advocates).

This report was funded by the U.S. Department of Energy’s Office of Electricity Delivery and Energy Reliability – Electricity Policy Technical Assistance Program and the Office of Energy Efficiency and Renewable Energy – Solar Energy Technologies Office under Task 1.4.29 – Future Electric Utility Regulation of DOE’s Grid Modernization Initiative. Lisa Schwartz, with Berkeley Lab's Electricity Markets and Policy Group, is the project manager and technical editor.