Big renewables buyers call for power market reforms

Source: By Arianna Skibell, E&E News reporter • Posted: Tuesday, January 19, 2021

The expansion of competitive wholesale power markets is critical for enabling companies like Amazon.com Inc. and Apple Inc. to make bigger purchases of renewable energy, according to a new report by a group of corporate energy users.

With a day to go before President-elect Joe Biden ushers in a new energy agenda aimed at cutting carbon emissions, a coalition called the Advanced Energy Buyers Group pushed the idea that reforms to competitive wholesale markets are key for meeting corporate energy and sustainability goals.

“These large buyers that are taking voluntary actions to transition to advanced energy can be a huge part of the solution,” said Caitlin Marquis, who manages the Advanced Energy Buyers Group for Advanced Energy Economy, a trade group. “But there are barriers they face and opportunities to expand the actions these companies can take to support the broader transition to a cleaner grid.”

Regional grid operators are overseen by the Federal Energy Regulatory Commission, which analysts say could be a pivotal agency for advancing Biden’s energy and climate agenda. Biden has called for 100% clean electricity by 2035.

FERC established regional grid operators, known as regional transmission organizations (RTOs), and independent system operators (ISOs) in the late 1990s in an effort to boost competition for buyers and sellers of power generation and streamline administration of the grid.

There are currently seven U.S. regional operators serving New England, New York, Midwest and Mid-Atlantic states, Texas, and California. While large swaths of the country use more traditional wholesale electricity markets, primarily in the Southeast, Southwest and Northwest, about two-thirds of the nation’s electricity load is served by an RTO, according to FERC.

The report calls for the expansion of competitive wholesale markets into Southwestern states like Colorado, Arizona, New Mexico and Nevada. Securing power through organized markets offers buyers more flexibility, transparency and competition, according to the group, as well as more options for purchasing wind and solar power and for energy storage.

“Expanding competitive wholesale markets into regions that do not currently operate under an RTO/ISO is likely the most impactful opportunity to expand opportunities for corporate advanced energy procurement,” the report states.

It also recommended market design improvements the authors say will further low-carbon energy deployment.

More electric transmission is needed, the group noted, and regulators could simplify the often long and complicated process of connecting new power generation to the grid. Those improvements would facilitate more renewable energy purchases.