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Market Design Reform

Organized wholesale electricity market (OWM) design was largely developed over two decades ago and built to accommodate a fossil fuel-based resource mix. With nearly 80% of customer clean energy procurement executed in OWMs, Regional Transmission Organizations/Independent System Operators (RTOs/ISOs) are on the forefront of operating electricity grids with a high penetration of variable renewable energy (e.g., solar and wind). The operation of and services provided by variable renewable energy resources are fundamentally different than those of fossil fuel resources. Furthermore, increased frequency of extreme weather adds additional complications to maintaining a well-balanced grid. To cost-effectively and reliably transform market design to meet the needs and challenges of the 21st century electricity system RTOs/ISOs should incorporate the following best practices:

  1. Utilization of fast scheduling and dispatch to enable system flexibility
  2. Implementation of scarcity-based pricing to attract and retain flexible resources, while supporting long-term contracting and hedging so that consumers that plan in advance do not pay these prices, and a circuit-breaker mechanism to avoid excessive impact on consumers
  3. Establishment of a set of non-discriminatory operations reliability services to ensure reliability
  4. Enablement and support for bilateral contracting
  5. Integration of DERs, with emphasis on dispatchable demand, to increase system efficiency
  6. Forecasting, unit commitment, and multi-settlement systems to better incorporate near- and medium-term uncertainty
  7. Optimization of energy-limited resources
  8. Hierarchical control to allow market participants to self-optimize

Citation: Page 60, Designing the 21st Century Electricity System – Clean Energy Buyers Institute (cebi.org)


Resources

Resource Adequacy General Approaches and Importance to Energy Buyers Primer

This Primer is the first edition of a series on resource adequacy and aims to educate energy customers on what resource adequacy is and how it impacts electric reliability, clean energy integration, and cost efficiency.

Past Events


An Introduction to Resource Adequacy: What it is and Why it Matters to Energy Customers

November, 2 2022

Learn more about the CEBI Resource Adequacy Primer, why it is important to energy customers, and general approaches to resource adequacy planning. Speakers will also explore the implications resource adequacy planning has on customer costs and the transition to a zero-carbon electric grid.

Resource Library

In support of its mission to solve the toughest market and policy barriers to achieve a carbon-free energy system, the Clean Energy Buyers Institute (CEBI) has created a clearinghouse of resources for organizations interested in the advancement of clean energy.