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Topic: Wholesale Markets

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[Episode #157] – Market Design for the Energy Transition

Oct 13 2021

Mini Episode

This one is for the electricity market geeks!

Most observers of electricity markets are well aware that adapting them to the new kinds of technologies and policies needed for the energy transition is an ongoing project with no simple answers. Even if there were simple answers, it would be hard to implement them, because there are so many different market designs in operation already that will have to find ways to accommodate these reforms.

But perhaps by thinking about the specific attributes of electricity contracts, and how various kinds of contracts serve different purposes, we can begin to understand the ways they can help meet the needs of diverse market participants and properly represent the value of disparate resources. In this episode, energy researcher Eric Gimon returns to the show to share his conceptual framework for how electricity markets can function in the energy transition, and how those concepts can be applied to the markets we have today. We start by addressing the zombie theory of “value deflation” in solar, and end up in a very heady conceptual space well deserving of this episode’s geek rating of 10!

Geek rating: 10

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[Episode #128] – Energy Basics Parts 7–9 – The Electricity Business and Power Markets

Aug 19 2020

Mini Episode

This episode is part of our Energy Basics mini-series. Parts 1-3 of the series can be found in Episode #119, and Parts 4-6 can be found in Episode #126.

If you have found yourself occasionally challenged to follow some of the more technical conversations we have here, or even if you just want to brush up on the fundamentals, this mini-series is for you! We hope these episodes will give you a bit more familiarity with the terms and concepts of energy, and help to fill in some of the knowledge that you were never offered in school.

Each of these three mini-episodes are about 20 minutes in length. Part 7 is available to all listeners. Parts 8 and 9 are available to full subscribers only. You can jump between each part using the chapter functionality in your podcast app.

Episode 128.1 - Energy Basics Part 7 – The Electricity Industry – The evolution of electric utilities; state regulation of utilities; utility restructuring. [00:00 to 30:19]

Episode 128.2 - Energy Basics Part 8 – Electric Utilities Today – The various kinds of electric utilities today; governance; relationship between transmission and distribution utilities. [30:20 to 59:06]

Episode 128.3 – Energy Basics Part 9 – Power Markets and Grid Balancing – How wholesale power markets work; introduction to retail electricity markets; how transmission and distribution grid operators keep supply and demand in balance. [59:07 to 1:26:34]

Geek rating: 1

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[Episode #126] – Energy Basics Parts 4–6 – Electricity, Generation and Grid Management

Jul 22 2020

Mini Episode

This is part of our mini-series on the Energy Basics. Parts 1-3 can be found in Episode #119.

If you have found yourself occasionally challenged to follow some of the more technical conversations we have here, or even if you just want to brush up on the fundamentals, this mini-series is for you! We hope these episodes will give you a bit more familiarity with the terms and concepts of energy, and help to fill in some of the knowledge that you were never offered in school.

Each of these three mini-episodes are about 20 minutes in length. Part 4 is available to all listeners. Parts 5 and 6 are available to full subscribers only. You can jump between each part using the chapter functionality in your podcast app.

Episode 126.1 - Energy Basics Part 4 – Basics of Electricity – What electricity is; electricity units; Volts and amps; AC and DC. [00:00 to 23:51]

Episode 126.2 - Energy Basics Part 5 – Electricity Generation – How various kinds of electricity generators and power stations work. [23:52 to 55:53]

Episode 126.3 – Energy Basics Part 6 – Grid Management – How the electricity transmission and distribution systems are structured and managed. [55:54 to 1:24:54]

Geek rating: 1

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[Episode #105] – Can Competition Decarbonize Electricity?

Oct 2 2019

Mini Episode

In this third part of a trilogy of shows about how to decarbonize grid power, former utility regulator Travis Kavulla offers his thoughts on how wholesale electricity markets can use competition to deliver clean electricity. Following our discussion about reforming wholesale markets in Episode #90, and our exploration of how state policies can directly choose clean power in Episode #97, Travis offers some deep thoughts on the respective roles of FERC and state regulators, proposed reforms to PURPA, FERC’s showdown with PJM, the politicization of FERC, the recent battle in Ohio over HB6 (bailing out its nukes and coal plants), and other regulatory battles du jour. So much power market wonkery in such a small package!

Geek rating: 9

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[Episode #84] – Designing Climate Solutions

Dec 12 2018

Mini Episode

If you wanted to design a set of policies that would reduce greenhouse gas emissions worldwide, right now, where would you start? How would you figure out which sectors of the economy to target in order to have the maximum impact? Which policies would you choose? How would you go about designing them?

And which sectors of the economy would you target in order to reduce emissions the most? Transportation, maybe? Improving the efficiency of our buildings? Would you believe those two sectors rank at the very bottom of the list?

In this episode, we interview one of the authors of a new book by Energy Innovation titled Designing Climate Solutions, which is like a how-to manual for climate policy, identifying the major sectors of the economy that we should target to eliminate as much greenhouse gas as quickly as possible, and the specific policies that can achieve those reductions. We guarantee you will find some surprises in this one!

Geek rating: 5

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[Episode #73] – Regulatory Capture

Jul 11 2018

Mini Episode

Utility regulators are playing an increasingly important role in steering the energy transition of the power grid. However, many regulators aren’t equipped to sort through arguments put forward by competing interests, because they often need to consider highly technical questions that only a power system engineer, or a market design expert could properly evaluate. Some regulators are simply political appointees who may or may not have the appropriate technical expertise, while others are elected by the public, who in turn may not be able to evaluate the technical expertise of the people they are electing. As a result, it is quite common for regulators to depend on the guidance of the companies they are supposed to regulate, and for those companies to seek as much leverage or control over their regulators as they can get—a problem known as regulatory capture.

In this episode we’ll delve into the problem of regulatory capture, and what might be done about it, with the help of Gary Wolfram, a professor and the Director of Economics and Political Economy at Hillsdale College in Hillsdale, Michigan. He has published extensively on public policy and taxpayer rights, on the role of government in capitalist market economies, and on the governance and incentive structures of utilities…and we promise that this interview will be a lot more accessible and interesting than this dry description may make it sound!

Geek rating: 6

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[Episode #70] – Who Should Control Wholesale Markets?

May 30 2018

Mini Episode

As older coal and nuclear generators are pushed off the grid by cheaper, nimbler, cleaner renewables and other technologies, the owners of conventional generators are becoming increasingly nervous about their futures, and seeking new ways to protect their legacy assets. From attempting to change market rules or simply pursuing new subsidies, the effort to retire dirty and unwanted old generators and replace them with newer, cleaner sources of electricity faces a series of challenges. And how those challenges are resolved will have broad implications for how the electric grid of the future will operate, and who will own it.

In this episode we take a deep dive into the intersections between federal authority, wholesale markets, and state policies, explore some of the legal questions therein, and try to understand what they suggest about the process of energy transition, and the pathways for unlocking new ways of using energy and designing electricity markets…and yes, this episode definitely deserves its Geek Rating!

Geek rating: 10

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[Episode #69] – Western Grid Regionalization

May 16 2018

Mini Episode

California and 12 other US states, plus parts of Canada and Mexico, are considering whether to expand the California wholesale grid and balancing area to include the entire region, in order to increase the flow of reliable, affordable, and renewable power across the West. This shift to a regional independent system operator, or ISO, would also expand resource flexibility, improve transmission planning and grid reliability, and enable a far larger share of renewable energy across the system. But it’s not without risk: Would a unified Western market kill the market for power projects sold under virtual PPAs outside its borders? Would it give project developers—or even coal plants—operating within the Western grid but outside California a competitive edge over California’s own renewable project developers? Would it become a loophole through which coal power starts being imported into California, after many years of effort trying to get rid of coal in the Golden State? Would California or any of the other Western states lose control over their own power production and consumption? And what about the five states that could join the Southwest Power Pool instead—what will they do?

These are complex questions with no easy answers, but our guest in this episode is an expert on the subject and ably walks us through all the pros and cons…and points the way to a potentially very different future for power markets in the American West.

Geek rating: 8

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[Episode #63] – Pathways to Deep Decarbonization

Feb 21 2018

Mini Episode

As energy transition proceeds we’ll need to move well beyond decarbonizing electricity generation and into transportation and space heating powered by renewables. But we’re only beginning to figure out the pathways by which we might do that, and since each region has its own particular sources of renewable energy and its own particular needs for energy, the solutions may vary quite a bit from place to place.

When do we figure out how to decarbonize space heating and transportation? What sorts of challenges will we face in adding those loads to the electricity grid? How much additional generation, transmission, distribution capacity, and storage will we need? How will we manage such a grid? And what if, once we have transferred some of those loads to the grid, it actually starts to look cheaper to not electrify everything? Our guest in this episode has studied such questions for years, and has some surprising insights into how deep decarbonization might actually evolve.

Geek rating: 3

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[Episode #60] – Demand Flexibility

Jan 10 2018

Mini Episode

Demand response and demand flexibility—shifting demand to intervals where electricity is abundant and cheap, and away from when the grid is constrained or power is expensive and dirty—can help keep prices down, optimize the grid overall, and help us integrate more renewable supply into grid power while displacing more fossil fuels. Until recently, this has mainly meant doing simple things like turning off loads during the on-peak intervals of time of use rates. But now new technologies are coming to the grid, including artificial intelligence, machine learning, and the so-called Internet of Things, which could let us moderate loads and operate grid assets in a much more intelligent, precise, and dynamic fashion, taking grid optimization to a new level and reducing the need for peaking resources.

But this is all quite new, and how we’re going to implement it, and what it may require, largely remains to be seen. In this episode we’ll talk with Sara Bell, founder of Tempus Energy, and get a little insight into how some early pilots of these technologies are working in the UK and South Australia. We’ll also get an inside view of her campaign to revise the design of the capacity market in the UK, so that it actually benefits consumers in accordance with the law, rather than distorting markets in favor of fossil fuel incumbents.

Geek rating: 8

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