Join energy experts John Tsoukalis, a Principal at Brattle Group specializing in electric market modeling, and Metin Celebi, also a Principal at Brattle, who focuses on resource planning and climate policy. They discuss the evolution of the Western electricity markets, highlighting the benefits of extended day-ahead markets and Markets+. The conversation dives into differences with Eastern U.S. deregulation, the impact of organizational maturity, and the vital role of regional cooperation in enhancing energy efficiency and customer savings.
The podcast discusses the emergence of Extended Day-Ahead Markets and Markets Plus, emphasizing their roles in optimizing resource allocation and lowering customer costs in the WECC.
Panelists highlight the importance of regional cooperation and incremental market changes in the West, contrasting it with the Eastern U.S. deregulation experience to foster stakeholder confidence.
Deep dives
Overview of Energy Market Developments in the WEC
The podcast highlights significant developments in the Western Electric Coordinating Council (WECC) regarding wholesale power markets, focusing on four key initiatives. These include the Extended Day-Ahead Market (EDAM), Markets Plus, RTO West, and the Western Resource Adequacy Program (RAP). Each initiative aims to enhance regional market participation, optimize resource allocation, and improve economic efficiency for utilities involved. The emergence of these markets is largely driven by the need for improved resource adequacy and better alignment with the diverse energy needs across the interconnected western states.
Resource Adequacy and Its Impacts
The RAP is designed to create a standardized framework that facilitates resource sharing among participating utilities, ultimately leading to lower costs and improved reliability. By allowing utilities to trade resources based on their peak demand patterns, the RAP helps mitigate the impacts of growing load and the phasing out of traditional energy sources. This collaborative approach enables utilities to optimize their capacity management, potentially reducing the number of resources needed while maintaining adequate service levels. The current shifts in load growth and resource types make the establishment of this program increasingly vital for effective energy management in the region.
Comparative Characteristics of EDAM and Markets Plus
Both EDAM and Markets Plus operate as day-ahead markets, pooling resources to deliver lower costs for customers in the WECC, but they differ in specific operational frameworks and member requirements. Markets Plus requires all its participants to also join the RAP, ensuring a unified resource adequacy strategy, while EDAM offers more flexibility, allowing participants to choose separate adequacy frameworks. The operational distinctions arise from the types of utilities involved and how they interconnect with various resources, which influences the benefits each market can offer. Ultimately, the success of these markets relies on effective integration of diverse generation resources and the operational efficiency obtained from their cooperation.
Lessons from West to East: Market Development Insights
The panel discusses valuable lessons learned from the western energy market development as compared to the eastern U.S. experience during the deregulation of the late 90s. The West's gradual approach is contrasted with the East's 'big bang' model, revealing the potential advantages of incremental market changes that allow for more cautious adaptation and stakeholder confidence. Moreover, both regions could learn from each other regarding customer benefits, as demonstrated by the potential cost savings realized through cooperative market structures. The discussion underscores the importance of regional cooperation while navigating political and regulatory considerations in multi-state markets.
On this special episode of Alternative Power Plays, lead experts from the Brattle Group: John Tsoukalis, Metin Celebi, and Frank Graves, join the podcast for a panel discussion on recent energy market developments in the Western Electricity Coordinating Council (WECC), focusing on the extended day-ahead markets (EDAM) and Markets+.
Celebi, Graves, and Tsoukalis are Principals at Brattle with expertise in electricity markets, resource planning, environmental and climate policy analysis, regulatory and financial economics, electric and gas utilities, litigation matters, market modeling, transmission rate design, and more.
During this episode they highlight the benefits, differences, and regional impacts of these regional markets, comparing them to the deregulation seen in the Eastern U.S. The group also address the approach to market development in the West, potential customer savings, and the importance of regional cooperation for efficient energy management.
The Brattle Group, based in Boston, provides consulting services and expert testimony in economics, finance, and regulation to corporations, law firms, and public agencies.