Outdated Electricity Market Rules Hinder Wind, Solar Deployment

Although record-low costs and consumer demand are driving growth in U.S. wind and solar energy, outdated wholesale market rules are preventing the two technologies from further reducing prices for consumers, according to a new report, “Customer-Focused and Clean: Power Markets for the Future,” from the nonprofit Wind Solar Alliance (WSA).

Sweeping changes in the electricity generation mix over the last 10 years are driving fundamental changes in the nation’s electricity grid, with wind and solar generating capacity having increased approximately 500%. Yet, market rules designed with other resources in mind fail to take advantage of these new resources’ excellent reliability capabilities, the report says.

Most regional transmission organizations’ rules were written before renewables made up a meaningful portion of the generation fleet, the report points out. Characteristics such as “inertia” and “spinning reserve” reflect attributes of certain generators and are not actual reliability services. The actual services such as frequency stabilization and regulation, ramping, voltage regulation, disturbance ride-through, and 10- or 30-minute reserves can be provided as well or better by modern wind, solar, storage and demand response resources, according to WSA.