Le Lézard
Classified in: Oil industry, Environment, Science and technology, Business
Subjects: SVY, LEG, ENI, ENP

Framework Developed by Brattle Economists on Forward Clean Energy Market Presented to U.S. Congress


WASHINGTON, Sept. 16, 2019 /PRNewswire/ -- A recent white paper, authored by Brattle economists and prepared for NRG, that provides a framework for a clean energy market to meet carbon reduction goals has been submitted to the U.S. House Energy & Commerce Committee in response to questions posed by the Committee. The Committee is seeking information to inform the development of comprehensive climate legislation. The white paper has also been used as the basis for draft legislation proposed by NRG in Illinois.

The Brattle Group (PRNewsFoto/The Brattle Group)

To cost effectively meet the ambitious clean energy targets set by corporations, communities, cities, and states, the Brattle white paper proposes a new forward clean energy market (FCEM) that will harness competition and innovation. The FCEM would provide a competitive, regional market for clean electricity attributes and would complement existing competitive wholesale electricity markets. It can also support the scale of clean energy investments to help decarbonize other sectors across the economy through electrification.

"When implemented, the FCEM would allow all interested purchasers of clean energy, including governments, retail electricity suppliers, and end users, to work with clean energy suppliers to accomplish the clean energy goals," noted Brattle Principal and white paper coauthor Kathleen Spees. "This proposal can also be implemented relatively quickly as a much-needed complement to existing electricity markets."

"At present, 29 states and countless cities have passed laws or adopted clean energy standards for the power sector. Six of those states and 133 of those cities have announced their intention to completely erase carbon emissions from the power sector over the next two to three decades. Many individual companies, like NRG, have also established corporate goals to reduce their associated carbon emissions," said Travis Kavulla, Vice President of Regulatory Affairs at NRG, in the company's letter to Congress. "Now that those goals have been set, the question is how to ensure the tools are in place to achieve those goals quickly and affordably. We propose such a tool in the FCEM."

The FCEM design procures a product called the clean energy attribute credit while incorporating a number of best practices in market design. These include qualifying a broad set of resources to maximize competition; incorporating a downward-sloping demand curve to achieve clean energy goals sooner if resources are available at an affordable price; and using auctions to transparently award winners at competitive prices. The transparent, centralized forward auction format will further incorporate a multi-year price lock-in to enable financing for new resources. The design also includes optional advanced features to focus payments more sharply on realized carbon abatement.

According to the Brattle white paper, this design will help to resolve tensions between wholesale markets and environmental goals by using an approach that explicitly values environmental attributes in a way that is complementary to and consistent with existing energy, capacity, and ancillary service markets. It can work well with or without a price on greenhouse gas (GHG) emissions, and can work across regions with diverse GHG regimes without causing leakage.

This white paper provides a detailed description and design proposal that cities, states, market operators, or regional entities could use as a starting point for developing or enhancing their plans for meeting carbon reduction goals or other clean electricity targets, as well as options on how each region may want to adjust certain details to match their specific needs and context. It expands upon the concepts developed in partnership with a number of other stakeholders, including a related Brattle white paper on using wholesale power markets to enable a clean energy grid, a study on behalf of New England stakeholders to design a clean energy market, and support for the NYISO in assessing the incorporation of a carbon price into the wholesale power market.

The white paper, "How States, Cities, and Customers Can Harness Competitive Markets to Meet Ambitious Carbon Goals: Through a Forward Market for Clean Energy Attributes," is authored by Brattle Principals Kathleen Spees and Samuel Newell, Associate Walter Graf, and Senior Research Analyst Emily Shorin.

About The Brattle Group
The Brattle Group analyzes complex economic, finance, and regulatory questions for corporations, law firms, and governments around the world. We are distinguished by the clarity of our insights and the credibility of our experts, which include leading international academics and industry specialists. For more information, please visit www.brattle.com.  

SOURCE The Brattle Group


These press releases may also interest you

at 06:13
JinkoSolar Holding Co., Ltd. ("JinkoSolar" or the "Company") , one of the largest and most innovative solar module manufacturers in the world, today announced that since March 20, 2024, the Company has repurchased 788,178 American depositary shares...

at 05:34
Sungrow, a global leading PV inverter and energy storage system supplier, has emerged as one of the standout companies on the 2024 Fortune Asia Future 30 list. The list, which recognizes the most promising companies in Asia Pacific, is a testament to...

28 mar 2024
Curio Legacy Ventures (Curio), a frontrunner in nuclear technology innovation, proudly announces a strategic partnership with Navarro Research and Engineering, Inc. (Navarro). This collaboration signals a significant step forward in advancing nuclear...

28 mar 2024
Arctech has recently signed a contract for the 500MW Manah I power plant project in Oman, following its successful bid for the 588MW Manah II PV project in Oman earlier in 2023. This consecutive project win showcases Arctech's customized solutions...

28 mar 2024
The "Fuel Cells - Global Strategic Business Report" has been added to  ResearchAndMarkets.com's offering. The global market for Fuel Cells estimated at US$11.4 Billion in the year 2023, is projected to reach a revised size of US$40.7 Billion by...

28 mar 2024
Peabody today filed its Proxy Statement for its 2024 Annual Meeting of Stockholders to be held on May 9, 2024, which disclosed that current members of Peabody's Board of Directors Samantha B. Algaze and David J. Miller have determined that they will...



News published on and distributed by: