On March 29, the Electric Power Supply Association hosted its first Competitive Power Summit in Washington, DC. Leaders from across the competitive power market discussed the key issues facing the sector, including maintaining reliability as the grid changes, market innovations, advancing decarbonization, ensuring a just transition with continued customer and economic benefits, and future market design. While there was much to debate around these topics, many speakers agreed on the basic tenets of what’s necessary to achieve reliable, affordable, and clean power. Specifically, throughout the Summit, many voiced increasing support for a national carbon pricing policy to provide clarity to the market and address the patchwork policy framework that has been established at the state level.
This is the first installment of a six-part blog series on the themes and key takeaways from EPSA’s Competitive Power Summit, which will highlight the competitive market’s ability to deliver affordable and reliable electricity while addressing societal decarbonization goals, as well as the key takeaways from former Federal Energy Regulatory Commission Chair Pat Wood III’s keynote presentation on “The Past, Present and Future of Competition.”
Competitive Power Markets Can Accelerate Affordable and Reliable Decarbonized Power Deployment
Over the past few decades, competitive markets have proven that they can achieve emissions reductions at a faster pace than markets relying on vertically integrated utilities. Between 2005 and 2021, power sector carbon emissions in regions with wholesale electricity markets were down 35% relative to 27% in regions without. Expanding that capability to meet societal pressure to decarbonize, while maintaining affordable and reliable electricity for customers, will be key to the competitive power market’s future success in the face of increasingly intense and unpredictable weather events and shifting demand patterns as the economy electrifies and new generation technologies come online.
The Past, Present and Future of Competition – Pat Wood Keynote at EPSA’s Competitive Power Summit
During the event keynote, Pat Wood III, made clear that liberating markets from monopolies is key to establishing more reliable energy that is more responsive to customers. Competition in the market should be the first concern, he said. A successful market will leverage robust infrastructure and have vigilant oversight and consistency across its rules and regulations.
Before energy leaders can address climate change and decarbonize the energy system, Wood said it’s critical to focus on sequencing and supply chain issues. Energy storage has emerged as a game-changing solution that was not available for system planners 20 years ago. The demand-side will play a larger role as more end-uses, like transportation, electrify to decarbonize. The labor force will need to be trained for this next generation, and we will need more grid modernization and expansion of transmission.
Subsidies are likely not needed anymore for energy solutions, Wood argued. Competition will drive the deployment of next-generation nuclear, hydrogen, and carbon capture and sequestration. If 80 percent decarbonization is achieved for the grid by mid-century, he said that would be considered an A+ for the sector.
In part two of the Competitive Power Series, we will present the key findings from the “Addressing Reliability in a Changing Grid” panelists.