As we celebrate Earth Day 2021, we highlight the environmental successes of competitive power markets and share policies that allow markets – and competitive power suppliers – to build a cleaner energy future that works for all of us.
As April 22 marks the 51st anniversary of Earth Day, we reflect on the environmental progress competitive electricity markets have achieved over the years and recognize the vital role competitive power suppliers play in enabling a cleaner energy future.
EPSA advocates for well-designed competitive markets that deliver cleaner and cost-effective electricity, among other benefits. Here’s a look at how competition is curbing carbon emissions, what EPSA members are doing to build a cleaner energy future and which policies will lead to sustainable, more affordable decarbonization.
Competition Is Curbing Carbon Emissions
Along with encouraging power providers to deliver least-cost solutions, competition has accelerated emissions reductions and put more clean energy technology on the grid. Power generation owners must operate efficiently to remain economically competitive while providing power capacity to system operators, and market signals keep these power generators responsive to price trends.
Competitive power suppliers can be more nimble and flexible than regulated utilities. If markets are allowed to work as they should, power generators in ISO/RTOs will adapt quickly to invest in the lowest-cost, most-effective resources — achieving lasting widespread, regional results.
In the nation’s largest regional transmission system, PJM Interconnection (PJM), which also runs the nation’s biggest competitive wholesale power market serving 13 states and the District of Columbia, carbon dioxide emissions have dropped 39% since 2005. These savings are largely encouraged by the investment in and entry of new, more efficient power generation technologies and renewables. Notably, this progress has been achieved all while saving its 65 million consumers $3.2-4 billion annually.
Learn more about PJM’s competitive markets.
But competitive power markets are only one part of the equation. How are the competitive power suppliers who operate in these markets answering the call for cleaner energy?
How EPSA Members Are Building a Cleaner Energy Future
EPSA member companies – America’s competitive power suppliers – support efforts to address climate change through transparent, open, and nondiscriminatory competitive markets that allow all resources to compete to reduce emissions. That’s why EPSA members are investing millions of private capital – not ratepayer dollars – into innovative technologies that are making a cleaner energy future possible.
With more than 6,000 MW of power capacity from renewable resources, 5,000 MW of cost-competitive zero-emitting nuclear plants and over 7,000 MW of battery storage on the grid or in development, here are a few ways our companies are building a cleaner energy future and helping to advance state and federal environmental goals:
- Solar Projects for a Brighter Tomorrow: Competitive Power Ventures plans to build a 175 MW solar farm on the site of a former coal mine in Maryland. The Backbone Solar Farm would generate enough emission-free electricity to power about 30,000 average Maryland homes. Tenaska is also bringing renewable energy to the power grid with five significant projects in southern Indiana totaling 1,080 MW of renewable solar energy.
- Fans of Wind Energy: Collectively, our member companies operate nearly 2,600 megawatts of wind energy in 15 states, with an additional 744 megawatts under construction or development. And as wind generation becomes cheaper, competitive suppliers will follow price signals to invest in the most cost-effective resources to meet customer demand. Learn more about how EPSA members bp, Calpine, Competitive Power Ventures, LS Power and Tenaska are investing in wind energy here.
- Big Battery Projects: With 7,000 MW of battery energy storage projects, EPSA member companies are paving a path for renewable energy to be reliably and efficiently integrated to the grid. LS Power and Vistra Corp. have two of the largest battery storage projects in the world, and Tenaska has an agreement with Capital Dynamics to develop nine battery energy storage system (BESS) projects, enough to bring 2,000 MW of renewable energy to the California grid. Learn more here.
- Cost-Competitive Nuclear: EPSA supports cost-competitive nuclear power and continued innovation in emerging technologies as a part of America’s lower carbon future. Our member companies bring 5,000 MW of competitive nuclear power to the grid. Vistra subsidiary Luminant operates Comanche Peak, a 2,300 MW nuclear power plant in Somervell County, Texas, and NRG Energy, Inc. operates the 2,700 MW South Texas Project, the largest nuclear plant in the state.
- Efficient Natural Gas Technology: Thanks to the forces of competition, new technologies are making natural gas cleaner and more affordable than ever before. Because markets incentivize newer, cost-effective and efficient plants to provide power, our members are maintaining reliability as the grid transitions to a cleaner energy future. Competitive Power Ventures’ cutting edge, highly efficient natural-gas-fired Three Rivers Energy Center is set to bring 1,250 MW of power to Illinois. And Calpine, the largest generator of electricity from natural gas in the United States, operates a number of highly efficient combined-cycle and cogeneration plants from coast to coast.
- The World’s Largest Geothermal System: At The Geysers in California, Calpine uses a natural, clean energy source – heat from the earth’s interior—to produce electricity. As the single largest geothermal electrical operation in the world, The Geysers use dry or superheated steam to produce electricity.
EPSA’s Competitive Policies for Decarbonization
Achieving a lower-carbon economy requires effective, efficient solutions that do not unduly burden consumers or impede the reliability of our power grid, while allowing for continued competition and innovation. And when it comes to decarbonizing the power sector, policies that focus on reducing emissions while ensuring reliable and least-cost solutions will yield the most effective results to meet the growing demand for electricity.
At EPSA, we recognize the power of markets in meeting environmental goals. That’s why we support a national, economy-wide carbon price—sending the right signals to reduce emissions while ensuring electricity is more affordable, reliable and innovative.
Download EPSA’s fact sheet to learn how an economy-wide carbon price is the least-cost path to reduce emissions.
According to a recent Energy + Environmental Economics report, policies that regulate carbon directly result in the lowest-cost emissions reductions. Notably, a well-designed clean energy standard (CES) can achieve carbon reductions in the electricity sector at a price similar to a carbon price, but only if it includes the right elements.
As we transition to a lower-carbon economy, we must remember the environmental successes of competitive power markets and implement competitive policies that allow markets—and competitive power suppliers—to build a cleaner energy future that works for all of us.
Download EPSA’s fact sheet, Competitive Decarbonization: Reducing Emissions Through Carbon Pricing or a Clean Energy Standard.
Learn more about EPSA’s competitive solutions here.