CERAWEEK: Glick plans look at whether flexibility gets its due in power markets

Washington — As part of its examination of wholesale power market reforms, the Federal Energy Regulatory Commission will be taking a look at whether markets properly value benefits that flexible resources provide, the agency's new chairman, Richard Glick, said March 4.

Glick, who has been an outspoken advocate for a transition to cleaner energy sources, has already announced plans for a series of technical conferences with the aim of modernizing wholesale markets. A critic of sweeping capacity market reforms that FERC previously imposed, he has prioritized addressing those reforms as chair.

Speaking at the CERAWeek by IHS Markit energy conference, Glick said flexible resources also are on his radar.

If markets don't properly value the benefits of flexible resources, Glick said the task would be to "figure out a way that they get properly valued to incent those resources to come online and be available when needed."

The comments come as intermittent resources such as renewables are making up a growing share of the US generation mix. While the combined wind and solar market share of continental US generation is expected to be in the realm of 13% in 2021, S&P Global Platts Analytics forecasts that figure to approach 30% by 2030. Platts Analytics analyst Kieran Kemmerer said that as renewables gain market share, the value of flexibility will grow.

Prior to becoming chair, Glick discussed the need to step back and think about what the markets need and how to design them in a way that sufficiently compensates for flexibility and also potentially addresses resource adequacy in a more rational manner.

In his comments at CERAWeek, Glick said, "Big baseload plants, whether it be coal or nuclear, for instance, can't react to significant changes in wind or solar [power]." He added, "So you need a lot of flexibility there. Certain types of natural gas plants for instance and electric storage facilities, in particular can provide that flexibility along with certain hydro projects as well."

Glick's attention to flexibility marks a change in tone from the start of the Trump Administration, when the Department of Energy, warning of grid security risks posed by retirements of coal and nuclear plants, pitched a plan to compensate power plants that keep 90 days of fuel onsite. Glick had denounced that effort as "aimed at subsidizing certain uncompetitive electric generation technologies."

As chairman, Glick announced that FERC would open a new proceeding to examine the threat that climate change and extreme weather events pose to electric reliability.

He also has said his priorities include eliminating barriers to market participation for new technologies, supporting a buildout of transmission and reining in long delays and high costs associated with interconnection queues.

During the CERAWeek appearance, Glick highlighted the significance of the mid-February events in Texas to reliability discussions.

"When you lose power for four days in the middle of a record-setting cold wave – people literally freezing to death – that's something I think we need to think about again," he said. "We need to revisit the way we consider reliability and consider how we can address the risks associated with not investing in a reliable grid."