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US clean energy sector pushes nine resource adequacy reforms

Highlights

Warns against FERC authority over green attributes

Calls for non-discriminatory resource capacity value

Various clean energy groups want the US to put an entity in charge of procuring necessary electricity resources, creating "buyers with accountability," among other recommendations aimed at ensuring resource adequacy as the US transitions to cleaner energy sources, according to a Nov. 23 report.

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Ensuring resource adequacy, especially given recent major power outages, remains a top priority for regulators, according to the report prepared by Grid Strategies for the American Council on Renewable Energy. The report was created in collaboration with the American Clean Power Association and Solar Energy Industries Association.

The report recommended various market reforms, including increased regionalization, implementation of competitive procurement practices for new electricity sources, and the development of new reliability metrics for the grid. It also cautioned against giving the Federal Energy Regulatory Commission jurisdiction over environmental attributes.

"If FERC asserts jurisdiction over environmental attributes, that increases regulatory risk dramatically because one swing vote at FERC can change the rules, whereas under the state jurisdictional approach, each of the ~30 states with environmental attribute requirements operate independently so risk is diversified," according to the report.

Additionally, the report called for increased granularity into reliability and resource adequacy products as well as greater emphasis on short-term energy and ancillary service market pricing that reflects value even during "times of scarcity."

Among other recommendations, the report suggested a non-discriminatory capacity value to be placed on all resources, including clean energy sources, which can be "short-changed in capacity accreditation processes."

"We can decarbonize at low costs if we appropriately measure and value all resources' contributions to resource adequacy," said Rob Gramlich, president of Grid Strategies and author of the report. "Assembling a full balanced portfolio to serve load at all times and places is going to take a lot of work from all parties in all regions."

'New grid' constructs

It is time for the US to rethink how resource adequacy planning works "in the new construct of the new grid," said Eric Wilkinson, Ørsted Offshore North America's electricity market policy director.

"Resource adequacy constructs, like many of the key elements of the bulk power system, were developed prior to the massive public and private push for renewable resources," Wilkinson said during a Nov. 23 webinar on the report.

Michelle Gardner, senior director of Northeast regulatory affairs for NextEra Energy Resources, said that while some regions of the country have a high penetration of renewable energy sources, PJM Interconnection, New York and the Northeast do not. As a result, those grid operators can learn from regions with significant renewable generation.

"That's a good thing, meaning we still have time to get these markets right, and we can certainly draw upon the experiences that we see elsewhere," Gardner said. "We often follow the crisis of the moment. We often act in kind of a knee-jerk manner."