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Utility Dive: 2020 Outlook — 10 Trends Driving the U.S. Power Sector

Posted by Larry Pearl on Jan 13, 2020

Utility Dive detailed 10 trends that will shape the U.S. power sector in the new year, quoting AEE's Jeff Dennis. Read excerpts below and the entire UD piece here. 

The U.S. power sector is undergoing a fundamental transformation, and has been for some time. But what are the biggest trends to watch in 2020? In speaking to a cross section of industry observers, the following 10 emerged. The economics of wind, solar and storage will continue to improve in 2020, creating a variety of implications seen in many of the other trends below.

"We're seeing time and again, whether it's in planning processes that are conducted by utilities, whether it's in open solicitations in markets ... that using combinations of wind, solar and storage is more cost effective for customers than really any other options, including relying on existing aging coal assets or even building new natural gas assets," Jeff Dennis, managing director and general counsel at Advanced Energy Economy (AEE), told Utility Dive...

The trend of improving economics for clean energy technologies has accelerated over the past year to 18 months, but Dennis expects it to continue at the current pace, pointing to the latest levelized cost of energy data from Lazard, released in November, which showed the cost of storage and renewables continuing to fall, though not as fast as before.

The primary obstacle that could impact the trend is the political headwinds that can arise when an industry goes through a massive transition and there are economic winners and losers, he noted...

FERC on Dec. 20 voted to effectively raise the price of subsidized energy resources selling their power into PJM's wholesale capacity market. PJM said Jan. 8 it would ask FERC to reconsider or clarify parts of its decision. In addition, New Jersey and Illinois are considering pulling out of the PJM capacity market altogether and observers say other states may follow​. Unless reversed on rehearing or appeal, that decision risks excluding advanced energy resources from the PJM wholesale markets and increasing consumer costs, and will lead to significant legal action from states and others, AEE's Dennis said.

In New York, a Public Service Commission proceeding on how the requirements of the state's new clean energy law will interact with the New York ISO capacity market "could become a bellwether for other regions with capacity markets that are starting to bump up against state clean energy goals," Dennis said. "

We've heard that some other states may also similar dockets," he added. NYISO has also proposed a carbon price for its wholesale energy market, but the earliest it says it could be implemented is mid-2021.
In New England, governors have asked ISO New England to devote significant resources in 2020 to exploring what market design changes will be needed to accommodate a system that meets all of the New England states' clean energy goals, Dennis noted...

Read the entire UD piece here. 

Topics: AEE In The News