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Why Organized Competitive Wholesale Markets are Better for Advanced Energy Buyers in Meeting Sustainability Targets, How to Make Them Better

Posted by Monique Hanis on Jan 19, 2021

Expanding competitive markets to Southeast and Western states and improving existing markets would enable corporations to boost investment and accelerate the clean energy transition

WASHINGTON, D.C., January 19, 2021 — A new report from the Advanced Energy Buyers Group, a business-led coalition of large energy users, explains why organized competitive wholesale markets operated by Regional Transmission Organizations and Independent System Operators (RTOs/ISOs) are foundational to many of the strategies that large energy buyers rely on to increase their use of advanced energy and meet their sustainability targets. The report also explains why expanding these markets to new regions and improving the design and operation of existing RTOs/ISOs would create more opportunities for corporate advanced energy procurement.

“Voluntary advanced energy buyers, including commercial and industrial customers as well as municipalities and institutional buyers like hospitals and universities, have proven to be an important and growing segment of the advanced energy market—and for these buyers, RTO/ISO markets offer more flexible, cost-effective opportunities to make progress toward their ambitious sustainability goals,” said Caitlin Marquis, Director at Advanced Energy Economy (AEE), the national business group that facilitates the Advanced Energy Buyers Group.

“As the incoming Biden Administration, 117th Congress, and an expected new FERC Chair set their priorities for an economic recovery driven by clean energy, the potential contributions of large energy buyers should not be ignored,” said Jeff Dennis, Managing Director and General Counsel at AEE. “Expanding and reforming RTO/ISO markets is an effective approach to ensure that these buyers have the tools they need to acquire clean energy they want to power their operations and make good on their corporate sustainability commitments. Doing so will also stimulate economic growth in their communities, provide significant cost and reliability benefits to all consumers on the grid, and accelerate the clean energy transition for all.”

The report, Organized Wholesale Markets and Corporate Advanced Energy Procurement: How Competitive Markets Help Commercial and Industrial Buyers Meet Their Sustainability Goals, and How They Can Be Improved,” available here, describes:

  • The massive corporate and institutional market for renewable energy and energy efficiency that has grown exponentially since 2016, with more to come as they strive to meet their sustainability commitments. 

  • The major tools that companies use to reduce their emissions and increase their consumption of clean energy, ranging from power purchase agreements for large off-site renewable energy to renewable energy offerings from utilities and competitive retail suppliers to onsite installation of distributed energy resources. 

  • The various ways that organized competitive wholesale markets (RTOs/ISOs) make these tools possible or much easier to pursue. 

  • Case studies outlining how large energy buyers like Amazon, Apple, Etsy, General Motors, the City of Houston, Microsoft, Starbucks, Temple University and the U.S. Army pursued a range of advanced energy technology solutions provided within organized competitive wholesale markets across the country, made possible by companies like 3Degrees, Advanced Microgrid Solutions, Apex Clean Power, EnelX NA, LevelTenEnergy, NRG Energy, Stem, and utilities including Consumers Energy, Dominion Energy, and Southern California Edison.

  • Examples of solutions outside of organized markets like Google’s solar-plus-storage project with NV Energy.

“The report demonstrates how organized competitive wholesale markets provide open access to competitive, liquid markets that is essential to the success of virtual power purchase agreements, which account for 80% of corporate renewable energy procurement,” said Marquis. “These markets also create additional revenue streams that increase the value of a range of distributed energy resources, and enable cost-effective, reliable integration of higher levels of renewable energy.”

The report offers several recommendations to support sustainable energy procurement by a growing range of buyers:

  • Expanding RTO/ISO markets into regions that do not yet have them, especially the West and Southeast. 

  • Identifying a series of reforms to ensure that the advanced energy resources buyers seek are competing on a level playing field with other resources. 

  • Ensuring that RTO/ISO markets are preparing for a future dominated by clean energy resources. 

  •  Ensuring that the perspective of clean energy consumers is adequately reflected in stakeholder processes of RTOs/ISOs.

About the Advanced Energy Buyers Group
The Advanced Energy Buyers Group is a business-led coalition of large energy users engaging on policies to expand their opportunities to procure energy that is secure, clean, and affordable. Members of the Advanced Energy Buyers Group are leading companies and organizations spanning a range of market sectors. Buyers Group members share a common interest in expanding their use of advanced energy, with the goal of becoming more competitive, resilient, and sustainable enterprises far into the future. The Advanced Energy Buyers Group is convened and facilitated by Advanced Energy Economy (AEE), a national business association of advanced energy companies. Track policy developments and news at @AEEnet.

Topics: Press Releases