- Oct 31, 2020 8:27 pm GMT
This article from APPA provides a sobering and realistic view of the current situation with wholesale capacity markets. The current market designs are "misaligned", they do not accommodate State policies and Generators are not being adequately compensated, largely due to an over abundance of generating capacity, which is growing rapidly with DER adoption. Energy prices continue to slide backwards, further reducing a Generators revenue stream to the point where they are no longer earning enough revenues to maintain the high levels or readiness and resiliency needed to ensure reliable electricity. The momentous changes taking place in the energy transition will force the industry to look inward for some "soul searching". But remember, this train is moving fast and some will certainly be left behind. Soul searching is ok, but don't fall into analysis paralysis.
"Utility projects (bilateral contracts and ownership) accounted for approximately half of the new capacity in each year and were characterized by a greater diversity of resources than merchant generation. In 2018, about half of the utility-sponsored new capacity was natural gas, one-fourth was solar, and one-fifth was wind; and in 2019, those three technologies each accounted for about one-third of utility capacity additions. Small amounts of hydropower, geothermal, biomass or biogas, and fuel cells were among the utility projects, but not the merchant projects."
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