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Real-Time Power Markets Would Save Southeast Over $100 Billion

Alex Hobson's picture
Vice President of Communications American Council on Renewable Energy (ACORE)

Alex Hobson is currently the Vice President of Communications at the American Council on Renewable Energy (ACORE). Previously, Alex served as the Senior Communications Manager for the Solar...

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  • Sep 28, 2021 9:45 pm GMT
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As the Federal Energy Regulatory Commission (FERC) continues to evaluate a proposal to form an enhanced energy trading framework named the Southeast Energy Exchange Market (SEEM), a new report released today by the American Council on Renewable Energy (ACORE) finds real-time power market options in the Southeast United States would generate over $100 billion in cost savings compared to SEEM. The report, Maximizing Cost Savings and Emission Reductions: Power Market Options for the Southeast United States, produced for ACORE by Vibrant Clean Energy (VCE), evaluates the SEEM framework in comparison to an optimal energy imbalance market (EIM) and regional transmission organization (RTO). An additional scenario envisions an RTO in which participating utilities reduce electricity sector emissions by 98.5% by 2040, consistent with public announcements of significant decarbonization goals by major utilities in the region.  
 
“The southeastern United States is one of the largest regions in the country without an organized wholesale power market, and these modeling results show that an EIM or RTO operating in the proposed SEEM footprint would generate significantly more cost savings and emission reductions than the SEEM framework, while also creating more electricity sector jobs over the next 20 years,” said ACORE President and CEO Gregory Wetstone. “Setting up a real-time energy market in the Southeast is a good economic option for the region that would also reduce climate impacts, improve local air quality and give utilities the best shot at meeting their decarbonization goals.”
 
The report finds that an EIM would save $111 billion by 2040, as compared to the SEEM framework, while an RTO would save $119 billion. Additionally, the new modeling shows that the SEEM framework would reduce carbon emissions by 30% by 2040 compared to 2020 levels. In contrast, the EIM scenario could reduce emissions by 67% by 2040, while the RTO scenario could help deliver 70% emission reductions over the same time period. Both the EIM and RTO scenarios would enable significant new solar and wind energy deployment, making it easier for major utilities in the region to achieve their publicly announced decarbonization goals. Both options would also create more than 1 million new jobs in the region.
 
The VCE quantitative analysis follows an earlier ACORE report, Energy Market Design and the Southeast United States, which found that real-time, wholesale energy markets, particularly when paired with regionally planned transmission, are critical to accelerating the growth of renewable energy in the Southeast.

 

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Bob Meinetz's picture
Bob Meinetz on Sep 29, 2021

Wow Alex, lots of big money- "$100 billion", "$111 billion", "$119 billion". Lots of big promises, too:

"would generate significantly more cost savings and emission reductions"
"would also reduce climate impacts"
"would improve local air quality and give utilities the best shot at meeting their decarbonization goals"
"reduce emissions by 67% by 2040"
"could help deliver 70% emission reductions"
"create more than 1 million new jobs in the region"


You'll have to excuse my skepticism of a report prepared by ACORE and Vibrant Clean Energy, Inc., two groups that stand to pocket some of that big money by killing SEEM. Questions:
 

  1. Has your report been reviewed by anyone without skin in the game - a peer-reviewed, academic journal?
  2. If not, what would lead an independent observer to believe this is little more than advertising on behalf of solar/wind developers, their hardware manufacturers, and their analysts, with little promise for addressing climate change?
  3. Who will pay for those "1 million new jobs" in the region - electricity customers in the region? If so, and the jobs pay a reasonable $60,000/yr each, that's $60 billion in costs they'll have to come up with. Kind of takes the bloom off of ACORE's rosy report, doesn't it?


Thanks.

Audra Drazga's picture
Audra Drazga on Sep 29, 2021

Alex - I just wanted to hop on and thank you for your contributions to the community this year.  I look forward to seeing you on a regular basis.  And thanks for this article! 

Michael Keller's picture
Michael Keller on Oct 4, 2021

So how did that work in Texas, with energy prices around $9000/mWh$. Real time fabricated markets are basically a scam to enrich the investment class.

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