Something feels different. In the last two years, there’s been a material shift in the way renewable energy and other distributed resources are discussed.
For so long, believers in wind, solar, batteries and microgrids have focused on targeted government support. But direct subsidies and mandates are diminishing in importance.
One example: Utility-scale solar in the U.S., which was once almost exclusively driven by state mandates and tax credits, is now mostly being driven by economics. And tax credits are on a path to being phased out.
We now have a proven class of resources that can perform the same function as traditional power plants -- often at a lower economic and environmental cost. And these resources are hitting the grid at an accelerating pace.
Now that people are waking up to this reality, the conversation is shifting toward markets.
How do you put rules in place that fairly value the responsiveness, resiliency and environmental performance of distributed resources like aggregated batteries, real-time energy efficiency and commercial microgrids? And how do you manage the surge of wind and solar so they don’t crush wholesale markets by flooding them with cheap power at the wrong time?
That’s the framework we’re operating in today. It's uniting groups across the political spectrum that favor of open markets and oppose the Trump administration's agenda to prop up coal.
On the Interchange podcast this week, we'll talk with two experts who are focused intensely on the evolution of markets: Lenae Shirley, the senior director of technology innovation and market adoption at the Environmental Defense Fund; and Devin Hartman, a senior fellow with the R Street Institute.
How much should we read into this alignment?
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Recommended reading and listening:
- R Street Institute: Refreshing Price Formation in Electricity Wholesale Markets
- EDF: More Subsidies Than You Think Influence the Cost of Electricity
- The Interchange: Renewables Are on a Collision Course With Power Markets